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Tue Mar 23 2021




Freeos and the Apple Analogy

Or—How I learned to stop worrying and love a democratic Crypto-UBI

An apple a day keeps the FUDsters away…

Imagine a program where prospective apple farmers were given seeds—and access to space in a community garden— to grow, maintain, prune and nurture apple trees. Trees capable of growing, healthy, juicy, delicious apples valuable enough to sell on the open market and supplement a grower’s income.

We’ll call this the Freeos Apple System.

To gain access to these apples the prospective apple farmers simply were required to donate an already owned crate full of apples to the community garden’s compost system. These donated apples would be recycled back to the earth and used as fertiliser for the entire community.

This constant composting of apples would also help ensure that a glut of apples weren’t on the open market crashing the price of apples.

If any of the prospective growers didn’t have any apples to donate, they could donate money instead---to be held and conditionally used (through a vote) by the entire community. This pool of money could ONLY be spent to buy apples on the open market, which would be immediately composted.

Additionally, each week a bunch of robotic apple pickers would come along, pick and store apples, allotted evenly to all of the apple growers who came and worked the gardens that week. The prospective apple growers would need to agree to this even distribution arrangement prior to receiving their apple seeds and access to the community garden.

If the open market valued an apple to be as lower than $0.0167, some of the apples would be put into cold storage and not given to the growers—yet.

A percentage of these cold storage apples would be released IF the price was equal or higher the next week (with the percentage growing each consecutive week of good price times). Alternatively, if the price fell for a number of consecutive weeks, some apples would be slowly released from cold storage regardless to ensure they can be sold before they spoil, and to ensure the growers get some income coming in.

Before any prospective apple grower was given seeds and a year’s access to the community garden they would need to agree to 5 main conditions before being a part of the Freeos Apple System.

  1. Donate a minimum of a crate of apples—or in lieu money which would ONLY be used to purchase apples on the open market in the future via community vote—whenever a participating grower wished to draw upon their stored apple earnings. Any donated apples would immediately be composted in the community garden.
  2. Agree that robotic pickers would pick and distribute the apples evenly to store for to all actively participating growers per week. Each grower would have Points tallied up for every week they worked, and those Points would determine how many apples were allotted for this grower.
  3. Agree that if you don’t come into the garden to participate in growing and voting, you don’t receive any Points for any corresponding apples this week (but you can always come in next week and get your next week’s share). Basically, weekly participation is required to receive weekly apple distribution.
  4. Agree that if the open-market price was below the hard price target of $0.0167 per apple, a percentage of the apples normally given per week would be put into cold-storage and distribution would be delayed. Growers could vote on a higher target price, but not lower than $0.0167 per apple.
  5. Agree that 7% of the weekly gathered apples would go to the creators of the Freeos Apple System and that 3% would be donated to partners (e.g. nonprofits as a weighted vote).

Once a prospective grower was in the system, besides their weekly gardening duties, a few votes would be required each week.

  • Vote on the size of the crate required to donate for converting Points to apples in the Freeos Apple System with a few different size options (Small, Medium, Large).
  • Vote on the amount of money that is used as a substitute for the crate of apples to donate for converting Points to apples in the Freeos Apple System with a minimum and maximum range ($50 — $250 dollars).
  • Vote on what percentage of the pool of money—received from growers who paid money instead of a crate of apples for annual entry—should be used to buy apples on the open market (0%—100%)
  • Vote on a consensually agreed price target per apple above $0.0167 per apple.
  • Vote—with weighted votes—on a number of nonprofits that would receive the weighted distribution of 3% of the apples.

It might seem like a lot of work just to grow apples, but there are solid reasons and intentions for this system.

The intention is not only to distribute apples evenly, but to ensure apple growers may have a decent chance at receiving a good market value for their apples—while also helping ensure any hopeful apple growers can reasonably gain access into the system.

Many of the following dynamics play off these few rules, voting conditions and market forces.

Donating a crate of apples to be composted helps remove apples from the open market, and ensures demand remains strong—which may help the price.

Since a grower donated a crate of apples—and it takes a few weeks to gain enough to have another crate—the grower is likely to value a crate to be equal to a few weeks of work. The growers—en masse— hopefully won’t want to sell their apples too low, as it would likely undercut their own efforts.

If the growers do undercut themselves—and the open market price dips below $0.0167 per apple—then next week’s distribution practically would be lower, as part of the apples would be put in cold-storage, and part of the distribution would be delayed. This would mean fewer apples on the market, and demand should help the price climb back up.

If the open market has a big price crash (possibly for all fruits and vegetables), then the growers can vote to use some of the growing pool of money to buy apples on the open market and immediately compost them. This large-scale purchase may help drive up the price for apples while also reducing how many are in supply.

Donating to nonprofits may endear the supporters of the nonprofits to purchase these apples. Some nonprofit supporters may wish to become growers—to earn apples and to ensure they vote for their beloved nonprofit. While doing good with the apples, the growers may also benefit from the increased market share, visibility and demand.

If the demand for apples was consistently strong, the voters may wish to vote for a target price that is higher than $0.0167, for instance $0.03. If the price per apple later dropped below $0.03, then part of the apples might be temporarily locked in cold storage BUT it also may help establish a new, healthier price norm for this apple price—benefiting all growers.

If the community voting ends up making the price per apple sold to be quite high, then more growers will want to get into the system to make some good earnings. Remember that the crate price for donation is capped to be “Large” and the money price for donation is capped to be $250. This means that more growers—who in turn grow more apples—would end up putting more apples on the open market. This should correct the overly high price helping prevent a soaring, unsustainable price of apples.

Since a new grower—or renewing grower—needs to donate a crate of apples based on the community vote (Small, Medium or Large), this grower will probably value what was required to obtain this crate and how many weeks of effort it takes to replenish a crate worth of apples. This may help create a consensual price of how much a crate is worth—and therefore how much an apple, in turn, is worth.

Since money can be substituted when a new, or renewing grower, wants to enter—or re-enter—the Freeos Apple System, then there may be a consensual idea of how much a corresponding crate of apples is worth—and therefore how much an individual apple is worth.

Since growers can vote separately on the price of money to convert Points to apples, and the size of the crates required—different dynamics can occur.

Low money entry (i.e. $50) coupled with a large crate requirement might encourage prospective growers to donate the money instead of donating a crate of apples. This can pool money to be used for a future bad overall market condition (say if all fruits and vegetables crash their price suddenly).

Alternatively, a high money entry (i.e. $250) coupled with a “Small” crate requirement might encourage prospective growers to donate apples instead. This may help improve the open market prices while also removing/composting a current glut of apples on the open market.

Linking apple prices and crate sizes to money (e.g.dollars) may create a psychological correspondence to the price of a crate of apples. This can encourage growers to think of an apple as having an intrinsic price—helping prevent temptation to sell their weekly allotment of apples for less than what they donated to enter.

Essentially, this helps describe the Freeos system on the Proton & Dfinity blockchains

Freeos is an attempt to create a sustainable, democratic UBI on the blockchain that is more stable than other crypto-UBIs.

Systems that this apple analogy pointed towards, are not impossible to create on the blockchain and mostly require different ways of thinking.

Many of the Freeos systems may seem counterintuitive. And by applying this apple growing analogy, we intend to clear up how Freeos works: These systems—and the dynamics generated by real users and market forces—may work to create a new type of democratic UBI intended to benefit all of the participants equally.

The entire intention of Freeos is to create a new type of democratic money, run by the participants—who are also the recipients. The premise is that—given the right number of controls—the participants are incentivised to sustainably manage their own currency and economic system towards reliable and meaningful earnings that may truly supplement their own income.

One key point that we wanted to address with this article, was to put to rest any misconceptions that the Mint Fee that is required to convert Points to FREEOS tokens may represent at first glance. In fact, this annual payment is merely used as a deflationary mechanism just like the analogy of the donated apple crate—or money used in lieu. Similar to the analogy, FREEOS received through this process is often destroyed and decommissioned as a deflationary (counter-inflationary) system that is likened to “Proof-of-Burn”.

Additionally, it is intended that this Mint Fee also indirectly helps establish a consensual value of the FREEOS tokens by comparing it to what it costs to use money in lieu of the Mint Fee. This also establishes a sense of how many weeks’ worth of effort replenishes these FREEOS tokens.

Conveyed this way, we hope you realise that comparing Freeos to other experiments in crypto-UBIs is like comparing apples to oranges.

For more on Freeos, please check our webpage for more info, or join us in our Discord community where you may ask more questions about how Freeos is intended to work.

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