btcbagehot

[draft] snip-0006: engagement-based zapping

For aggregate rewards, I could see the curve a stacker uses to disburse rewards becoming a part of their identity on the site. Are you an inverse exponential or constant rewarder? Maybe we could create little badges with pictures of the curves that would show up on your posts. 

[draft] snip-0006

# engagement-based zapping

# Abstract

This proposal describes an opt-in feature allowing users to automatically zap the content they engage, thereby enabling zero-effort, engagement-based zapping.

# Motivation

As a multi-sided marketplace, Stacker News (SN) thrives given a healthy ratio of quality creators to discerning and active spenders. A creator is motivated to post content on SN if they can expect reasonable compensation in proportion to the quality of their posts. Correspondingly, spenders are motivated to consume and reward content on SN if a sufficient number of creators post enough quality content. The more content of sufficient quality, the more likely a spender will engage and return. The more spenders rewarding at a sufficient level, the more likely a creator will post and return. While a single click to zap sets an upper bound on the effort a spender takes to reward creators, the programmability of Lightning enables engagement-based spending thereby reducing the effort to zero[^1].

Among the capabilities of an “internet money” is the ability to extend usage-based[^2]  business models across the entire digital economy. As examples, Fountain.fm[^3] allows podcast listeners to compensate creators per minute listened, and SuredBits[^4] sold a feed of historic crypto prices on a pay-per-feed-item basis. The advantage of a usage-based business model for a community like SN is an increased flow of capital (strongly correlated with marketplace growth), thereby incentivizing more creation, thereby increasing the likelihood of active engagement, and so contributing to a self-reinforcing network effect increasing overall market health[^5].

The aim of this `snip` is to pump such a network effect and thereby contribute to the growth of SN[^6].

# Discussion

The essence of engagement-based zapping (EBZ) is that as a user engages with content on SN, each unit of content engaged will be zapped some reward after a settlement delay until an allocated EBZ budget is depleted. For example, in the simplest case, the user's `zap default` (as defined in their settings) could be zapped instantly (a settlement delay of 0) until they run out of sats (i.e. their EBZ budget is the entirety of their remaining balance).

While suitable as an mvp, there are a few downsides to this simple EBZ model. First, users may want to set aside only a portion of their total sats for EBZ. Second, a fixed size reward combined with instant settlement does not allow a user to zap content as a function of the "amount" they engaged.

> Something that could be interesting would be for the amount of time you spend on the post.
> - Ben Carman[^7]

Time is money. How could we enable EBZ as a function of the time spent engaging? We need to:

- effectively measure engagement
- delay settlement in order to accumulate engagements
- sort accumulated engagements by engagement amount
- distribute the budget across the content engaged as a function of the sort

Let's take each in turn.

## Measuring Engagement

The two units of content on SN are posts and comments. The two main post types are discussions and links[^6]. Users engage with posts and comments through one or more of zapping, reading, commenting, and navigating. 

Users can engage with any post type by commenting. Additionally, discussion posts can be engaged through reading and link posts engaged by navigating. Moreover, comments can be engaged themselves by commenting (i.e. replying), and both posts and comments can be engaged through zapping. This taxonomy of content type and engagement type can be captured in the following table.

|  Engagement  |  Discussion Posts  |  Link Posts  |  Comments  |
| :----------: | :----------------: | :----------: | :--------: |
|  zap         |  X                 |  X           |  X         |
|  read        |  X                 |              |            |
|  comment     |  X                 |  X           |  X         |
|  navigate    |                    |  X           |            |

The first step in enabling engagement-based zapping is to record which content a user enages. This requires specifying a measure for whether a user has engaged a unit of content or not. We propose two kinds of engagement measures: **discrete** and **continuous**.

### Discrete Engagement Measures

To measure engagement discretely, we specify a predicate that takes as parameters the content engaged, the type of engagement, relevant context and return true or false.

The following is a table of discrete engagement measures for each engaggement type.

|  Engagement Type   |  Predicate                                         |
| :----------------: | :------------------------------------------------: |
|  zap               |  the user zapped >0 sats                           |
|  read              |  the user visited the post for >0 seconds          | 
|  comment           |  the user commented >0 chars to a post or comment  |
|  navigate          |  the user clicked on the link                      |

Since engagement is a boolean value given a disrete measure, there is no way to compare a user's engagement across content to determine which content they engaged with more. Instead, we need to introduce continuous engagement measures.

### Continuous Engagement Measures

We can easily extend our discrete engagement measures to continuous ones by transforming our predicates into time valued functions.

|  Engagement Type   |  Measure                                           |
| :----------------: | :------------------------------------------------: |
|  zap               |  the number of sats zapped times a time weight     |
|  read              |  the number of seconds a user spent on a post      | 
|  comment           |  the number of seconds a user spent writing        |
|  navigate          |  the number of seconds a user spent offsite        |

As time valued functions, our measures now allow us to compare whether, say, a user engaged a post they read more than they engaged a comment they replied to. The downside of continuous measures is the complexity of implementation. Naive ways of tracking time can easily lead to pathaological results. Let's discuss some less-than-naive implmentations of engagement for the above types.

#### zap

Whether we should auto-zap based on zapping seems like a user preference that many would not opt-in to. If they did, the simplest implementation would be to weight each sat zapped by a single millisecond. Zaps would likely always rank low compared to other forms of engagement.

#### read

Starting a timer when a user opens a discussion post and measuring the time spent on the page is too naive since a page left open when a user is afk would count as high engagement. Instead, the time at which the post was opened should be tracked and a timer set whose moment of expiry represents the end of engagement. The end-of-engagement timer would be debounced by any scroll events. A suitable delay for the timer could be determined by the total number of characters on screen - as determined by the intersection observer api[^8] - divided by the average characters readable in a minute[^9].

Once the end-of-engagement timer expires, if the user begins scrolling again the measurement can be resumed and added to the total time engaged.

#### comment

The timestamp of the first keypress should be noted and the timestamp of the most recent keypress updated as the comment is typed. Once the comment is submitted, the time of the final keypress minus the time of the first keypress represents the total engagement time.

#### navigate

Perhaps the hardest of all the engagement types to track, a timestamp could be stored if a user clicks the link and the page goes out focus and then another timestamp taken once the page comes back into focus. The difference between the two could be treated as representing the time spent engaging the link but this seems too naive. Navigation engagement could also be represented by a constant amount of time.

## Engagement Tracking

State concerning the current EBZ period should be tracked, including each unit of engagement over the EBZ period. 

## Aggregate Engagement

At the end of the EBZ period, all engagement amounts related to the same unit of content should be summed together to represent a user's total engagement with a unit of content. 

## Sorting Engagement

Each unit of content engaged should be sorted by a user's total engagement, thereby ordering all units of content engaged in the EBZ period from greatest to least engaged.

## Filtering Engagement

Users could specify whether to distribute their EBZ budget across all content engaged or simply the top `n` engaged contents.

## Reward Functions

Finally, the entire EBZ budget can be allocated according to a curve. For example, a `constant` disbursement would distribute the budget evenly to all qualifying contents. A normalized `linear` disburesement would allocate most of the reward to the most engaged content and then linearly reduce the reward for subsequent contents. A normalized `inverse logarithmic` (steeply down and to the right) or normalized `reflected logarithmic` (shallowly down and to the right) would strongly concentrate rewards with the first or the first few most engaged contents and reduce subsequent rewards substantially.

#### example normalized inverse logarithmic reward function
```js
import { payout } from './payout'

async function normedInverseLogRewards(budget = 1, contents = []) {
  const norm = contents.reduce((norm, _, i) => norm + (1 / Math.log(i + 2)), 0)
  const disbursements = contents.map((content, i) => [content, (budget / norm) / Math.log(i + 2)])
  for (const [content, disbursement] of disbursements) await payout(content, disbursement)
}
```

## UX

### Settings

Users should opt-in to EBZ from their settings.
Users should be able to set the size of their EBZ budget in sats, initially 10 times their default zap amount.
Users should be able to set the amount of sats zapped per discrete engagement, initially set to their default zap amount.
Users should be able to set the period at which their EBZ budget refreshes, initially set to daily.
Users should be able to set whether manually zapped sats should count against their EBZ budget, initially set to true.

### Comments

If EBZ is enabled, when a user comments there should be an option to turn EBZ off for that particular comment.

# Notes
[^1]: or more accurately, shifting the effort to acquiring sats and configuring your auto-spend
[^2]: usage of SN amounts to engagement of various kinds
[^3]: https://support.fountain.fm/article/50-how-to-support-podcasts-on-fountain#howsupport
[^4]: https://suredbits.com/paid-apis/
[^5]: with SN’s sybil resistance (pay-to-post) acting as a control on junk (click-bait) content seeking to drain liquidity[&6]: This `snip` can be expanded in the future to cover polls, bounties, and jobs
[^6]: a secondary aim is to increase the tranche socialist capabilities of SN, see https://stacker.news/items/406210
[^7]: https://github.com/stackernews/stacker.news/issues/758#issuecomment-1902669164
[^8]: https://developer.mozilla.org/en-US/docs/Web/API/Intersection_Observer_API
[^9]: https://irisreading.com/average-reading-speed-in-various-languages/

econ

Global Markets: USA vs China

TomK

From my understanding, after the GFC in 2008, China was not really hit with much deflation the way the rest of the world was. They were still riding globalization tailwinds that began in the 70s, overtaking the US at most countries top trading partner, and funneling the dollars they received from the sale of exports into real estate projects all around the country. 

It wasn’t that China was immune from the shocks of ‘08 but that the lag time to experience them was delayed by a decade and a half. Now the over investment and global collateral shortage is catching up to China, with Evergrande and Country Garden’s liquidations a kind of Lehman moment: not the cause but a strong signal of the deflationary regime they’ve entered.

The rest of the world might enter a recession as well from the post GFC + Covid stimulus cycle rounding off, this will make China’s deflation likely worse.

bitcoin

Stacker News: Bastion of Tranche Socialism

Under evolutionary game theory, where losing/winning a game impacts the ability to persist one’s strategy through time, many altruistic behaviors turn out to be good for the self. 

I’m not for the use of state power to realize redistribution, nor for the imposition of involuntary capital flows from one’s own work. 

Tranche Socialism isn’t utopian socialism, it’s an expression of pragmatic millennial humanism: the idea that we can, through our free activity, realize for some duration more life begetting systems of organization.

I’m for voluntary association, and I believe tranche socialism could lead to very strong social organizations that supply a kind of participation dependent social service for the long tail of life!

culture

What Do You Believe That Other Stackers Don’t?

The Fed printing money has essentially no effect on the reduction of purchasing power. Bank reserves are not fiat currency. Bank deposits and cash are fiat currency. Bank deposit fiat currency has been a largely electronic decentralized ledger since the 1950s. Collateral is more important than bank reserves, collateral dealing is more important than all Fed activity combined. Bitcoin is better thought of as a form of disintermediated collateral than as a currency or digital cash.

Tranche Socialism

Hoping to get some critical reviews and hot takes.

> We work our socialism out in the tranches
> When we repackage, when then reallocated
> We ship in shifts and then sit inundated
> Look how our labor has now accumulated


K. Argyle Marks


##  Preface

"Tranche Socialism" could have just as well been called "Allocation Altruism" or "Long Tail Liberalism". It describes a means of redistributing accumulated capital from a common enterprise, not in the Howey test sense, but in the sense of a shared effort in which collaborators jointly contribute labor, goods, or capital; especially, a business by which one is employed or a bazaar in which one sells goods. All the ideas contained herein are derivative and in-progress. If interested, please respond with citations of prior art or similar schemes. I'd be mighty appreciative!

## Asset Backed Securities

In 1985, Sperry Lease Finance Corporation sold ~$200 million in fixed-rate notes (corporate debt, like a treasury but issued by a private enterprise) that payed monthly interest and principal, and which were collateralized by leases on computer equipment lent by Sperry Corporation (now Unisys). At a high level, an asset backed security (ABS) is a set of cashflows whose interest and principal payments are distributed on a pro rata basis (evenly) to shareholders. In reality, cashflows are broken into pools called "tranches" and ordered by their credit risk and corresponding yield.

The "tranche" in "tranche socialism" simply refers to a pool of cashflows, not necessarily debt; for example, subscriptions, recurring revenue, or an income (salary) could serve the purpose.

## Beats, Packs, and Melodies

For a time I tried selling melodies in the Michigan music market on Instagram. In an attempt to generate network effects, we partnered with producers who turned our instrumental melodies into vocal-less beats. We packaged collaborations into packs of 4 or 5 beats which we released as a drop every week on IG. We structured the compensation model as follows:

- For a given collaboration we split sales down the middle, 50:50.
- Of our 50%, 10% was reserved and placed into a tranche
- Each 10% cashflow in the tranche was spliced into equal parts (i.e. 2%-2.5% varying by pack size)
- Each slice was recombined with a single slice of every other collaboration to produce an aggregate 10% cashflow
- We then allocated these aggregate 10% cashflows to every collaborator in proportion to the number of collaborations they contributed to on the pack

On a pack of 4 beats with 4 separate producers the per collaboration split worked out to be:

- Us: 40%
- Producer: 52.5%
- Pack Collaborators: 7.5% (2.5% each)

This meant for every $1 sold of a particular collaboration. We saw $0.4, the direct contributor $0.525, and the collaborators $0.025 each. The idea here was that producers would be more incentivized to push the entire pack, rather than their collaboration alone, if they would see revenue from any sale. Analogizing with ABS:

- the 10% of income from a beat sale is a cashflow
- the tranche is the pool of these 10% sales incomes
- the securities are the aggregate 10% incomes composed of 2.5% slices from each first-order cashflow

The "socialism" in "tranche socialism" refer to the redistribution of individual income to the group via the securitized tranches as described above. 

## Tranche Socialist Enterprises

Over a given duration, say a quarter, an enterprise sells some number of goods or services into a market and concurrently completes some number of projects or tasks internally. At a high level, a tranche socialist enterprise is any business which takes a percentage of the cashflow realized over some duration, tranches (pools) and securitizes (repackages) it, and allocates securities to projects in some proportion completed in the (or, a) prior duration (e.g. the projects which loosely, or precisely if measurable, caused the tranched cashflows). Tranche socialist enterprises vary in the kind of cashflows involved, the nature of the pooling and repackaging, and the nature of the reallocation.

## Tranche Socialist Labor Unions

Probably wouldn't be a labor union, probably a PEO with exotic by-laws. We're talking tranching billing rates.

## Stacker News & Territories

I argue Stacker News and especially Territories are proto-tranche socialist. Revenue sharing is tranche socialist in spirit but to embrace the full range of expressible tranche socialisms we need the ability to adjust the split in more exotic ways. A democratic tranche socialist territory, a despotic tranche socialist territory, a meritocratic tranche socialist territory, a ... tranche socialist territory, we need them all! Especially, market based tranche socialism where we bid on tranche socialist security parameters governing the next duration at auction. Lightning is clearly the transmission media for tranche socialism, Stacker News is its festering breeding ground.

## Gramsci and Dominating the Discourse

I'm all about socialism, if its a good form of tranche socialism! Tranche socialism pools together socialism and capitalism, repackages them, and reallocates their meanings in a more interesting and motivating direction. I think tranche socialism could become so popular no one even remembers what socialism used to mean. When are the shorts? "I'm a tranche socialist, of course I allocate a portion of my income to get tranched with the network."

## Evaluating Under Evolutionary Game Theory

Left as an exercise for the reader.

## Conclusion

Tell me what you think. Can I get a Trotsky for my Lenin here? I know I'm playing, but I'm also serious. I hope that came through.

Autotranche accumulators of the world, unite!

Does anyone know of a trading platform that offers Bitcoin equity swaps against fixed or floating rate USD?