BrightID “Sponsorships”
By: Adam Stallard
Tags: Humanity, Nonprofit, Identity, Unique, Funding

BrightID “Sponsorships”

Long-term funding for a public good

In a previous article, we saw how Aleeza, Philip, I, and others arrived at “sponsorships” as the preferred sustainable method for funding BrightID. Now I’ll add my thoughts on why we’re using sponsorships precisely the way we are.

First — as a recap — what are “sponsorships?” A sponsorship entitles a user to share their proof-of-uniqueness with applications. It’s paid once — by an application — and is good for the lifetime of the user across all applications. We set the price at $1 DAI (subject to increases to keep the true cost stable, as approved by BrightID Main DAO). We set the cost low enough to not be a burden to anyone while allowing BrightID as a public good to be continuously funded. It’s not burdensome to users because it’s paid by the apps they use. It’s not burdensome to apps because it has a value for apps that I’ll discuss later.

Why Opt-in?

The sponsorship system is opt-in. If an application doesn’t find sponsorships valuable, it can choose to create its own front-end for managing users’ BrightID keys, and run its own nodes to analyze the BrightID social graph. Funds collected through the sale of sponsorships go to BrightID Main DAO, which uses its budget to grow the BrightID network, research new graph analysis and privacy methods (including subsidizing users who run nodes), and develop new front-ends and use-cases for BrightID. An application that doesn’t opt-in can’t be funded through this method; it has to figure out how to fund itself.

Besides being eligible for funding through the BrightID Main DAO, applications that opt into the sponsorship system can benefit more from the network effect of other apps that bring in users. A person that started using BrightID to gain access to a certain app will soon find an array of other apps they’re already verified to use. If a certain application didn’t have the funds to buy enough sponsorships for its users, it can simply send them to another application that does. This benefits both applications: the first receives the benefit of having its users verified through BrightID for free and the second receives the benefit of new users trying it out for a very low user acquisition cost ($1 DAI).

Where to Collect?

Now that I’ve recapped how sponsorships work and why it’s a useful and valuable system, let’s talk about how we arrived at the current implementation. As a public good, BrightID should thrive on donations from those who benefit. There are two possible levels of beneficiaries: apps and users. All users are on the BrightID platform to use apps, and apps seem a simpler target since they are more likely to have funds on hand. Of the possible action or transaction points where funds can be collected, let’s consider “making a connection” and “sharing a verification with an app.” The benefit of collecting funds at the time a user shares a verification as opposed to at connection-time is that the app doesn’t waste money paying for users that may turn out to be sybils and therefore won’t be verified. It’s also clear at the verification-sharing time that the user is there to use a particular app, whereas at connection-time this isn’t yet known.

Let’s continue with the idea of collecting a fee at the time when a user shares a verification with an app. Verifications are most useful when re-checked with some regularity to make sure that a user hasn’t died or had their verification revoked. We don’t want to discourage frequent checks by charging a fee for each check. It’s therefore preferable that one payment pays for all checks for a single user. This is basically what a sponsorship is. Once an application has paid for a sponsorship for a user, that user’s verification can be checked as often as needed.

Rich Apps / Poor Apps

The final point to consider is: what do we do in the case that an application can’t afford to buy sponsorships for its users? We could allow apps to figure out for themselves how to pay for this expense, but let’s consider what an application in this situation has as valuable collateral: users. It seems to make sense that if we allow an application to send its users to try out another application, this could be a valuable arrangement for both: the first application receives free sponsorships, while the second application receives users they may not have gotten otherwise. This is what we’ve allowed to happen by saying that a user’s sponsorship is good across all applications and lasts a lifetime.

Humanity (re)Fund

The price of a sponsorship is $1 DAI per user per lifetime, is good across all apps, and is stabilized through voting by the BMAIN DAO. This should provide plenty of funding for BrightID indefinitely. BMAIN DAO is disallowed by its articles of incorporation from making a profit. If the time comes that there is more in BMAIN DAO’s vault than what is needed, it will be returned to all of humanity as a refund. Yes, we can do this with BrightID and Hedge for Humanity’s aptly-named Humanity Fund.

Before you go

Some useful links for BrightID all in one place:

* BrightID

* Hedge for Humanity

* Sponsorships and Subscriptions

* BrightID Main DAO’s constitution

* Discord (chat)