Good story! It was a fun read. But I wonder if results of this kind could actually be achieved in this context.
Steem tokens derive value from increases to influence (which increase curation rewerds) and from their use as a cryptocurrency (payments and store of value).
Influence is generally more valuable the larger the network. True that influence on a local publication might actually be extra valuable to locals, but that pool of people is small so overall, demand for influence would be much lower than for influence on Steem.
Value of use of DAILY as a cryptocurrency, unless features are incorporated which differentiate it from others on a functional level, will quickly drop to zero. I don't think a plain vanilla SMT would accomplish this goal.
Increasing curation rewards only has value to the extent that other uses of the token have value, so it would help but not too much in this case.
Use of DAILY token as a means of loyalty rewards (discounted subscription) and as a means of allocating influence is interesting and fun. I do believe that it could add value to a publication like this by increasing reader engagement and offering perhaps more efficient payment models that make it more attractive for advertisers. I just have a strong suspicion that total value achieved for a small newspaper like this will be somewhere between what you describe for month 3 and 4 (especially if you consider that other similar platforms out there will be implementing SMTs or other loyalty tokens, too).
To take it to the next level, the DAILY should have additional uses for holders that make it more valuable. What if DAILY holders could use the tokens to set bounties for articles by authors, giving them a more direct voice in news coverage? That would certainly have value to some readers, and that value would drive up demand for DAILY tokens. The increased demand, and therefore price, of DAILY would benefit the entire platform. Sort of like what I've written about here: https://steemit.com/blockchain/@futureprecedent/london-says-goodbye-to-uber-can-we-say-hello-to-giving-free-rides-instead
What do other Steemians think?
It could be done a little differently than OP suggested and it would work well. Look at this as an example of what a local currency can do: www.tetla.org
Something like that could easily include a news organization whose smart tokens could be exchangeable with the local community currency.
Any currency and economy derives much of its value from belief and perception. As long as there are demand drivers and people who are willing to put short term interests aside to help build something by stimulating more utility and demand, then anything is possible.
There have been somewhere in the neighborhood of $1 billion worth of cryptocurrency ICOs this year, most of them with half baked ideas and business plans that were less developed than this one, using platforms like Ethereum which have much higher costs than Steem's SMTs will have. Are you going to tell all of them that they have no future because there will be no demand for their smart contracts? Investors seem to see quite a bit of value.
The DAILY example is only different in that it is distributed to real people for practical uses rather than hyped to greedy investors. Yet given a choice between most of the stuff I've seen ICO'd on Ethereum this year and the chance to buy some DAILY, I'd choose the DAILY and hope they can make something of it. Get some smart, enthusiastic people involved and those additional uses will come also.
@techwriter, @donkeypong -- Thanks for your feedback!
@donkeypong -- I agree with you on some ICOs having poor value propositions, that's for sure... And I agree DAILY would have some value. However, we should critically examine what these value drivers are.
Currencies derives their value as technology which facilitates trade. Belief is required to make this work, but it is not itself what creates value. Belief may also influence price, but price is not value. Most believe that price must eventually converge to value (and not the other way around).
Examining Steem's existing tokens as a proxy for SMT, these tokens derive their value primarily from 2 internal (i.e., within the native platform) and 1 external use:
My point about value as cryptocurrency dropping to zero is that, especially as we have new and better crypto coming out, unless Steem and other SMTs build in features that make them a better payment mechanism (at least in certain circumstances) than fiat and other crypto out there, no one is going to want to buy Steem/SMT/DAILY to make payments to people outside the native platform. E.g., you're not going to buy stuff from Amazon with SMT. You'll convent to a fiat or perhaps another crypto.
As for internal uses, influence does have value, but influence over local news will have less value overall than same level influence on global news. Hence, I think DAILY can achieve some of the milestones in your story, but not all. My guess is that the value would cap somewhere around what you describe in months 3-4.
Earning more curation rewards is only valuable to the extent that the token has other valuable uses.
You could try to create additional value for SMTs like DAILY by restricting aspects of platform usage to token-holders, like subscription services or buying add space. But if the same platform features could, from a technology perspective, just as well be accessed with fiat or some other crypto, than forcing subscribers/advertisers to convert to DAILY to access these features results in deadweight loss in the economy overall, although it may serve to increase the value of the token. I call this phenomenon value diversion, and it is ubiquitous across token-based projects. In some cases they are is a great enough economic benefit to offset the cost of value diversion, but in others there is not. We should all be very careful when examining the merits of tokens whose value derives from value diversion...
Giving discounts on subscriptions/ad-space purchases to people who pay in DAILY is essentially just a loyalty rewards program. These types of programs have been valuable to many corporates. However, we should also examine in each case whether the SMT is the best available way to track loyalty (on a cost-benefit basis). If not, we should consider other methods of achieving the same result (e.g., just giving discounts to repeat customers).
tl;dr—I think SMT are a really cool idea that can have big benefits for some platforms, although my suspicion is that the most benefits will be reaped by the largest platforms, where influence is the most valuable.
P.S.: If you are interested, I've recently written a paper exploring the topics we've discussed in this thread. In case you are interested, you can read about it in this post, or read the full paper here. The paper contains a case study on Steemit which might be of particular interest. Very grateful for your feedback if you get a chance to read! Trying to crowdsource some peer review :)
The larger scale programs will have the most value for SMTs. But at the opposite end of the spectrum, they also have value for loyalty rewards, and there's nothing wrong with that. The ones in between and the potential for upward mobility as some of them combine or add demand drivers will be very interesting to watch.
Agreed!