Introduction
OneCommons will be funded by end-users paying subscription fees to access premium services beyond a free tier. In this way OneCommons is like a Netflix for web applications and SaaS services, where the user pays one monthly fee to get access to all the services running on OneCommons.
Based on the end-user’s usage, their subscription fee is divided among participating organizations as follows:
- Site and Service Operators: for the websites that were visited and for the services those sites utilized.
- Cloud Providers: for the servers, bandwidth, etc that were used.
- Developer projects: for the code that was run by these sites and services.
- Users: for consumed data and content that were authored by users.
- Platform roles: for the overhead of running the platform.
Allocation of subscription fees
The platform tracks the usage of services, code, and data throughout but determining how to assign value to that usage is a fundamentally hard problem. Instead, we can rely on market forces through a simple set of rules:
- The user’s subscription fee is divided among the operators of the sites and service that they directly and indirectly utilized.
- Cloud providers charge the operators for the resources they consumed.
- A fixed percentage of the fee is set aside to be divided between the developer projects whose code was utilized by those services.
- Similar fixed percentages are set aside for platform overhead and for a pool to compensate for user contributions.
These fixed percentages are essentially a minimum and it is expected site and platform operators would negotiate higher percentages with developers based on their needs, essentially commissioning new development or maintenance. To prevent free-riders, we could require that if one operator grants special allocation rights then all operators need to follow them.
The owners of these organizations can choose to further divide their share among the individual participants in their organization. A cloud provider or site operator that is a commercial entity may choose keep their compensation and pay their employees as they see fit but collaborative projects – such as an open-source developer project – may choose to set up allocation rules for its contributors. This is easy because this subscription fee share is allocated using CommonCents tokens.
Subscription Tiers
All user-facing applications provide levels of service at one or more of these subscription tiers:
- anonymous free tier
- free tier (but login required)
- paid (premium) tiers
- metered tiers
If a user subscribes to one of these tiers they will have access to all services on the platform available at that level (except for metered tiers where individual services may exhaust a user’s credits).
Pricing
Despite the fact that subscription fees are fixed platform-wide, individual entities in the ecosystem have control over the price of the services they provide:
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Site and service operators have control over their pricing by choosing what service levels they want to provide for different subscription tiers.
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Cloud providers are free to set the prices for the services they provide to the platform.
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Developer projects can control pricing by negotiating allocation rights directly with service operators.
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Individual contributors exert control by choosing projects with favorable allocation policies.
The prices for end-user subscription tiers themselves are relatively immaterial as there can be a range of tiers. What is significant is the resources available to the anonymous and free tiers – this is primarily set by cloud providers based on how much of a loss leader they want to bake into the rates they charge the platform.
CommonCents tokens
End-users pay for subscription with dollars or equivalent but internally they are converted to CommonCents tokens. As the usage of resources, services, code, and data are tracked by the platform, recipients receive their share in tokens based on the allocation rules described above. They can choose to have them transparently and automatically redeemed for dollars or hold them.
CommonCents tokens provide many benefits:
- A token’s value is based on a share of the platform’s total subscription revenue, so their value will grow as the platform grows.
- Thus they provide a bootstrapping mechanism to incentivize everyone to get involved early.
- Token allocation is implemented through smart contracts, enabling participants to cheaply and securely experiment with a wide variety of approaches to providing compensation and financing development.
- Tokens can used as external securities to enable outside investment for individual projects and the platform as a whole.
- Subscription fees provide a backstop with liquidity and price stability guarantees.