Props Whitepaper 2.0

We are happy to share these updates with the community

We are excited to announce the launch of the Props Whitepaper 2.0, which is the culmination of over a year of research into further evolving the Props Protocol into a fully decentralized network, with the right balance of incentives, to achieve compounding success. For those who have been following along from the beginning, we take the opportunity to discuss some of the biggest changes from the current design.

Staking

Today, only a handful of entities (Apps and Validators) can earn rewards from the Protocol for performing work. In the new design, any Props holder will be able to stake their Props and earn rewards for participating. This is an important step towards becoming a protocol that is owned and operated by its users.

Subjective Rewards Distribution

Today, rewards are distributed based on the raw metrics of each app (number of users, total Props held and median Props per user). While in theory it’s good to use objective on-chain data, in practice it creates challenges. Such metrics are possible to fake, making it difficult to scale beyond a set of trusted Apps. Further, in order to truly evaluate the value of each App to the protocol, additional factors need to be taken into account.

In the new design, rewards are allocated based on the subjective evaluations of Stakers, who are able to consider off-chain data (such as the quality of Props benefits the App offers) in their decision making. Staking rewards are also structured so that when Stakers act selfishly to maximize their own rewards, it produces information about which Apps are providing the most demand for Props, similar to how prediction markets work. The end result is a system that can more accurately evaluate the contributions of different Apps, and importantly, removes the need to trust any participants.

Removing Validators

Now that App Rewards are to be determined by Staking data, there is no longer a need for the role of Validators, who act as Oracles to the protocol. Removing this role will greatly simplify the protocol, and is to reduce a key centralization risk and attack vector.

App Points

One of Props’ greatest strengths is the shared Props Token that can be easily integrated by any App without the heavy lifting of deploying one’s own token. However, when modeling how Props could grow to hundreds and thousands of Apps, we identified a need for Apps to have their own internal points systems where value could more closely correlate to the success of each App.

Decentralized Governance

When combined, the above changes set the stage for the Props Protocol to be fully compatible with decentralized governance. This has always been a long-term goal, and we are excited to continue to work towards placing control of the Props Protocol entirely in the hands of the Props community.

To explore all of these topics in more depth, please check out the whitepaper, and reach out to us on Telegram and Discord with any questions.