From Social Betting to Collective Knowledge — Part 3: Bettery Tokenomy

Everything you need to know about Bettery’s tokenomy model, BET Tokens, BTY Tokens, and how key metrics are calculated on our platform.

This is the series of articles that details the Bettery vision, giving everyone a full picture of the valuable future we’re aiming for with Bettery. The first article explains why we built Bettery: to let every person realize the potential of their opinions that are shaped by unique life experiences. Next, the second article demonstrates how opinions from various individuals with their own views and life experiences when combined can become collective knowledge that is trustlessly validated through our system of Events, User Roles, and Reputations. In this third and last article, we’ll be talking about the foundational Tokenomy of Bettery that makes it possible to assign value to opinions fairly depending on each person’s level of “expertise”.

Why a Tokenomy for Bettery?

Truth is, Tokenomy has become almost like a buzzword nowadays. It is commonly used to draw up a fancy marketing story about a “completely autonomous and decentralized system of value and utility”, which typically turns out to have no value nor utility at all — sometimes the decentralized part isn’t even there! This is due to poor understanding — thus application — of the value and real-world use cases of blockchain-based digital tokens. Or oftentimes, simply because of greed. Bettery’s Tokenomy is far from that. It is a comprehensive ecosystem that facilitates the input and qualification of individual opinions based on real-life experiences, altogether of which allows for the creation of collective knowledge. Let’s look at how Bettery builds its Tokenomy based on the foundational definition of real-world economics to achieve its vision of enabling trustless collective knowledge.

Here’s the definition of economics, courtesy of Wikipedia: “Economics is the social science that studies how people interact with things of value; in particular, the production, distribution, and consumption of goods and services.”

So how do user interactions on Bettery fit into that definition of economics?

• Things of value — Of course, the most valuable thing created on Bettery is the output of an Event, where real user opinions are collected and combined to form collective knowledge, which gains its value from the profile (personality, preferences, behavior) of users of different roles who provided such opinions. It attracts a demand and therefore, has a value — or cost.
• Production — Since “things of value” on Bettery aka Events are created and participated by users, Bettery users are the ones that allow for the production of things of value.
• Distribution — Bettery platform is in charge of the distribution of things of value, enabling users to create, join, and earn rewards from Events while providing knowledge-as-a-service.
• Consumption — Anyone coming to Bettery to host an Event with the purpose to obtain collective knowledge for their own purposes and pay for it. This can be a third-party business looking for user opinion, or any user deciding on, for example, the better picture to post to Instagram.

The economics of Bettery platform: things of value — production, distribution, and consumption.

As we’re proposing a new method to enable assignment of value to people’s opinions, our team will study its effectiveness intensively along the way and share all our valuable findings to the community and fine-tune the rules together to further cement our position on collective knowledge creation. Regardless, the below are fundamental principles to facilitate collective knowledge creation, which is always and only ensured through the implementation of a blockchain-based digital token economy model:

• Equal Opportunities — All users should be able to join and grow the value of their opinions, regardless of their financial status. This means equality in the “starting point” and universal rules to grow for everyone. In the previous article, we mentioned it’s important that the value of the opinion should only be validated by the contribution data of that user recorded on the platform, not by any external data. That’s why all users need to have equal opportunity when they began joining the platform and receive fair payoffs for contributing their opinions. Otherwise, their different starting conditions and differences in growth opportunities would become that missing “outside” data needed to evaluate the weight of their opinions.
• Comprehensive Incentives — All users should be well motivated to keep contributing valuable opinions and building up their expertise profile, so they can get paid from participating in Pro Events. These are Events offered by third-parties (Businesses) looking for specific market insight and user feedback, in which users can join to offer their expertise and earn money.

BET and BTY Tokens — Bettery Tokenomy Explained

To enable the key values of Equal Opportunity and Comprehensive Incentives for Bettery, we implement a two-token system for the platform: BET Token for betting on Events and earning, and BTY Token hosting Premium & Pro Events.

An overview of how BET and BTY Tokens work in Bettery tokenomy.

When you first signup with Bettery, you’ll get some free BET Tokens to get started, 10 BET at the Tokenomy launch. By winning, validating, hosting, or advising on Events, you can earn more BET Tokens and increase your Reputation score for each role: Player, Expert, Host, and Advisor respectively. By increasing Reputation, you can eventually join Reputation-gated Pro Events that reward a large number of tradable Tokens with real-world value.

BET Tokens can’t be purchased on crypto exchanges, nor can they be deposited into your Bettery account. They can only be earned through taking part in Events on the Bettery platform and there’s never a scenario where your balance would be zero or negative BET Tokens. Because even when you lose bets, you’ll get some BET Tokens to keep going.

You see, non-Pro Events (Regular and Premium) also generate additional BET Tokens for the platform in a process called “Token Minting”, as a result of their contribution to creating collective knowledge. These Minted Tokens will be rewarded to all users of that Event, no matter if they won or lost. In this way, users will always have a sufficient BET balance, thus motivation to grow their Reputation to earn big from Pro Events since only your Reputation can reach zero or negative status, which will affect your ability to take part in certain roles on the platform or in certain Events. More info about this can be found in our Bettery user roles article.

How BET Tokens help: BET Tokens give everyone equal opportunity to get started and continue having fun for free always while removing the perceived “gambling” aspect of social betting.

Why shouldn’t real money be used? Because a monetary commitment of, say, $20 has a different meaning for different people because we all have different financial capacities. For some, it’s merely a chump change to get a quick afternoon snack. For others, it could be almost a week’s worth of meal expenses. Depending on how each person values this monetary amount of commitment, they’ll be more or less willing to lose or gain this amount. Meaning they’ll be motivated or demotivated to host, bet, and validate Events on the platform, actions that will increase or decrease their Reputation, and thus, eligibility to take part in money-earning Events. This creates inequality between different users.

Since BET Tokens don’t directly have a real-world monetary value and can only be obtained by using the Bettery platform whether you win or lose bets, they’re the perfect answer to solve this inequality since:

• Users of all financial capabilities have equal access to social betting on Bettery as they bet using the free BET they earn from signing up, joining Events, and winning bets only, not from any external sources.
• Users of all “betting skill levels” and role preferences have equal opportunity to grow their Reputation, thus access Reputation-gated Pro Events, since there’s never a situation where your BET balance reaches a “can’t do anything more” level.

So why even try to increase your BET balance and Reputation if BET Token doesn’t have any direct real-world value? This is where BTY Token comes into play.

How BTY Tokens help: Users can exchange BET, in a one-way conversion at 1:1 ratio, into BTY, Bettery’s official tradable token. BTY Tokens assign a real-world value to all actions and contributions made by users on the Bettery platform. Since BTY is a tradable Token accessible outside of the Bettery platform, it can be purchased from supported exchanges and get deposited into your Bettery account. Anyone who wants to host Premium and Pro Events needs to spend BTY Tokens as they’re used as the Event reward for participants, converted to BET at 1:1 ratio when rewarded.

Beginners and users who haven’t built up a high Reputation can earn BET from Regular and Premium Events before being able to access Pro Events that reward a large amount of BET converted at 1:1 ratio from BTY. This way, earning lots of BET is a huge motivation that will keep users hosting, advising, betting, and validating Events on Bettery — which boosts the platform’s value by providing it a sustainable way to attract and retain active users.

Since accessing Pro Events require a sufficient level of Reputation from users, the collective knowledge gained from such Events are ensured to be of high quality, as the “legitimacy” of these users’ opinions have been universally and trustlessly validated from the previous Events that they successfully attended.

So how exactly does it all work and how can Event outputs be evaluated in tokens? Let’s dig deeper into the Tokenomy of Bettery in the next section.

How does Bettery Tokenomy work?

Let’s define the rules of Bettery Tokenomy. Each rule has its number and those numbers will be used in the next articles from now on. Also, the rules are combined depending on their purposes for easier navigation:

• Rules 1, 2: Token Supply
• Rule 3, 4, 5, 6: Token Distribution
• Rule 7, 8: Token Demand

Here is a summary of the Token Distribution rules. Full details are below (caution: it gets lengthy and number-y).

How BET and BTY Token rewards are shared to each role in different types of Events.

Rule 1: BET Tokens are minted by Events only; there is no pre-minted BET supply.

Important takeaways:

• Max supply of BET+BTY Tokens is 10,000,000,000 (ten billion).
• BET Minted Tokens’ supply rate is reduced over time until maximum supply is reached.
• The higher the total bet and number of participants, the more BET Tokens minted.
• The more controversial the outcomes, the more BET Tokens minted.

Naturally, Event awareness and value increase with more participants, so the Bettery platform rewards the Event’s creation of collective knowledge with additional BET accordingly. This special reward is called Minted Tokens. The number of Minted Tokens by an Event is calculated based on 4 parameters:

Minted Tokens = [Average Bet] X [Number of Participants] X [Controversy] X [Growth Factor]

Controversy is a number from 0 to 1 that indicates the level of disagreement. It is calculated as:

Controversy = ( 100— [Most Betted Outcome] + [2nd Most Betted Outcome] ) / 100

Most Betted Outcome (MBO) is the outcome that most Players in the Event betted on. Some examples:

• 2 Outcomes. MBO = 52%, 2nd MBO = 48%. Controversy = 0.96
• 3 Outcomes. MBO = 95%, 2nd MBO = 3%. Controversy = 0.08
• 3 Outcomes. MBO = 45%, 2nd MBO = 40%. Controversy = 0.95

Growth Factor (GF) controls the supply reduction of Minted Tokens following the growth of the Bettery user community. The supply rate of Minted Tokens needs to be reduced to accommodate the constant growth in user base size and event library of the platform. This is how the GF work:

GF = 1.0 — Total Supply / Max Supply

Let’s look at an example where 85 Players, 9 Experts, 1 Advisor, and 1 Host participate in an Event with three outcomes. The average bet is 10 Tokens and 50 Players bet on the winning outcome, 35 Players lost with 25 betting on the second most betted outcome and 10 on the least betted outcome.

• GF = 1.0, Controversy = 1 – 50/85 + 25/85 = 0.71
• Minted Tokens = 10 x 96 x 0.71 x 1.0 = 682 Tokens

Rule 2: Minted Tokens (BET) are produced only by Regular or Premium Events with maximum public visibility (MPV Events)

To become MPV, an Event should:

1. Be a Regular or Premium Event — open to the whole Bettery community to join as Players and Experts.
2. Have at least 24 hours for a Betting time.
3. Be finalized successfully and not canceled (see Rule 8 about Event cancellation).
4. Have the number of required Experts defined automatically by Bettery instead of being set to a fixed number by the Host.

Rule 3. Minted Tokens (BET) are distributed to all Event participants, including losers

Important takeaways — how Minted Tokens are distributed:

• 50% to Players, proportional to their bets.
• 10% to the Host.
• 10% to Right Experts with positive Expert Reputation, proportional to their Expert Reputation. If all Right Experts have zero or negative Reputation, then the amount goes to the Community Marketing Fund.
• 8% to Community Marketing Fund, out of which:
• 2% if given to the Advisor if the Event has one, 1% extra to the Host.
• The remaining (5% or 8%, plus a possible 10%) is reserved for community marketing programs.
• 2% to Event Moderators Fund.
• 10% to Referrers.
• 10% to Bettery Development Fund.

Below details of this rule will be explained based on Minted Tokens example given in Rule 1 where:

• Controversy = 0.71
• Minted Tokens = 682 BET Tokens
• Average Bet = 10 BET Tokens

Players share 50% of the Minted Tokens according to their bets. To illustrate that, let’s add more details into our example:

• Minted to Players = 0.5 x 682 = 341 Tokens
• Prize Pool = 35 x 10 = 350 Tokens
• Win of a Player with Average Bet (of 10 Tokens) = 350 / 50 = 7 Tokens

Let’s imagine that out of 85 Players, there are 2 winners with bets of 15 and 5 Tokens and 1 loser with bet of 10 Tokens. They win or lose, together with Minted Tokens, as following:

• Winner with bet 15: Receives 15 / 10 x 341 / 85 = 6.02 Tokens from Minted, also 15 / 10 x 7 = 10.5 Tokens from Losers Pot, total receives 6.02 + 10.5 = 16.52 Tokens.
• Winner with bet 5: Receives 5 / 10 x 341 / 85 = 2.01 Tokens from Minted, also 5 / 10 x 7 = 3.5 Tokens from Losers Pot, total receives 2.01 + 3.5 = 5.51 Tokens.
• Loser with bet 10: Receives 10 / 10 x 341 / 85 = 4.01 Tokens from Minted, also loses 10 Tokens, total loses 4.01–10 = -5.99 Tokens (negative sign to indicate the loss). This way, the losing Player doesn’t lose the whole bet (10 Tokens), but a part of it only.

Host gets 10% of the Minted Tokens. Minted to Host = 0.1 x 682 = 68.2 Tokens.

Experts who voted the same as the majority (they are Right Experts) share 10% according to their Expert Reputation. Let’s assume that out of 9 Experts, 5 voted for the same outcome which is the correct one, also assuming their Expert Reputations are 1, 2, 3, 4, and 5. That means:

• Minted to every Right Expert = 10% x 682 x Expert Reputation / [1 + 2 + 3 + 4 + 5]

In our example, Right Experts will get:

• With Reputation 1, gets 4.55 Tokens.
• With Reputation 2, gets 9.09 Tokens.
• With Reputation 3, gets 13.64 Tokens.
• With Reputation 4, gets 18.19 Tokens.
• With Reputation 5, gets 22.73 Tokens.

8% of the Minted Tokens reserved in Community Marketing Fund. In case Host chooses topic from an Advisor, then Advisor gets 2% from the Event (0.02 x 682 = 13.64 Tokens) and Host gets 1% additionally (0.01 x 682 = 6.82 Tokens). If there was no Advisor, then all that 3% (0.03 x 682 = 20.46 Tokens) remains for future community marketing initiatives along with 5% (0.05 x 682 = 34.1 Tokens), resulting in a total of 54.56 Tokens for the Community Marketing Fund.

2% of the Minted Tokens reserved in Moderators Fund. This amount which is 0.02 x 682 = 13.64 Tokens goes to Moderators that receive periodic payouts according to the activities they perform to ensure the quality of Events including reporting Event topics, outcomes, and comments that violate the Community Content Rules.

10% of the Minted Tokens go to Referrers. Referrers attract more new users to the Bettery platform and spread the value of Bettery to potential audiences, thus helping Bettery with marketing activities. Referral Program has 3 levels, where Referrers receive 4% from the first level, 4% from the second level, and 2% from the third level.

10% of the Minted Tokens go to Bettery Development Fund. We use those Tokens for various activities like hosting our own Premium & Pro Events to get community opinions on Bettery roadmap and Tokenomy parameters, expenses to keep developing Bettery platform, rewarding newcomer BET Tokens to new users, etc.

Rule 4: Prize Pool consists of the BET bets of Players who lost, and is distributed to Winning Players, Right Experts, Host, and Advisor

When validation is over and Experts provided their decision on the winning outcome unless an appeal procedure initiated (TBD later), the Prize Pool in Regular and Premium Events is distributed as below:

• 90% to the Winning Players, proportional to their bets.
• 4% to the Host.
• 4% to the Experts with positive Expert Reputation, proportional to their Expert Reputation.
• In the case of the Event had an Advisor:
• 1% to the Advisor
• 1% extra to the Host
• Otherwise, 2% is added to the Experts reward, giving the Experts 6% in total.

For Pro Events, 100% of the Prize Pool is distributed to the Winning Players.

It’s important to mention that Bettery does not share any portion of the Prize Pool (there is no House Edge). At the same time, Bettery pays for all the transaction fees that may occur when users place bets. Together, it makes social betting on Bettery entirely fee-less, commission-less, fair, and transparent.

Rule 5. Users receive an amount of BET upon signing up to Bettery

These BET (called Newcomer BET) are given for free automatically upon signing up with Bettery to enable the “Equal Opportunities” principle for all users. It’s important to note that other roles — Host, Expert, and Advisor — do not require spending any BET, while everyone can earn BET as a reward for participating in any role, so users don’t always have to risk their BET to earn more BET. This way, Bettery can be enjoyed by users who aren’t willing to task risks, while also providing users different ways to earn BET in case their balance runs too low. Newcomer BET is calculated as:

Newcomers BET = 10 x [Growth Factor]

Newcomers' BET is taken from the Bettery Development Fund or borrowed from the future income of the Bettery Development Fund. In the latter case, Tokens are minted in advance but then will be burned as many and as long as necessary once Bettery Development Fund begins to generate income to fully compensate Newcomer BET.

Rule 6. Event Modification and Cancellation

No Event participants, including the Host, can cancel an Event after its betting time starts. Events are canceled by Bettery automatically by a Smart Contract in the following cases:

1. No Players joined within betting time.
2. Not enough Experts joined within 72 hours after betting time ends.
3. No Players lost so there is no Prize Pool.
4. All Players lost so there is no one to receive the Prize Pool.
5. The correct outcome was not resolved successfully through Appealing.
6. Community Moderators (users with Moderator role) reported the Event for inappropriate content. More details will be clarified in the coming article, Bettery Community Moderation.

Rule 7. Users cash out their BET Tokens by swapping them into BTY

This is probably the most exciting part of the Bettery that enables all roles to earn real money which is BTY Tokens. Users are able to swap their BET Tokens into BTY, one-way, with a 1:1 exchange rate so they can sell their BTY on exchanges or use them to host Premium and Pro Events. Here are the conditions for users to cash out BET into BTY:

• Have their KYC profile verified on Bettery. This data is never used in any way other than to prevent fake account registrations.
• For the first cash-out, participate and win as a Player at least in one event, participate and successfully validate as an Expert at least one event, and host at least one successfully finished event. After the first successful cashout, users can cash out any amount higher than the Newcomer BET.

In order to prevent the transfer of BET into one account and cashing out Tokens from fake registrations and, most importantly, to prevent organized BET trading which will cause unequal opportunities between users, Bettery technically prohibits by the Token Smart Contract using BET for any other purposes except placing bets, swapping BET into BTY, or burning BET.

Rule 8: Premium and Pro Events need BTY from the Host as a reward for participants

When hosting Premium or Pro Events, the Host needs to add BTY Tokens to the Event and they will be distributed as a reward for participants as BET that users can swap into BTY and cash out. This makes Premium and Pro Events more attractive to participants, thus enabling Hosts to effectively organize promotion and user survey activities.

For Premium Events, BTY is distributed as below:

• 75% goes to the Players who won as BET, determined by each Player’s bet size.
• 15% goes to the Right Experts with positive Expert Reputation, determined by Expert Reputation. In case all Right Experts have zero or negative Expert Reputation, 15% is added to the Players rewards.
• 10% goes to Bettery Development Fund.

For Pro Events, BTY is distributed as below:

• 75% goes to the Players as BET(who won and who lost), determined by the Reputation of the user role set by the Host.
• 25% goes to Bettery Development Fund (there are no Experts in Pro Events), 5% of these goes to Referrals who receive 2% from the first level, 2% from the second level, and 1% from the third level.

When organizing Pro Events, Host sets:

• Budget in BTY to spend for the Event.
• Minimum Reputation to join (among other attending criteria like Subjects, Location, and more) that participants should meet, for example:
• Average User Reputation, or a specified number of Player, Host, Advisor, or Expert Reputation.
• Number of participants.

Each participant shares a reward proportional to their role Reputation as specified by the Host.