ETHERLive
ETHERLive delivers real-time price and volume data across 16+ exchanges to users in a clear and easy-to-understand package. Users can get up-to-the-second updates for each exchange/currency pair, as well as aggregated market averages for each exchange, currency, and the market as a whole. It also provides a global converted average of all the currency pairs monitored by ETHNews, converted to USD.

---

24hr ---
--%
Wednesday Oct 17th 2018
RESOURCES

The Basics

Learn the basics of Ethereum and various cryptocurrency technologies

Learn More

What is Ethereum?

Understand the underlying principles of the Ethereum Platform

Learn More

The Blockchain

Discover the revolutionizing technology known as the blockchain

Learn More
SUBMIT

Press Release

Submit a press release for consideration on ETHNews

Submit Press

Story / Dapp

Submit a story or DAPP to be considered for publication on ETHNews.

Submit Story

Explanation

Submit "Ethereum Explainer" content for consideration to be featured on ETHNews

Submit Topic
ETHNews Logo
---
--%
Home
News
Etherlive
Ether Price Analysis
Resources
Contact Us

The Incentives That Make FOAM Function

By

Media

Team

WriterETHNews.com

Back on September 6, FOAM launched its decentralized consensus-driven global map application, which is now available to a limited audience on the Ethereum mainnet. But there’s been a lingering question since it went live: What’s in it for users?

FOAM describes itself as a protocol that "empowers users to build a consensus-driven map of the world." It uses what is called a "token curated registry," which basically means a verified list of locations. To verify a location, cartographers (anyone using the protocol) use FOAM tokens to claim that a point of interest (POI) exists at a particular location, and other token holders vote whether to approve its addition to the list. Essentially, it's crowdsourcing a global map without a central authority, distributing value back to the participants that are responsible for its creation.

The release of the new FOAM map is only available to those who bought FOAM tokens during the company's initial coin offering. (Those who missed the sale will have a chance to participate at some unknown point in the future). As part of the purchase agreement, and as a way to begin populating the map, token holders are required to place at least 10 POIs on the FOAM map before they can transfer their tokens outside of the FOAM protocol. (They're held in a MetaMask wallet.) This requirement is automatically enforced by an EDCC (also known as a smart contract).

There is currently a 45-day period during which FOAM tokens are available to use on the FOAM map but not transferable. These rules are intended to incentivize use and ensure that participants become familiar with the interface. The 45-day freeze on token transferability is called the "initial use period" and is slated to end on October 22.

Participants add a new point of interest by inputting information such as street address, place description, and relevant tag words. The participant must stake at least 50 FOAM tokens to register that POI. These tokens are held as a bounty to incentivize participants to challenge an illegitimate listing. (More on that later.)

Why Would You Want to?

What would make token holders want to spend their hard-earned money to create this map in the first place? According to King:

"You are not actually paying the tokens, because you still own them. The minimum deposit is meant to be a spam prevention mechanism and a way to have skin in the game so that people adding to the map have something at stake."

It's unclear under what conditions a person's staked tokens are released back to their wallets, but King told ETHNews that participants are incentivized to grow the FOAM map for two reasons. First, doing so may increase the value of FOAM tokens – the more people use them, the more perceived value they have. Second, cartographers might simply be encouraged by the opportunity to create and be a part of something new, useful, and cool. In other words, the same types of reasons that people update Wikipedia articles.

POIs that are posted are added to the map after a three-day waiting period. That is, unless they are challenged…

Challenger: Ready

Where it gets interesting is when users challenge a listing. For whatever reason, a POI may be wrong – a store might want to confuse its competitor's customers, someone could be trolling, or someone could enter the wrong information accidentally. In such cases, FOAM users can dispute the validity of a POI. To do so, a challenger must stake a minimum of 50 tokens, and then describe what information is wrong and why.

Once a challenge has been initiated, voting begins. During this phase, any FOAM token holder, including the challenger, can vote on whether the POI should be removed from the map. Voting is done through token-weighted "voting credits." Each credit equals one vote, and participants can cast as many votes as they desire. For example, if you had five tokens, you could place all five tokens on one challenge, but if there were two challenges happening simultaneously, you'd have to decide how to allocate those five votes.

The winner is decided by the number of votes cast. If the challenger is successful, they receive their deposit back plus 10 percent of the reward pool. The other 40 percent is distributed among the winning voters. If the challenger loses, their deposit is distributed to the cartographer who registered the POI as well as to voters on the winning side, theoretically dissuading them from making frivolous challenges.

Preventing Manipulation

Due to unlimited voting, it seems like the FOAM map is open to manipulation. For example, what would stop a person who owns a lot of FOAM tokens from staking more than everyone else and stealing the challenge?

In last week's community call, King stated:

"As it stands now, it is up to the cartographers to be vigilant. We will be building network analytical tools and ways to track reputation to see if it is a genuine voter or challenger. Ultimately, people have to protect the value of the network that way until future registries have more robust punishments. We are aware that there are potential ways to undermine the system and we think that adding inflationary rewards to the subjective work would actually create more perverse incentives to drain rewards at lower quality points. This is why we feel so strongly about the incentive mechanism through value creation."

In other words, the team doesn't really know yet how to make sure people don't game the system, and it's hoping that making something cool is enough. But in case it isn't, the answer may lie in where FOAM sees proof of location heading.

Dynamic Proof of Location

The current static proof of location system uses crowdsourcing to verify POI. The next phase uses something a bit different, what the FOAM team calls dynamic proof of location. Dynamic proof of location describes "a time synchronization protocol intended to ensure continuity of a distributed clock, whereby specialized hardware can serve as a Zone Anchor and synchronize nodes' clocks over radio to provide location services in a given area, called a Zone." Put more concretely, it involves four "beacons" all spread out across one geographic location (a neighborhood, perhaps). The space in between those beacons is called a "zone." Those four beacons would synchronize their clocks. Then, any person or entity within that zone who wants to prove their location would send out a signal to the four beacons. By measuring the time it takes for each beacon to receive that signal, the beacons could then determine the location from where the signal was sent. (A video explaining this system can be found here.)

The limited release of the FOAM map Dapp allows users to signal "areas where they need decentralized location-based services." According to King, "Signaling is used to influence where you want people to be working on Dynamic Proof of Location. This would affect rewards and incentives in the future for that location."

To start the signaling process, cartographers would still need to stake their FOAM tokens to indicate that a POI must be proven through dynamic proof of location. However, this method promises greater accuracy and would reduce the possibility of false POIs. The function is not yet available but will be launched on the Foam Map before the initial use period expires. Still, given the hardware and resource costs involved, it won't immediately replace static proof of location.

FOAM's Future

The FOAM map is up and running, and many POIs have already been verified. But one must wonder whether the novelty of this new form of cartography will wear off or instead snowball, as the team envisions. Will the incentives for participants increase? Will the cartographers continue to work on the map if the value of FOAM tokens drops? And, will the token curated registry find ways to subvert malicious practices? Although the idea of the FOAM map is unique and potentially useful, the developers still have some twists and turns to navigate before reaching their final destination.

Media Team

The media team is the collaborating entirety of the writing staff at ETHNews

ETHNews is committed to its Editorial Policy

Like what you read? Follow us on Twitter @ETHNews_ to receive the latest FOAM, map or other Ethereum dapps news.