Polkadot, Kusama and its parachains have an onboarding and inclusion issue. We propose to approach these issues through a new faucet on the Encointer (common-good) parachain.
Token issuers or donors can transfer a stash of their tokens to the Encointer parachain through XCM. There, they can create/fill up a faucet and whitelist encointer communities. Members of whitelisted Encointer communities with recent proof-of-personhood can then drip the faucet exactly once per cycle
This concept has been presented at Polkadot Now India [video]
Onboarding and Inclusivity
The Encointer faucet offers an alternative way for onboarding and spreading your token to verified humans
- no need to pass KYC
- no need for a bank account or a credit card
- no need to have any funds at all to get your first few tokens
Caveat: The number of Encointer communities is still small and they can only grow organically, these faucets will only be practically accessible for very few people in the beginning. But the important thing is the vision: Encointer offers a way towards true inclusivity
Promoting your token
Members of Encointer communities use a mobile app which could be used to promote new faucets (and their tokens) on a marketplace. This marketplace mainly targets intra-community exchange and trade as well as promoting local acceptance points of the community currency (a bit like ebay - but decentralized and local) and is expected to become very popular - which makes it attractive for promotion of faucets or other extra-community offerings.
DotSama teams can reach an audience which would be otherwise inaccessible to them. Experience with the first community Leu shows that Encointer attracts mostly people who are not yet active in or even aware of web3.
Why not complement a launchpad pre-sale with a faucet? While this is not a way to raise funding, it is a way to spread your token to a wide audience
Parachains with a native utility token could boost the adoption of their platform by offering their utility token long term for “fair use” - a bit like a “free plan” for very basic use which is enough to explore and evaluate but not enough for serious usage.
Also, Dapp teams may chose to subsidize gas for their Dapp to simplify onboarding. However, there is no way for Encointer to enforce that the gas/utility token can only be used for a specific Dapp. Combined with the promotianal aspect, this may still be an attractive option for Dapps
An NGO could use such faucets to transfer humanitarian aid in stablecoins directly to personhood-verified individuals from selected communities (usually selected by geographic region). A very plausible NGO to use this would be GiveDirectly. However, we think that there may be an even better option than faucets for such an NGO in the future: By using a DEX, the impact of aid funding volume could by multiplied by backing local community currencies
Faucet vs. Airdrop
We suggest to call this service a faucet, not an airdrop tool. The reasoning is that a faucet requires the beneficiary to take action while an airdrop is passive (One can not prevent to be targeted by an airdrop, with a faucet one can). Still, creating an Encointer faucet will feel like an airdrop for members of whitelisted Encointer communities.
Encointer provides physical-presence-based proof of personhood: How it works
Faucets are an additional incentive to launch Encointer communities and participate. This means it can also incentivise launching bot communities (which would be otherwise worthless as the newly created local currency would have no value in a bot community). That’s why we need to establish a web of trust among Encointer communities to decide who can use the faucet. As a preliminary measure, we shall use whitelisting per faucet. The faucet creator can select Encointer communities which are eligible to use the faucet
We are seeking community feedback about this new service. How would you use it? What are your requirements?