Centralized app stores have a number of major issues however:

users have no privacy . Payment in most app stores is done via a centralized credit card system, meaning every transaction users make is attached to their identity (credit card number, name, address, date of birth, ..). As such, the entity managing the marketplace knows everything users do on their platform, including on products other developers created.

. Payment in most app stores is done via a centralized credit card system, meaning every transaction users make is attached to their identity (credit card number, name, address, date of birth, ..). As such, the entity managing the marketplace knows everything users do on their platform, including on products other developers created. developers pay enormous fees . Mobile app stores charge up to 30% transaction fee on every purchase made in their marketplace. This forces developers to either make their apps more expensive, or take a cut on their margin. This effectively prevents many developers, in particular independent ones, to make a living off of their work, while incentivizing apps to be free and instead monetize through ads or by exploiting personal data.

. Mobile app stores charge up to 30% transaction fee on every purchase made in their marketplace. This forces developers to either make their apps more expensive, or take a cut on their margin. This effectively prevents many developers, in particular independent ones, to make a living off of their work, while incentivizing apps to be free and instead monetize through ads or by exploiting personal data. developers have limited freedom on what they can build. App stores that let anyone publish an app often end up full of bad quality apps and malware. As a result, some of the biggest companies have put in place strict rules on who can create what and how, effectively creating censorship around content.

App stores that let anyone publish an app often end up full of bad quality apps and malware. As a result, some of the biggest companies have put in place strict rules on who can create what and how, effectively creating censorship around content. developers get kicked out arbitrarily. Terms & conditions of most app stores are such that the company running them can arbitrarily kick anyone out, without reason. Stories of developers losing their income and shutting down their companies as a result of unfair practices are so common that there is a word for it: to be “Sherlocked”.

Terms & conditions of most app stores are such that the company running them can arbitrarily kick anyone out, without reason. Stories of developers losing their income and shutting down their companies as a result of unfair practices are so common that there is a word for it: to be “Sherlocked”. developers are being intermediated. Most voice assistants restrict developers from monetizing their apps, while also not sharing data on how users interact with their app. They pretend to be platforms on top of which developers can build, when in fact they are data aggregators, capturing all the value and commoditizing developers.

Most voice assistants restrict developers from monetizing their apps, while also not sharing data on how users interact with their app. They pretend to be platforms on top of which developers can build, when in fact they are data aggregators, capturing all the value and commoditizing developers. rankings are opaque and gamed . Ranking algorithms are rarely published and often gamed. The best products are not always the most highly ranked, creating a missed opportunity for users to discover great apps.

. Ranking algorithms are rarely published and often gamed. The best products are not always the most highly ranked, creating a missed opportunity for users to discover great apps. reviews are often unreliable. Reviews often display unnatural distribution with either 5 stars or 1 star. This is due to a combination of developers paying for fake reviews, as well as users impulsively rating negatively an app when they simply did not understand it. This makes using reviews ineffective when ranking apps, as well as untrustworthy for users.

All these issues are effectively due to misaligned incentives. The financial value and decision power is heavily concentrated in a few major players, in particular the company operating the marketplace. True platforms, on the other hand, facilitate the relationship between the people offering a service and those seeking it, without trying to capture and control everything.

Introducing the Token-Curated App Store

In designing the Snips app store, we followed two key principles: having no central authority and distributing most of the value created to the community. This is why using a token makes so much sense: it is a way to create a self-governed community that is incentivized to curate the app store and make it better.

One of the main design tool for creating such decentralized communities is called “staking”. In a nutshell, a participant in the economy wanting to access a feature must lock tokens, which can then be used as collateral in case they misbehave. Staking can be seen as a mix of behavioral economics and gamification, and simultaneously promoting good behavior in self-organized communities while also creating value for the token by acting as a velocity sink.

A token-curated app store (shortened as “TCA”) has 3 types of actors involved:

The developers and companies publishing apps on the store, called “Publishers”.

The users of apps, called “Users”.

The users responsible for allowing apps on the store, flagging bad reviews and malware are called “Curators”.

Each user has a different incentive: the developers want to create and monetize apps, users want to do useful things with their assistants without impacting their privacy, and curators want to make sure the quality of the content remains high.

Any user or publisher can become a curator by actively participating in the economy, and having a certain number of tokens staked in the app store. By doing so, those with the most to lose are incentivized to curate the app store to keep it high quality, as it would otherwise be detrimental to the value of the token, and thus by extension to the value of their stakes.

To understand the tokenomics, we need to make some statements regarding the underlying Snips AIR blockchain, which will be explained in detail in a later post.

The Snips token is the native token of the AIR network, which is a DPoS, application-specific blockchain.

Block rewards are shared between block producers and users that staked in the economy. This means staking generates an income akin to an interest rate, which varies based on the type of stake. This is called a “Stake Reward”, and can be modulated in order to drive usage of particular features of the economy.

A reserve of token is kept aside and used to preload the user wallets to ease onboarding. This reserve is fixed and defined as part of the token sale.

Zero-fee, pseudonymous payments

Just as in mobile app stores, publishers in the Snips app store can either make their apps free, or monetize them by charging users an upfront fee, a subscription fee or providing in-app purchases.

To mitigate the side effects of the token volatility and offer price clarity for users, prices are defined in €uros, with publishers able to accept multiple cryptocurrencies and stablecoins, including at least Snips tokens.

Accepting cryptocurrencies enables users to remain pseudonymous, while enabling peer-to-peer, commission fee transactions. The only fee collected is the transaction fee from the network, which, if using the Snips token, will be free. Regardless of the currency being used, this will typically be much less than the 30% currently taken on some app stores.

Onboarding regular users onto a decentralized product is a challenge however. Most people that will purchase a Snips AIR device will likely never have transacted using cryptocurrencies and forcing them to purchase tokens as a first step would create too much friction. To solve this issue, we are both pre-loading wallets with Snips tokens when people purchase an AIR device, as well as enabling seamless purchases via exchanges. The user onboarding flow is as follows:

User signs up on Snips.ai

Their wallet is preloaded with a small amount of Snips tokens, which they can use to participate in the economy immediately, including purchasing apps on the app store.

If they run out of tokens, they can add a credit card to their account, which is then used to purchase tokens on exchanges right at the moment when they are needed. This is optional, and privacy-conscious users who wish to remain anonymous can simply purchase Snips tokens elsewhere and send them to their wallet.

The logic of preloading the wallets is that by testing the product immediately and seeing the value it brings them, users will be more likely to purchase additional tokens and participate further.

Stake to Publish

Traditional app stores have a classical conundrum: either they allow anyone to publish an app and end up polluted with low quality apps and malware, or they whitelist apps and act as a central censorship authority. Fortunately, both these issues can be solved using a token and staking mecanisms, leveraging the community as curators of the marketplace.

Here is the flow for publishing an app:

A publisher submits an app to the store by staking tokens. The amount of tokens staked will determine the position of the app in the “New Apps” list, featuring apps that were published in the past 7 days. The stake reward associated to publishing an app will be low, since publishers should not look to drive significant income from it.

If the publisher removes its stake, the app is unlisted from the store. This effectively incentivizes publishers not to let dead apps on the store, and instead move their stake to a new, better app. Furthermore, publishers need to wait at least 3 days to get back their stake after unpublishing their app, preventing “flash publishing” attacks.

Once an app is published, users can flag them as being malware/low quality, which then sends Curators a notification to review. Curators who wish to review the app must then stake and do a round of voting to decide on the outcome of the review, which can be “do nothing”, “unpublish and return stake”, “unpublish and confiscate X% of the stake”, or “unpublish and blacklist publisher”. Confiscated stakes are then redistributed amongst curators who staked, incentivizing the community to actively participate in the reviewing process, while disincentivizing publishers to submit bad apps or malware.

To prevent Curators from cheating and penalizing apps just to get their stake, Publishers who got penalized can appeal the decision by staking again. The other publishers, minus the Curators, then vote to either confirm the curators’ decision, in which case the new stake is distributed to challenged curators, or they vote to revert the decision, in which case the curators’ stake is given to the challenged app’s publisher. Although voting publishers don’t directly get rewarded for processing the appeal, they should nonetheless have an incentive do participate and be honest, as having corrupted curators would potentially impact them down the line.

Ranking new apps based on stakes might seem like a pure marketing feature, but it is actually contributing to making the app store cleaner. Indeed, the fact that publishers need to stake high top be visible in the “New App List” means that publishing malware or bad apps would not only be expensive, it would also lead to a potentially large financial loss before it can be damaging to a large number of users. Indeed, the more visible an app, the faster it will be flagged and reviewed by curators, and thus the faster the stake could be confiscated and the app unpublished.

Stake to Review

Virtually every app store lets their users review apps. Indeed, having a “community score” for an app is a great way to determine how popular and good it is. However, user reviews are typically not used as the primary input to rank apps, which is instead often based on download momentum. The reason is not that reviews are ineffective at ranking apps, but rather that they are often unreliable, with publishers paying for fake reviews, and users mostly reviewing when they are unhappy.

To address this, the Snips app store leverages staking and stake rewards to incentivize users to write honest reviews:

A user downloads and install an app from the app store

The user writes a review, specifying if it is good or bad, then stakes tokens to publish it. Users are incentivized to stake via stake rewards, meaning they get paid by the network for as long as they keep their stake. The stake reward will initially be fairly high to drive users to review actively.

The ranking of the app is determined by taking the sum of the log of the stakes, with negative reviews being subtracted, and positive reviews being added, yielding the following formula: rank = ∑(log(positive stakes)) -∑(log(negative review stake)). Taking the sum of the log of the stakes instead of the log of the sum of stakes is an efficient way to ensure that rankings are more impacted by many users staking a little, rather than few staking a lot.

To prevent users to placing fake reviews just to receive stake rewards, curators can challenge the reviews just like they challenge apps, and penalize the user accordingly.

There is always a risk that token-rich publishers will try to cheat by creating many fake user account. However, we believe that the risk-reward ratio of doing so won’t be good, as they would need to stake a lot to have an impact on their ranking, which would consequently expose them to a large potential financial loss.

Stake to Promote

Discovery is one of the other big issues with app stores. Indeed, despite having sometimes millions of apps, few of them capture most of the downloads, following a form of power distribution. This is partly due to ranking algorithms that are often opaque and momentum biased, therefore favoring apps that are already popular. This makes it hard for new apps to be discovered, and consequently for them to earn a living.

To address this issue, the Snips app store will natively include multiple discovery mechanisms, some of which are purely popularity driven, while others are marketing driven:

A “Reviewed Apps” list that ranks apps based on how user reviews. This is the default list shown to users.

A “New Apps” list featuring apps published in the past 7 days.

A “Trending Apps” list, ranked by how much download momentum apps have. This is similar to how most app stores rank their apps currently.

A “Featured Apps” list, where apps are ranked based on the total stake the publisher has in them. Publishers can add stakes to their apps over time, adding on top of their initial stake and effectively acting as a paid placement. Bad apps and malware would have no incentive to stake here, as they would immediately be noticed by curators who would then challenge them.

Giving publishers multiple ways to get discovered is an important part of our app store, as it gives publishers multiple chances at being discovered by users.

Overall, we have seen that using a token is an elegant solution to the Bad Quality vs Authority dilemma: the community is incentivized to behave honestly and keep the store clean, avoiding the need for a central authority that would decide who can build what for Snips.

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