๐ŸŒพ How Grain Works

๐ŸŒพ What is Grain?

Grain is a token of value created by SourceCred. It can be used:
1) to pay contributors
2) to Boost contributions

Let's go over each of these in depth.

๐Ÿ’ฐ Paying Contributors

How do I get Grain?

Grain is created during "harvests." In a harvest, a project Mints new Grain and distributes it to contributors based on their Cred scores. Your Cred score determines the percentage of Grain you recieve out of the total amount allocated to the community. Grain can be allocated to a community as often or as seldom as that community wishes. Furthermore, each Grain distribution can vary in amount. How the Grain is harvested and distributed is up to the project. For example, a project could Mint a fixed amount of Grain every week and distribute it to contributors based on their recent contributions, or it could have a target "Grain-per-Cred" payout ratio, and harvest to ensure that all contributors receive at least that amount.

"What if I contributed a lot before a small Grain payout, and then less before a bigger Grain payout?"

Since Cred is retroactive, the SourceCred algorithm will make sure your percentage is based on _all_ of your contributions compared to all existing contributions, and make sure your percentage is based on the total amount of Grain that has been issued to the community. _Ever._

You can also get Grain by becoming a sponsor. Buying Grain sponsors contributors directly (by paying them for their Grain). Thus, anyone holding Grain has supported the project, either directly through contributions, or indirectly through financial sponsorship. When someone wants to sell their Grain for dollars (or some other currency), the money either comes from sponsors buying their Grain, or a pool their community has previously set up.

How much is Grain worth?

In the SourceCred community, Grain stays at a fixed price of $1 per Grain. However, each community can choose the price of their Grain, as well as a name for their specific kind of Grain. In other words, Grain is project-specific, and is not a universal token. Every project that uses SourceCred creates its own independent token and calls it whatever they choose. Grain in the SourceCred community is called "SourceGrain."

As for pricing, each community can choose the price of their own Grain. They can choose a fixed price, or choose to make their Grain a floating financial asset and let the market decide the price; their Grain would then fluctuate in price based on supply and demand.

โฌ†๏ธ Boosting Contributions

Grain can also be used to Boost contributions. This means, you can spend your Grain to support a particular contribution. When a contribution is Boosted, its Cred increases because new Cred has just been Minted. It then also flows a fraction of its Cred to its Booster.

Boosting is a flexible mechanism. A Booster can use it to prioritize work and incentivize contributors to focus on it. For example, if there's a bug that you really want fixed, you can Boost it. Since it has a higher Cred score from the newly Minted Cred, contributors will now be more interested in focusing on it, as they will receive more Cred from their work.

Boosters can also hunt for under-valued contributions and Boost them. They are incentivized to do so, because if the contribution is later seen as important, they will receive a bunch of Cred as its Booster. In doing so, they help to ensure that everyone's contributions are being fairly valued.

A concept guide on Boosting will be coming soon.

๐Ÿ”‘ Other key properties of Grain

Grain is transferrable and tradeable.

Holders of Grain can freely send it to others, or exchange it. Within a project, Grain is fungible. If Grain has been put on a blockchain (e.g. as an ERC20 token), then it can be swapped or traded via protocols like Uniswap or 0x, just like any other ERC20.

Grain is opt-in

Since Grain can have financial value, receiving Grain might create legal/tax complications for contributors. As such, Grain is opt-in; only contributors that have explicitly opted in will be eligible to receive any Grain. (This is in contrast to Cred, which is not an asset, and which all contributors receive automatically.)