๐ŸŒพ How Grain Works

What is Grain?

Grain is a community-specific digital currency that is issued on the basis of Cred scores. If cred answers the question "who provided value?", Grain answers "how should we reward people given the value they provided?"

What is the value of Grain?

Every community will use Grain differently. In our community, Grain is currently redeemable for USDC, a stable coin that is worth 1 US Dollar. Communities without funds might treat this as a share of future income. Another might treat it as weight behind a community member's vote. The use cases we offer are a product of our limited imagination, and the space of design is endless, so don't let us limit your creativity.

Note that Grain does not have to be tied to any actual monetary reward. A project using SourceCred can name it โ€œPointsโ€ and use it solely as a scoring system in addition to Cred values.

Communities do not have to distribute Grain at all, allowing them to wait for a use case to present itself in the future.

Projects can choose to issue their Grain as a cryptocurrency or token, such as by issuing Grain as an ERC-20 token on Ethereum. This allows Grain to be a conduit with which a project can pay or financially reward participants.

What can I do with Grain?

Ultimately, Grain is foundational infrastructure for building economics and governance mechanisms. The space of possibility is endless, but here's a few ideas:

  • Pay contributors based on their cred scores.
  • Build apps that use Grain scores as certificates. For instance, anyone who stakes some amount of Grain score gets edit permissions on Google Docs.

Grain Distribution Policies

Grain distribution is a two-step process in which the Cred is recomputed (so scores are as fresh as possible), and Grain is then distributed based on those Cred scores.

SourceCred currently has two policies for how a project distributes Grain:

  • IMMEDIATE splits Grain evenly based on how much Cred each participant earned in the last week. (This policy ignores all Cred from previous weeks, and is intended to give fast rewards to active participants).
  • BALANCED splits Grain based both on lifetime Cred and on lifetime Grain earnings. Balanced tries to ensure that everyone in the project receives a total Grain payment which is consistent with their total Cred score. For example, suppose that a contributor used to have a low Cred score, and as such received a small amount of Grain. However, the community recently changed its weights, or added a new plugin, such that the contributor now has a larger amount of Cred. The balanced policy sees that this contributor is underpaid, so it will pay them extra to "catch them up" to others in the project. Conversely, contributors might be "overpaid" and they'll receive less Grain until the payouts have been equalized.
  • RECENT splits Grain based on recent Cred using an exponential decay to prioritize more recent cred. The recentWeeklyDecayRate parameter determines to what degree you want to focus on recent contributions. If recentWeeklyDecayRate is set to 0.5 (i.e. 50% discount), as in the above example, the policy will count 100% of the Cred generated in the last week, 50% of the Cred generated in the week before, 25% from the week before that, 12.5% from the week before that, and so on.

Choosing a Distribution Policy

A project can use a mixture of policies: e.g., "each week, distribute 10,000 grain according to an immediate policy and 15,000 grain according to a balanced policy."

โ€œWhat if I contributed a lot before a small Grain distribution, and then less before a bigger Grain distribution?โ€

Cred is computed retroactively, and incorporates all your contributions. The balanced policy also considers all Grain that has been issued to the community. So, large Grain distributions with an immediate policy will not give you much reward for old contributions, but large distributions with a balanced policy will.

How much is Grain worth?

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. They can also choose for Grain to have no monetary value, and instead only use it within their community, such as for governance or prioritization.

Grain is project-specific, not universal. Every project that uses SourceCred creates its own independent Grain token and calls it whatever their community chooses.

In the SourceCred community, Grain stays at a fixed price of \$1 per Grain.

Other key properties of Grain

Grain is transferable and tradeable

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

Grain is opt-in

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