Part 3 — Talent Tokens
gm friends 👋,
In the third part of our explainer series about our Private Beta, you will learn about Talent Tokens. Talent Tokens will be an integral part of the protocol and we’ll cover:
- What are Talent Tokens?
- Why are Talent Tokens revolutionary?
- How do Talent Tokens work in Season One?
What are Talent Tokens?
The most easy-to-grasp analogy is that Talent Tokens are like shares in someone’s career, where both talent and their supporters get paid dividends over time. Every talent has their own branded token ($JOHN). A Talent Token is tied to a person’s career potential and the benefits holders get from it. With Talent Tokens, a talent can reward supporters that want to join on their journey of growth. Any user can stake TAL on a talent to mint Talent Tokens.
Technically, Talent Tokens are the ERC-20 tokens on the Celo blockchain. We are building on Celo and explain our rationale for that here. Currently, Talent Tokens can only be minted with cUSD. Once TAL goes live, Talent Tokens will only be available in exchange for TAL.
Why are Talent Tokens revolutionary?
Talent Tokens bring deeper financial and emotional alignment to the relationship between talent and supporter and both benefit from rewards distributed by the network. Just like early believers in companies are rewarded, Talent Protocol makes the same possible for talented individuals.
Talent Tokens have the potential to create social, emotional and financial incentives to discover and support talent early, while rewarding all players accordingly. Both parties benefit from rewards distributed by the network and have an incentive to cooperate to increase a talent’s valuation. Since the tokenomics are designed to reward long-term investments, an increase in value can only be achieved by an underlying increase in the fundamentals, i.e., the talent’s professional life. The more a talent’s token rises in value, the more rewards will be worth.
Talent Tokens are not an efficient way to fundraise large amounts of capital quickly. The greatest benefit of using Talent Protocol is helping you build a community of supporters publicly committed to your growth.
How do Talent Tokens work in Season 1?
In Season 1, Talent Tokens follow a simplified dynamic since TAL is not live yet. The protocol is built to incentivize long-term investments into long-term relationships with strong network effects. For that reason, it is not possible to withdraw one’s backing of a talent in the first season and Talent Tokens can only be purchased with Celo stablecoin. To compensate for the added risk taken by early believers, the network is paying generous staking rewards that can be reinvested into backed talent.
In future seasons, users can purchase Talent Tokens via TAL and earn staking rewards. The envisioned mechanism is described in detail in our tokenomics.
Read Part 4: Perks