With Facebook cutting news from its platform for Australians and most Americans having lost trust in media, the search for reliable information has sent many down the halls of Reddit, YouTube and other social media platforms.
Credibility is hard to find. But one Los Angeles-based startup is providing what it argues are objective rankings of information distributors. Built on Ethereum, Ideamarket launched this week and lets users put their money behind social media accounts they deem important.
In essence, it’s a manifestation of the generally amorphous “marketplace of ideas.”
“Ideamarket is an entirely new income stream for creators, without dependence on ads or paywalls,” said founder Mike Elias. “Our goal is to liberate journalism from paywalls by giving [journalists and creators] an income stream dependent only on the trust they earn from their audience. This rewards journalists for publishing their best work for free, without paywalls.”
It’s not just journalists, though. Some of the top-ranking accounts on the site include Elon Musk comfortably at #1 for Twitter accounts, with Soulja Boy coming in at #8. In between those two, at #5, is the @potus account of President Joe Biden.
Thus far, Ideamarket has attracted over $1 million in deposits to the site.
How Ideamarket works
Ideamarket functions somewhat similarly to Reddit, in which people can upvote various media brands, journalists and, really, any post that they think has online credibility. But instead of having no cost, like an upvote, Ideamarket lets users buy tokens (think of it like stock) in a social media account they deem valuable and reputable.
As described in a previous article, upvotes “cost money and increase in cost as vote count increases, meaning that people have to put their money where their mouth, or itchy retweeting trigger finger, is.”
So, say you wanted to add Twitter account @johndoe to Ideamarket and buy tokens in that account. First you would have to go to the site and click on the button to “Add Listing.” You could then add that account.
Ideamarket encourages people, when listing an account, to buy tokens in it when they do. This is because the first 1,000 tokens for each listing cost $0.10 each but then automatically increase by $0.01 after every 100 tokens bought henceforth. These increases are managed by a bonding curve algorithm.
To buy or sell a token, you click on the trade button.
You then choose to pay with crypto or a credit card. For a credit card, there would be instructions to create a Portis crypto wallet. Then, use the dropdown menu to choose what currency to pay in. If you’re paying with a credit card, DAI is recommended. You then enter the amount you want to purchase and click buy. So after adding @johndoe, for example, you could pay $1 for ten tokens of @johndoe.
According to a document overview of the site, “money spent on tokens is held in Compound.Finance, a decentralized lending protocol. Compound lends these deposits to borrowers, who pay interest (usually 1%-10% annually).”
All interest generated by token deposits is paid to the owner of the associated social media account, and anyone can add an account to the platform.
Essentially, you buy tokens in accounts you think are “attention-worthy” or have a reputation you’d like to support. You can later sell these tokens down the line if you choose. You can also lock your tokens for a certain amount of time, signaling long-term confidence in the account and that you won’t just sell as soon as other people purchase. As the price of the token rises you can sell at a profit if you choose, and the account earns interest which can be collected by its owner.
It’s not just the content creators who get paid; platforms get a new income stream as well.
For each transaction, there is a 1% fee, half of which goes to the platform and half of which goes to Ideamarket.
Currently, the platforms listed on Ideamarket are Twitter and Substack. Twitter currently has accrued over $6,000 that it has yet to claim, while Substack has not yet breached $75 at the time of writing.
New developments since the beta
There are two big differences from the beta of Ideamarket that was launched in November 2019. Originally, said Elias, it was going to rank web domains, like http://wsj.com and http://cnn.com “Now, we’re ranking social media accounts, like @balajis and @joerogan,” he said.
All interest generated by deposits on tokens gets paid to the account owners.
“We see ourselves as ‘Chainlink for public narratives.’ We’re not dependent on any particular social media platform,” said Elias. “Instead, we’re available for any public square that develops to plug into.”
According to Elias, Ideamarket’s main goal is to relieve social media platforms of the “impossible task of making epistemic judgments on behalf of the public.” He said Ideamarket is a protocol for risk-backed content moderation, and that by measuring credibility in dollars, “fake news” becomes permanently and increasingly more expensive.
“Now, in addition to creating a newsy-looking website, they have to buy a market rank similar to the trusted publications they’re trying to imitate,” he said.
While Ideamarket is listing social media accounts on various platforms, news organizations’ accounts like those of the New York Times or Fox News could also be added if users decided to do so.
Like any existing market, Elias concedes, there’s no way to explicitly prevent private interests from artificially boosting a listing and in theory their online credibility. For example, I could list myself and then pay to boost my own ranking.
“However, parties that buy a high rank are paying out of pocket for something trusted voices crowdsource ‘for free,’” said Elias. “They’re also competing against the buying power of entire populations. Ideamarket is a new income stream for trusted voices, and a constantly growing expense for propagandists.”
Gas fees a hurdle
Like all things Ethereum right now, high gas fees are the biggest challenge Ideamarket is facing. Given the Ethereum-wide demand, gas fees are often over $100 per transaction.
Ideamarket CTO Alexander Schlindwein is now working on a plan, which originally came from Ideamarket investor Felix Hartmann. If it works, Schlindwein’s plan will reduce gas fees for buys denominated in DAI by about 40%.
“We’re also entertaining creative solutions, such as decentralized index funds from Enzyme Finance,” said Elias. “This would allow influencers to create Ideamarket indexes and crowdsource funds from small investors, who would then gain exposure to multiple Ideamarket tokens while only sending one transaction (to buy into the index fund).”
The staying power for the platform will depend upon, yes, gas fees, as well as overall interest and buy-in, to ensure the rankings can’t be swayed by a small group of individuals, for example. But it’s one more tool for consumers to navigate the fractured and insular online world of information, and for content providers to make some money along the way.