Product Revenue Tokens by Index Coop
Welcome to the world of PRTs, a better way to vet consumer interest in company products through participant based buy-in. PRTs are “product revenue tokens”, the name itself tells you everything you need to know so thats the end of this explainer. Just kidding. In any space where consumer facing products are launched there is always the underlying decider on whether or not people actually want the product or the company itself is potentially in the process of launching somethings nobody actually wants. Typically before launching new products to a company's consumer base, there is an immense amount of diligence that must be done in order to ensure it will be successful. This occurs through surveys or an immense amount of market research to gauge whether or not time & resources should be allocated towards launching the product. This can be an issue because speed is critical when looking to capitalize on a perceived hole in the market or wanting to be the first to market. PRTs solve this through creating a presale mechanism but one that rewards its presalers, unlike most presale or launchpad mechanisms.
The use of PRTs means you're not only on the way to being an early adopter & benefitting from the product in its most nascent stages but you can also benefit from the product in the long-term as well. You get to put your money where your mouth is & help bring to market a product you support while as a result receiving one of the most coveted gifts a company can offer to its users: revenue share. Products are put through an uncapped presale process with a capital threshold & time based deadline in order gauge market demand. When the minimum is met, displaying there is clearly buy-in from consumers, the product is launched. The amount of tokens deposited are then rebalanced into the starting liquidity & users are distributed PRTs that are weighted equivalent to their presale deposit(s) & rewards based on time of entry. If the minimum is not met then participants are returned their deposited funds.
Remember, PRT is a “ Product Revenue Token “, not “ Please Retweet This “, so you should probably retweet this to prevent any confusion. Like what I did there? ?? Check out the ELI5 ?? here ->
In this regard, PRTs are all about revenue share! You helped validate the need for a product & stood by that commitment ( unless you're a paper hand pirate ), why not get paid for it? Previously, product revenue was sent to the ICT ( Index Coop Treasury ) which is typical of a web3 company or DAO. In reference to other projects, funds are usually kept in the treasury & used for; future incentive programs, launches, or in the case of a DAO, whatever they vote on. PRTs by Index Coop changes that by making ANYONE ( with the exception of those classified as restricted persons ) capable of getting a piece of the revenue share pie. There will be a fixed amount of PRTs created for each product launch, which means the amount of PRTs you hold for each specific product will equate to the amount of revenue you receive. For instance, if “ Example Index Coop “ is launching & there is a fixed supply of 5,000 PRTs available, presale participants are allocated a proportional amount of PRTs that are weighted by their presale allocation & time of entry. If you receive 5% of the total PRT supply for this product, 250 PRT , then you'll receive 5% of all revenue generated by it.
PRTs are experimental & currently the first presale is being launched, which will be a defining moment for this new product launch mechanism. The catalyst to making this successful is ensuring the system cannot be manipulated. This is why there are currently requirements that must be met in order to receive your PRT.
hyETH, a high-yield Ethereum index that tracks the performance of the largest high-yield opportunities for ETH on the Ethereum mainnet, is in its pre-sale phase which will be leveraging this form of product launch. Each deposit mints a hyETH token which then becomes part of the collective liquidity for the successful launch of the product, in this case it'll be rebalanced as part of the high yield ETH strategy.
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As mentioned by Index Coop:
Presale depositors earn PRTs based on the amount and time deposited. For example, a deposit of 10 wstETH on Day 1 of the presale will earn more PRTs than on Day 15.
source:
There are no set prices for PRTs! Think of a PRT as a tally mark for how much revenue you should earn. I like to think of them as “Proof of Presale” tokens. The more tally marks you accrue, the more it totals up to the overall amount of revenue share you'd receive. But as mentioned earlier, your PRT must be staked in order to receive your revenue share.
An example from the Index Coop team:
Another note is that the revenue will be distributed proportionally amongst staked PRTs. For example, if a user holds 500 PRTs but only 5,000 PRTs are currently staked (instead of a 100% staking participation rate), then the user will earn 10% of the fees instead of 5%.
You can also withdraw your funds at any time during the presale, but as mentioned above, you will forfeit your PRT rewards. You can also partially withdraw your funds but will not receive PRT rewards in equivalence to your partial withdrawal. See more here:
To summarize, PRTs are the testing ground for launching new products while incentivizing early adopters. Tokens are distributed to presale investors upon participating in the presale & maintaining their buy-in through an accumulated 90 day period. The earlier you invest in a PRT positive product, the more rewards you accrue. If a product does not launch, you receive your deposited funds. All in all it sounds like a low -risk high-reward opportunity but this is up to the discretion of the investor & perceived success of the product itself which will ultimately vary. We may ultimately see more companies seeking to test the waters on the interest in a product like this before launch while also dangling such an incentive in front of their eyes.