In-depth use cases for funding pools

Different ways of using funding pools

Use Cases for Award Funding

Recurring Bonuses

Cumulative Awards

Create a funded unit that represents the bonus and distribute it based on the actions or behaviors you want to encourage. Set a recurring payout schedule and let the units accumulate over time.

For instance, you can create 'Medallions' that are awarded based on specific actions like positive ratings or generating revenue. For every good action, users earn medallions, and these accumulate over time. Determine the total funding amount for the payout pool and the frequency of payouts. The user's payout is then calculated based on the number of medallions they hold and the total funding amount.

Example: An e-commerce marketplace can reward sellers with 'Seller Points' for every sale made, review received, or new product listing. These points accumulate over time, increasing a seller's share of the monthly 'Seller Bonus Pool'. This rewards active sellers and encourages consistent platform engagement.

Non-Cumulative Awards

Instead of allowing the funded units to accumulate, set an expiration period equal to the payout frequency. This encourages consistent activity, as users must earn new units each period to claim a share of the payout pool.

For example, you could set a monthly expiration for the 'Medallions'. Users must then continue to earn Medallions each month to claim their share of the 'Monthly Performance Pool'.

Example: A food delivery platform could set 'Delivery Stars' to expire monthly. To earn a share of the 'Monthly Performance Pool', delivery partners need to consistently meet quality standards and complete deliveries, ensuring regular engagement and high service standards.

One-Time Bonuses

Set a one-time payout instead of a recurring one. Once the bonus pool is paid out, the funded units are 'burned' or removed.

Example: An online tutoring marketplace might set up a 'Year-End Bonus Pool' for tutors who have consistently received top ratings. Each 5-star rating earns a tutor a 'Tutor Star', and at the end of the year, the bonus pool is distributed among tutors based on the Tutor Stars they've collected.

Segment-Based Bonuses

Pro-rata payments

To reward users based on their individual contributions, distribute funded units for actions they complete. When it comes time for payout, their share is proportionate to the total number of units they hold.

Example: A work platform could award 'Task Points' for each job completed. At the end of each quarter, the 'Quarterly Task Pool' is distributed among users who are in the 'Top Tasker' segment, based on the number of Task Points they hold. This rewards those who complete more jobs and motivates others to increase their activity.

Equal payments

If you want all users of a specific group to receive the same bonus amount, distribute one funded unit to each user who meets your criteria or associate a funded pool with a status or badge award.

Example: If a ride-hailing service wanted to reward its top 5% of drivers with a bonus, it could distribute one 'Top Driver Unit' to each driver in this segment. Each of these drivers would then receive an equal share of the 'Top Driver Bonus Pool', providing a clear incentive for drivers to achieve top performance.

Sales-Based Bonuses

This use case ties payouts to the sales or transaction volume on the platform.

Revenue Share

If you want to share revenue with your users, you can set up a funded award that corresponds to a portion of the platform's revenue.

Example: a delivery platform sets up a 'Delivery Revenue Share Pool', to which it contributes a percentage of every delivery fee. 'Delivery Medallions' could then be distributed based on actions like the number of deliveries made, positive ratings, or availability during peak hours. Users' payouts are then determined by the number of 'Delivery Medallions' they've earned and the total size of the pool.

Creator Revenue Funds

For platforms where content creation is central, tying creator earnings to the total platform revenue can be an effective strategy.

Example: A music streaming platform sets up a 'Music Royalty Pool', with each stream contributing a fraction of a cent to the pool. Artists would earn 'Stream Points' for each stream of their music, earning a share of the Music Royalty Pool based on the number of Stream Points they've earned.