A startup wants to use the concept of a governance token to reform freelance talent boards and align incentives between the platform and its users.
A new startup wants to change the way freelance talent and respective clients find each other through a community-run platform. To accomplish this, the project will feature its own governance token.
The core premise of the platform, known as Braintrust, is to remove middlemen from the process of hiring highly skilled talent for contract and freelance work — primarily in the IT industry.
But unlike the many iterations of this concept born in the initial coin offering era, Braintrust will not force users into a proprietary token for payments. Instead, it borrows some concepts from DeFi governance, and especially Compound, to create a community-run platform.
Cointelegraph interviewed its CEO, Adam Jackson, to learn more about the platform.
Jackson believes that existing freelancer aggregation platforms, like Upwork and Fiverr, suffer from fundamentally misaligned incentives between the owners of the platform and its users:
“Their job is to connect buyer and seller, company and talent, and then facilitate the transaction. And then take as large a fee as possible as a percentage of that transaction.”
The fees incurred by freelancers are usually about 20% of the total billed amount. This is the norm for any “two-sided market” born on the internet, with eBay pioneering that model.
Normally, these firms can get away with large fees due to the value they add by creating a trusted environment and providing escrow services. But that aspect can be recreated by a peer-to-peer vetting system, Jackson explained. Users will be incentivized to validate new clients and freelancers as additions to the community.
The system is not a decentralized autonomous organization though, and a non-profit foundation will take care of some aspects of the system, like accepting money. “But that’s just one of many companies or people or entities that are helping build this thing,” Jackson added.
Braintrust is also not completely feeless, as the foundation will collect 10% of each transaction from clients. But the exact rates are subject to change by community governance.
Compound-inspired governance model
Payments on Braintrust will be conducted through traditional fiat USD, though crypto-based payment will also be supported.
The Braintrust token, or BTRUST, only has governance functionality. Its holders are able to vote on key aspects of the platform: what kind of clients and talent to accept, what features to develop, how much the platform should charge.
Jackson hopes that the new model will promote a vibrant talent network that will be actively interested in improving the ecosystem.
“This new model I’m describing actually isn’t possible without a token. The token, [and] the blockchain facilitates replacing the middleman.”
Jackson revealed that Robert Leshner, the founder and CEO of Compound, is an advisor and investor in the project. Furthermore, Braintrust is reusing a fork of Compound’s governance code to power its own systems.
The platform’s users will earn the token by contributing to it, for example by evaluating new candidates. Unlike some DeFi protocols though, it appears that the platform’s revenue will not be distributed to token holders. Jackson did not wish to go into detail about the token economics, though he promised that it will be explained as Braintrust approaches launch at the end of the year.
Braintrust’s concept represents an interesting use of crypto-native systems to solve real world problems. However, it remains to be seen if it proves to be more successful than previous attempts.