Civil’s Relaunch Will Include Can’t-Fail Second Token Sale in Early 2019

The mission of Civil’s inaugural token sale last September and August was grand—“to power independent journalism throughout the world” and to do that with “a global community of people who care about journalism,” in the words of Civil co-founder and CEO Matthew Iles.

But the sale was an abject failure. “We took a black eye,” said a chastened Iles in a Zigzag post-mortem podcast. “We need to come out and demonstrate that Civil is something that people can continually use and will work.”

In this Q&A, Iles, Vivian Schiller, CEO of the Civil Foundation, and Matt Coolidge, co-founder and head of marketing at Civil, detail how their decentralized and community-owned journalism network can be a realistic answer to the “duopoly” of the giant Google and Facebook search and social platforms.

Part of their focus is a new and what they call much improved token sale set for early February. They spell out the details here:  

How will Civil produce a better deal for the network of newsrooms it is creating?

Iles: We are creating a new platform built on a few but powerful principles. The idea is we want all members of the Civil ecosystem to own their data. We want all creators to own their content and we want all members who are participating in this project to own the network itself.

We’re announcing is a plan that is “purpose-built” for journalism. The first thing we have to do is define what kind of content is appropriate and not appropriate for Civil, which we broadly lay out in the Civil Constitution.

The next important challenge is we need the community to run the network. We need the community to decide who is a good actor and who is not. We need the community to be in charge of how the network evolves over time.

How to you propose to do this?

Iles: In early February, we’re launching our Civil Registry. It’s an app that will be the core of our decentralized network of newsrooms, and will be the destination where the community and newsrooms interact (where, for example, you can sponsor/launch/challenge/vote for newsrooms). This means that newsrooms will be able to apply to become Civil newsrooms and the community will govern itself according to our journalistic standards.

These standards reside in the Civil Constitution?

Yes.

You talk about your members being “empowered” to run your network of newsrooms. This isn’t just word play, is it?

Iles: Of course not. This will happen through the sale of tokens that will begin in February. Civil is a community-run project that is based on a token-curated registry model. That means that all the newsrooms in the Registry must consistently meet the standards of the community as spelled out in the Civil Constitution. The community upholds the standards through the use of the tokens.

Iles: The tokens are a blockchain-based software product that gives members a true ownership stake in the community (we often refer to Civil as a “journalism co-op” for this reason), and a direct say in how it evolves over time.

The community can eject a newsroom from the network, right?

Iles: If a newsroom is not abiding by the Civil Constitution, absolutely. The community can penalize or even eject a newsroom.

What would be an example of a newsroom “not abiding by” your Constitution?

Iles: The Civil Constitution outlines nine, high-level journalistic principles by which all newsrooms must abide. These will be the basis of any newsroom challenge, and how we aim to ensure that challenges are rare and serious occurrences “I don’t like your politics!” is not a valid challenge, for instance. You need to prove a given newsroom has committed a gross violation. We’re not trying to reinvent the wheel on journalistic ethics, which is a tried-and-true, ever-evolving field, We’re trying to reinvent the manner by which ethics are incentivized.

Here’s an example of one such principle, which could spur a challenge:

Original Work: Newsrooms must not represent the work of other Journalists or Newsrooms as their own (plagiarism). If a newsroom is found to knowingly plagiarize content, that’s grounds for a challenge.

You’ve said your early-February relaunch will have three components. What are they?

Iles: The first is the Civil Registry, the app where the activities for the community governance will occur.

Second is the Civil Publisher, a tool that lets a newsroom index their data about their articles to the block chain or permanently archive all their work. It can only be used by newsrooms that are in good standing in their community.

Why is it important to index data about articles and archive everything?

Iles: I’d point to this post from Maria Bustillos, editor of Popula, for context. Lots of journalists (notably, the DNAinfo network, which only was able to restore it after massive public outcry) have seen entire archives deleted permanently in recent years. Archiving in a decentralized environment means that no single party can remove your content.

The third component of our relaunch is the token sale. Unlike the first sale, this one won’t have a hard cap or a soft cap for how much we seek to raise or a time limit. Interested members of the public will just buy tokens from civil.co, until we sell out our 34-million allocation of tokens. 100% of net proceeds will go to the nonprofit Civil Foundation.

What will be the price of the tokens?

Iles: In the week leading up to the launch, we’ll announce the opening price of the tokens. We’ll also announce how much funding we intend to generate for the Civil Foundation.

While we’re not disclosing these specifics yet, we are certain that what is generated by the sale will be deployed by the Civil Foundation and other public-service journalism projects around the country.

Could the total money raised meet the $8 million that was the target of your first sale, or possibly even more?

Schiller: We don’t know. We don’t need to have a threshold as we did in the previous token sale. The public will decide how much money is to be raised.

Coolidge: We’re going to sell 34 million  tokens, so it will be an extended process — and certainly, this won’t be the only channel for the Civil Foundation to fundraise. We want to see the Foundation well capitalized from the sale, and for CVL buyers to know that money they spend on tokens will directly go to supporting journalism.

Your first sale was very complicated. How are you addressing that problem for the new sale?

Iles: One of the biggest changes this time is the Learning App. With it, we’re distilling a lot of things that were very intimidating to prospective token buyers. Most of the people considering buying CVL tokens had never participated in such a sale. We’ve spent a lot of time speaking with many of these individuals in recent months, and are working to make buying tokens less painful this time around.

Schiller: In the first sale, we set up a barrier to meet a certain threshold to launch the platform. We encourage people to buy tokens in the new sale, but we are not dependent on that to get started.

Because we care about journalism here at this company, all of us are eager to get the network launched so we can see the benefits of the community and get the Registry started. We’re not giving tokens away, we’re not asking the newsrooms for money – we’re trying to give it to them. This time, we know for sure we can get started.

Are the newsrooms part of Civil or independent?

Coolidge: We’ve given grants to the first 14 newsrooms that have already launched on Civil. But as a decentralized network, newsrooms will remain independently owned and operated and responsible for their own sustainability. We want to help support that via mentorships and grants from the Civil Foundation (and elsewhere) — and the quicker we sell tokens, the more effective we can be there. but we’re not looking to finance new newsrooms, other than covering their application deposit to join the Civil community.

Federal regulatory concerns about the “gray space” of crypto-currencies like tokens and the potential of speculators taking over the sale of tokens was cited as one of the reasons why the first sale failed. What are you doing about this issue for your February sale?

Iles: We have not changed our fundamentals of our approach in the past few months from a regulatory perspective. We have very similar restrictions in place from the last go-round to ensure that participants will be using tokens for intended building a community that will maintain journalistic standards, not for speculation.

Prospective token purchasers will, once again, have to show their passports during the online buying process, correct?

Yes. People may be uncomfortable with that. But for a nonprofit organization to be taking money from people, it’s important that there is a check on who they are.

Can Civil help the news media become strong enough to compete successfully with the Google and Facebook and other search and social platforms?

Schiller: That’s a big question. We think the platforms tend to disintermediate the relations between news organizations and their audiences. On top of that, there is the growing trust issue. These things together put small news organizations in particular at a disadvantage. We believe what we’re doing will help smaller organizations both in terms of their financial sustainability and their trust level.

Your existing newsrooms weren’t adversely affected by the failure of your first token sale, were they?

Schiller. On the contrary. We’ve been working with some of them for more than a year to support them in their work and to help them with their sustainability, and some of them are doing extraordinarily well. Block Club Chicago, for example, has grown their reader base to 6,000 paid subscribers. They’re doing very well.

Matthew, as CEO of Civil, what’s behind your high confidence about Civil’s forthcoming new token sale?

Iles: We listened a lot. We listened to our newsrooms. We to our community. We listened to our partners. We really tried to reflect on all the things we did right in the first sale and what we did wrong, and what would be the best way to move forward on this new project.

I think the efforts and resilience of our team and the community over the short period of time since what was a pretty traumatic experience where we expended a great amount of energy on a sale that didn’t go the way we wanted.

We have turned the ship around. The new plan is solid. We are enthusiastic about doing things in a way that is in line with the organic and true nature of the way this project needs to evolve. In our previous effort, we borrowed too much from other people’s playbooks and that frustrated our path forward.

A new enterprise like this one continues to carry risk and uncertainty. But we have made it stronger and are eager and confident about our ability to succeed.

We’re not confident “just because.” The things we’ve added and adjusted are all a direct result of what we learned.

Tom Grubisich (@TomGrubisich) has written “The New News” column for Street Fight since 2011. He is also working on a book about the history, present, and future of Charleston, S.C.