As a frequent user of the service, I think it is a good idea. It would encourage serious users, and I imagine it would be better financially for Mahalo, which also benefits the service and the community.

I do think you may run into trouble gaining additional users though. If they weren't sure how long they were going to stay around, they may balk at the 50% level to begin with and decide against joining. So you may be making a trade-off. My assumption is you will gain more high level users, but would not grow the entire user base as much.
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It is a great idea.

I suggest this scale:
4th Degree or better: 0%
3rd Degree 2%
2nd Degree 5%
1st Degree 10%
Brown Belt 15%
Purple Belt 20%
Green Belt 40%
lower than Green: 50%
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I am definitely okay with this, if I understand your scale, with me as I am now at purple belt, I would be at the same 25% as the default so I don't lose anything, however, if I was a green or lower and saw my cashout rate go from 25% to 50% I might be a bit discouraged. Maybe 35% is the way to go rather than 50%

I think I might even be more likely to hang on to my M$ until I reach a higher belt level to cash out at a better rate.
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I think I suggested something similar to this a LONG time back. I think it's a great idea.
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I think it is a good idea. Not only does it provide an additional, costless incentive for gaining points (other than a belt color), but it simultaneously adds another layer of control against fraud by fly-by-night users.

It takes very little effort to get to purple belt for someone that is genuinely interested in the site, IMHO. I don't think it is punishment at all for the lower levels. I mean, I watched @thekid start from a white belt and overcome my points IN A WEEK (and I've been here since the beginning).

Good idea.
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I definitely like the idea...but I do have some obligations! I would much prefer to see it like underneath. Your suggestion, I feel, may make some users feel it will take forever to get 4th Degree so it will be ages before you are awarded a 0% cashing scheme.

Black Belt: 0%
Brown Belt 15%
Purple Belt 25%
Green or lower: 50%

Is it necessary? If it will be difficult for Mahalo to set up - I strongly advise you do not go with it if it will take a lot of effort. Instead, try and improve the grammar of questions and improve the speed of Mahalo Answers.

However, I do like the idea - it will help make people more determined to get the next belt level!
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First, as a green belt, I can say that my initial reaction would be discouragement at seeing my potential for cashing out going from 25% to 50%.

At the same time, I can understand the motivation to encourage site loyalty and quality of participation. However, isn't receiving tips already a method of encouraging quality participation? If a user has not been around long enough to reach a high belt level, but still has a strong “best answer” percentage, isn’t this user still making useful contributions?

Also, a tiered system could emphasize points over quality responses. Which is a better member, one who reaches a purple belt (or higher) with a fairly low percentage of best answers or one who reaches a cashout level of tips with a high best answer percentage but not necessarily a high belt level? Under a tiered system, the motivation is more biased towards acquiring points (as opposed to quality responses) than it was under a flat-rate system.
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Sounds great... Seems like some people are resisting by coming up with different gradations. It's going to be interesting to find the balance between motivation and not being motivated.
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My question is, what is broken about the current system?

• Is Mahalo concerned about long-term financial ramifications? If so, then you do what you have to do to make the business model work.
• Does Mahalo believe that higher belt levels provide better answers? If this is the case, what evidence do you have?
• Do you want to reward your most loyal users? I can see that argument, but I'm not sure you would be encouraging the behaviors you are looking for.
  

Here are the issues as I see them:

• I think the arbitrary delineation will influence more people to do
  things just for the points to get their percentage. It looks like the largest point-earning category is answering questions, so you would have more useless answers, especially within the first hour.
  
• I don't see why a belt level should change the value of a Mahalo Dollar. If I answered the questions correctly, why should my belt level matter? If you think that the question I answered was silly, then knock down the value of Mahalo-funded questions and be happy for whatever tips users wish to pay me.

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I think it's a good idea. Answerers are going to have to provide quality answers to have anything to cash out in the first place, and it's possible to move at least to green very quickly (if I remember right I did it in just a couple of weeks).

I think it also encourages good behavior here. Here, we get two things: the belt levels (which are simply by points up to Brown) and cash (for Best Answers). You get more points with good answers; you get points for voting on Best Answers (see Unanswered Questions tab); by voting you see what kinds of answers get Best Answer. Belt levels have had some tweaking, so maybe it's a good idea to tweak this as well.
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I think this could be counter-productive, at least with the scale that you've set out. When you are starting out green seems far away, and purple seems almost impossible. Even as a purple myself, more than half-way to brown, brown still seems far away, and I don't know if I'll ever make it to black.

The net effect:

a) The better rates at higher levels aren't much of an incentive, as you have no idea if or when you'll ever get there. In any case 20% vs 25% for example is not a compelling difference.

b) The reduced payout at a lower level (green and below) will reduce the attraction of Mahalo to users in their first few months. That's, when they would be getting into the Mahalo habit, or deciding it's not worth the effort.

Also, on the simple math... to cash out you need at least M$40. How many people at the lower levels ever get there anyway?

Bottom line is that I for one would not have been motivated by that scale when I was starting out, and I wouldn't be motivated by it now.

Possibly I'd be demotivated if I saw people getting paid more for writing worse answers just because they'd been around longer.
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ROCK ON

This would be WICKED AWESOME

Any chance that Blackbelts and above might be able to have the href nofollow removed in at least the profiles?

It would be advantageous to a few of us :)
It would also motivate folks who know the value in this to get up there and break through the levels.

http://img208.imageshack.us/img208/9598/thiskidisawesome.jpg
I now believe the kid in this picture may be a young Jason Calacanis.
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Count me as a skeptic on this. But the amount of money is so tiny I'm not terribly concerned. It would be a lot bigger improvement if you added more colors.
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My solution is this: discount based on cash out total, not points. So 25% for $40, but maybe 24% for $50 and 20% for $100. It's simple, straight forward, and doesn't introduce any new problems. And of course it encourages more quality participation.

But let's disect your proposal.

1) Purple (2,000 points) is way too high for the first breakpoint. 2,000 points is about 285 answers assuming 50% are best answers. This is a n00b tax and it's on the steep end of the spectrum. Protip: this is bad for growth.

2) The objective is to encourage heavier participation? You're describing an incentive curve with a lot of flat areas (that is, gaps in the incentive), which I don't think will prove effective. If the incentive were instead continuous such that every point helped, what you'd get is more participation from every user interested in cashing out at some point.

3) Assuming the scale is an effective incentive to get more points, it would also be an effective incentive for undesirable participation. It would be a recipe for spurious votes, bad/redundant answers, and possibly gaming for points. The alternative scale that I mentioned above could make this problem considerably worse.

4) On the upshot, Mahalo saves some coin, existing 2,000+ point members are more likely to stay, and a certain type of gaming becomes much less appealing.
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I'm loving this idea, but i think there should still be some small reward for those who have fought tooth and nail to get to purple or even green belt.
It doesn't have to be much but like i have said before even 1% could be the tipping point to encourage people that have worked hard and discourage bad outfits from chewing up mahalo's resources and time.

-

It might also help if you introduced a system where people could trade their M$'s for points, now THAT is a great idea.

This would give people a chance to really put their money where their mouth is when it comes to BACKING their answers.
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While I am very new to this site I would not have a problem with this. My understanding is you can't cash out until M$40.00. I dont know exactly how long it takes on average to achieve this but Im sure it isn't normally done very often before reaching the higher belts anyway.
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I think that its a good idea, but you should modify it with the following changes:

4th Degree or better: 1% (Mahalo should still get something)

Then everything else is fine except for the bottom end:
Green Belt: 30%
Yellow Belt: 40%
White Belt: 100% (It is highly unlikely that a white belt would get M$40 anyway and all it takes to become a yellow belt is to install the widget on a website/blog)

You should really be careful not to discourage new users. I think that 50% is really steep.
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This sliding scale is an excellent idea. It will encourage those who are new (like myself) to work harder to earn points. This will get them involved in the community more quickly. I like the the divisions the way they are, I know this will make me go all out for purple. Also, if the money just stays in the account, then nothing is lost in waiting to reach purple or higher before cashing out.
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