Important Changes to Brave Rewards

Today we are detailing changes to Brave Rewards that will land in Brave version 1.48.x, which is scheduled to be released early February 2023. Developers and early adopters who use our Nightly and Beta versions, meant for testing and development, can currently get a preview of these changes. 

Since the inception of Brave Rewards, more than 1,000 advertisers have run over 5,900 Brave Ads campaigns, and millions of Brave Rewards users have earned BAT for their attention to those ads. Our transparency page shows the BAT we purchase from the open market to distribute to Brave Rewards users for those ads where we are paid in fiat or other crypto currencies. Brave Rewards users have also contributed more than 36 million BAT to their favorite registered content creators, helping to support a better, more private Web. 

These changes to Brave Rewards will help us combat abuse so that we can better deliver on our promises to legitimate users and creators. They will also allow us to focus our efforts on building a more decentralized future by eliminating our current centralized “virtual BAT” system.

What’s changing for Users?

To begin earning and accruing BAT for Brave Ads, you will need to connect a custodial account to your Brave Rewards profile with upcoming version 1.48. Brave currently works with three custodial account provider partners: Gemini, Uphold, and bitFlyer in Japan. Requiring a custodial account gives us a place to send you your BAT earnings, and allows us to eliminate our centralized “virtual BAT” system (see “Sunsetting virtual BAT” below for more).

If you’d just like to support creators as part of a more private Web, you can do so without ever connecting a custodial account by opting into Brave Rewards and using the new “creator support only” experience. A share of the ad revenue will be earmarked for creators and distributed by Brave as part of the monthly payout to verified creators. If you want to give more, connecting a custodial account will allow you to use BAT you’ve purchased elsewhere to support creators in the Brave Rewards ecosystem, and will also unlock the Tips feature.

The new “creator support only” Rewards experience without a connected custodial account

What it looks like when you start to connect a custodial account 

Sunsetting virtual BAT

After these changes to Brave Rewards in 1.48.x, we will also be sunsetting our centralized “virtual BAT” (“vBAT”) system, used primarily for unverified users.

What is vBAT?

When you use Brave Rewards without a custodial account connected, the earnings you accrue are in something called “vBAT” (virtual BAT). vBAT isn’t BAT on the blockchain; instead, it’s a centralized point system backed by a Chaumian blind signature “ecash” scheme. These points can be contributed to creators or redeemed for BAT if and when you connect a custodial account. 

For example, let’s say you are an unverified user and have “5 BAT” in your Brave Rewards balance after claiming your Brave Ads earnings. That “5 BAT” is actually vBAT, stored as cryptographically signed certificates on your device. When you “verify” your Brave Rewards profile by connecting a custodial account, your device submits those 5 vBAT certificates to our servers. From there, our servers utilize the APIs of our licensed custodial partners to deposit 5 BAT into your custodial account.  

When is vBAT going away?

At the earliest, vBAT will go away sometime in April 2023. However, we want to ensure users have time to adjust to this change, so we will share more exact dates soon. With 1.48.x, existing users without a custodial account connected will receive a final vBAT payout for any February earnings in March.

Once the sunset deadline for vBAT is reached, vBAT will no longer be considered valid, and will be removed from the Brave Rewards experience. This means that even if you’re on an old version of Brave that still shows a vBAT balance, that vBAT can no longer be redeemed after the deadline. 

As the vBAT sunset deadline draws nearer, unverified/non-connected users will see messages with more information and a specific date:

vBAT deadline messaging for users without a connected custodial account

Users in unsupported regions

Although our goal is to maximize the number of supported countries for connecting a custodial account to Brave Rewards before sunsetting vBAT, the unfortunate reality is that there will still be some countries without an available custodial option. For example, Germany is currently not serviced by any of our custodial partners, and will likely not become supported before the vBAT sunset deadline. In other cases, some serviced regions are impossible for us or our custodial partners to support due to unsustainable economics. You can find a list of these unserviced or unsupported countries here.

If you’re in an unsupported country, you will still have the option to contribute your vBAT balances to verified creators you’d like to support, and will see messages like this:

vBAT deadline messaging for users in regions with no available custodial option

We understand that this may be frustrating for users in unsupported regions, and we apologize for these circumstances. We will continue to work with both existing and potential new custodial partners to maximize regional support for Brave Rewards as feasible. 

Why is vBAT being removed?

First, vBAT was never intended to serve as a long-term store of BAT. A core assumption in our early Brave Ads abuse modeling was that vBAT would expire in order to prevent bad actors from accumulating funds across a large number of profiles, then simply waiting for an illicit avenue to open up to drain these funds out of the system. Although vBAT was originally planned to have a rolling expiry, we instead delayed it as long as possible to minimize the impact on users. 

Second, because vBAT is stored locally on users’ devices after it is issued, it is impossible to tell whether some vBAT has been lost to a discarded device, abandoned upon Brave uninstall, or lost due to profile deletion, undermining the possibility of transparent and accurate accounting within the platform. 

Now, with the removal of the legacy unverified user state and the introduction of the new “creator support only” experience, vBAT is no longer necessary. Removing the centralized vBAT system will allow us to focus our efforts on building a more transparent and decentralized future for Brave Rewards.

Decentralization after vBAT

We’ve already shared details about our research on decentralizing the Brave Ads system in Brave Rewards through initiatives like THEMIS. Eliminating our centralized vBAT system represents another step in this direction. For example, in place of vBAT contributions accounted for in our centralized vBAT system, users will, in the future, be able to send on-chain BAT directly from their self-custody Brave Wallet (or other Web3 wallets, such as MetaMask) to creators’ Web3 addresses, including Ethereum, Solana, and others. We’d also like to allow users to purchase products—such as Brave Firewall + VPN, Brave Talk Premium, etc.—with on-chain BAT. 

In a similar vein, many users have asked whether—instead of having to connect a custodial account—it will be possible to connect Brave Wallet directly to Brave Rewards, and receive BAT payouts directly to one’s Brave Wallet addresses. This is a future we’d welcome and are continuing to explore. However, in order to comply with current financial regulations (such as FinCEN and OFAC requirements, or equivalent regulators outside the United States), payouts at this time must first go through a regulated custodian. 

Note that once you receive BAT into your custodial account, you can always withdraw it on-chain to your Brave Wallet. In the future, we plan to bring Brave Rewards and Brave Wallet closer together to form a more unified user experience. More details to come.

What’s changing for Creators?

If you’re a registered Brave Creator, we will be removing the “balance” indicator in the Brave Creators dashboard. The balance you see in your Creators dashboard mostly keeps track of vBAT that was contributed to you but is still pending to be paid out to your custodial account, so will no longer be needed. 

Updated creators dashboard without vBAT balance indicator

Note that any BAT previously paid out to your custodial account is unrelated to these changes. You will continue to be able to receive monthly Creators payouts and direct tips from users to your connected custodial account, even without the vBAT balance indicator.

Following these changes, we also have plans to redesign the overall Brave Creators experience. Here’s an early design preview of what your Brave Creators dashboard might look like in the future:

Do I need to do anything with my Brave Rewards profile?

Existing verified/connected users

If you already have a custodial account—like an Uphold, Gemini, or bitFlyer account—connected to your Brave Rewards profile, then no action is required. The Brave Rewards experience you know and love will continue as you currently know it.

Existing unverified/non-connected users 

If you don’t yet have a custodial account connected to your Brave Rewards profile and you’re in a country that’s supported by one of our custodial partners for connecting to Brave Rewards, we encourage you to connect one as soon as you can. This will ensure that any vBAT balance you have as an unverified user will be transferred to your custodial account as BAT.  

Important: All unverified users will eventually be transitioned over to the new “creator support only” Rewards experience once virtual BAT has been sunsetted. Any remaining vBAT balance you have as an unverified user will be lost when this transition occurs. So, we recommend you connect a custodial account or contribute your vBAT to your favorite verified creators before this happens.

Rewards experience for unverified users before being transitioned to the new “creator support only” experience

Note that if you’re an unverified/non-connected user, your “Estimated earnings” counter will be blank once you upgrade to a version of Brave that includes these changes, as unverified users will no longer be accruing vBAT for themselves, and instead helping to support creators if Brave Ads is enabled. Again, this is because you will only begin to earn once you’ve connected a custodial account to Brave Rewards.

Summary

1. As of browser version 1.48.x (slated for February 2023), users who want to earn BAT from Brave Ads and accrue a balance must first connect a custodial account (Uphold or Gemini; and bitFlyer in Japan) to their Brave Rewards profile.

2. Brave Rewards users without a connected custodial account can still support creators by viewing Brave Ads—they just can’t accrue BAT for themselves until they connect a custodial account. (This is the new “creator support only” experience.)

3. Sometime after 1.48.x, virtual BAT (“vBAT”) is going away. Unverified users will have time to connect a custodial account to redeem their vBAT or send that balance to their favorite verified creators before vBAT is eliminated. After the vBAT sunset deadline, any remaining unverified users will be transitioned over to the new “creator support only” experience. (Existing users with Brave Ads disabled will continue to have Brave Ads disabled when transitioned over to the new experience.)

4. At the earliest, vBAT will go away sometime in April 2023, but the exact date is TBD.

5. Although we will do our best to maximize the number of supported countries before the vBAT sunset deadline, some countries will unfortunately have no available custodial option. Users in unsupported regions will have time to contribute their existing vBAT balances to their favorite verified creators, and then will be able to continue using Rewards to support verified creators with the new “creator support only” experience.

If you have any questions about these upcoming changes, please join us on the official Brave Community forums.