DENT token distribution and main company wallet releases
Table of Contents
- 1 Cold wallets and other exchanges
DENT Token distribution
We all probably know that there are 100 Billion Dent tokens (Maximum Supply), where 87.5 Billion are into circulation, and the remaining 12.5 Billion is kept in the main company wallet (aka “war chest”).
But let’s us dive just a little bit deeper and analyze who owns what…
|Main Company Wallet||12.5|
|DENT Exchange Wallet||0.9|
|“DW DENT app Wallets”||22.0|
|Other External Wallets||24.2|
|Total DENT Tokens||100.0|
Source: ETHplorer (as per January 2, 2021)
Or to recap the distribution (Billions of DENT tokens) even further:
|Main Company Wallet (War Chest)||12.5|
|DENT App and Exchange Wallets||22.9|
|Wallets External Exchanges (Binance, KuCoin, etc.)||40.4|
|Total # DENT Tokens||100.0|
Top 10 DENT Token Holders
Of course, the exchange balances do consist of the total of all the DENT belonging to their users (traders/investors).
However, the DENT Exchange Wallets (and the labeled DW Wallets) consist not only the DENTs belonging to traders/investors, but all DENTs belonging to:
- DENT App Users (including deposited DENT in AB Vault).
- DENT Exchange Users (including deposited DENT in AB Vault).
- DENT Wireless.
Note: the DW Wallets (total 22 billion DENTs) were funded directly from the DENT Exchange wallet (hence DENT Wireless itself) in the period December 17, 2018 up to May 10, 2019. And the number is more or less constant thereafter.
These wallets all have smart contracts with multi-signature and daily withdrawal limitation (hence “cold”, i.e. secured wallets). Although, we are not 100% sure as it has not been confirmed by the team, we think that the tokens still belong to DENT Wireless as other DENT token holders probably don’t use smart contracts.
So, we can only “speculate” about the ownership (and their purposes).
However, our best guess for a possible explanation is that these wallets do still belong to DENT Wireless and are kept as additional wallet(s) for DENT Exchange and DENT App users. (If this is true, this means that the DENT kept by DENT App and Exchange users is actually 22.9 billion)
This explanation makes sense as Mikko Linnamäki, DENT Wireless Co Founder, has mentioned in a telegram chat (dated May 19, 2019) that over 20 Billion DENT tokens were kept by DENT App users inside their Apps.
Although, it is still possible that these DW wallets are reservations for future expenses as for example management bonuses, marketing campaigns (Olympics, or Retail sponsoring), or free DENT incentives (referral marketing).
Another possible explanation is that (some of) these wallets belong to members of the management team (already paid out bonuses). Or to (new) investors who bought the DENT directly from DENT Wireless.
But also taking into account the time these transfers took place, when the marketing team did “spend” billions of DENT tokens to acquire new DENT app users via referral marketing, we bet these DW wallets consist of DENT tokens on behalf of DENT App and Exchange users (assigned to individual users via smart contracts).
As these DW wallets contain 22.9 Billion DENT, we can speak about a substantial amount. For DENT token holders, it’s rather annoying that we don’t know for 100% sure to whom these wallets belong and for what purposes.
So far the sum-up of the current DENT token distribution and explanation behind the owners and purposes of the wallets.
What can we conclude?
Of course, the dominance of Binance over other exchanges, and fact that a rather high percentage is kept on Binance. All DENT kept on Binance (25.5B) is higher than all DENT kept in all other external wallet counted together (24.2B).
Is this a good or a bad sign?
In general, most people would say “the more tokens are kept inside cold wallets, and the less kept on exchanges the better”. As the first group contains often long term investors, and the second group, people who want to sell or trade on the exchange.
Also, due to Binance’s dominance, if something changes or happens on Binance, it can have a significant effect on the DENT token price.
For example, on September 30, 2019, Binance de-listed the DENT/BTC pair that resulted in a sharp 30%+ decline in DENT token price on that day, with no reversal the next months.
Another example occurred June-July 2019 when Binance announced that U.S. customers were blocked from trading on Binance.com, and had to leave the platform. Billions of DENT tokens were sold by American investors who really had no alternative as some of them were “whales” and other exchanges could not (and still can’t) give the required liquidity for big volume transactions. Unfortunately, this was the end of a nice upward trend for the DENT token…
But to just look at the current distribution is not sufficient. At least we want to see the developments over time.
Below an integrated chart that shows the DENT token price together with all DENT kept on exchange wallets (excluding the DENT Exchange wallet).
As you can clearly see, in the first half year of 2019, the amounts of DENT kept on exchanges increases fast and sharply from 8 billion to 44 billion. In line with the fast release of DENT tokens out of the main company wallet (see below), due to “aggressive” referral marketing campaign in that period.
It’s also interesting to see that the DENT token price also started to rise sharply end of April 2019. So, once and for all. Everyone who says that a fast release of new tokens will lead to a price decline, here is the evidence that a sharp price increase can occur together with a huge release of new tokens!
The sharp decline in price end of Juny 2019 was caused by 3 factors:
- The block of U.S. Customers on Binance.com that resulted in mass sales of the DENT token by Americans (see above).
- The cooling down of the somewhat too high expectations about the delivery of the Afterburner Program for DENT App users (delayed from Q1 2019 and expected to be implemented in Q2 2019). Plus some other roadmap items for Q2 2019 were not achieved.
- After reaching the originally planned release of 70 billion of DENT tokens (as per whitepaper), the community expected that DENT Wireless would stop with further token releases. But the releases did continue, however, at a much slower rate, but still disappointing many token holders.
And usually, if a sharp increase could not hold, it will lead let to a sharp decline as often happens with spikes.
In the chart above, it looks like this decline in price (since Mid June 2019) correlates with the (more gradually) decrease in DENT tokens hold on exchange.
But where did these tokens taken from the exchanges did end up?
In other cold wallets, to kept safely by investors for better times?
Partly, but most of the new released tokens and the tokens taken from exchanges (in this period) ended up in the DENT Wallets (the wallets to cover all the DENT credits belonging to the DENT App users).
Cold wallets and other exchanges
Many investors look at the movements between cold wallets and exchanges with the idea that DENTs on exchanges are there to be sold or traded, and DENTs in cold wallets to store for a longer time.
Well, for DENT there is an exception, the UpBit Wallet…
What about the Upbit Wallet?
This wallet increased significantly in the last quarter of 2020. Did the transaction volume on this exchange suddenly increase?
No, there is a big whale who accumulated DENTs on Binance and transferred the tokens to his wallet on UpBit.
Not for the purpose to sell but he probably trusts UpBit that much that he takes the risk to keep his DENTs there instead of in cold wallets…
Another fact that the DENT price didn’t decrease harder in Q4 2020 due to the relatively high number of DENTs sold by the team (see below), is that a huge “new” whale managed to acquire 1.5 billion DENT tokens.
Unfortunately, we don’t know what his (or her) motives are, but be in mind that this whale and the “UpBit guy” can make or break the price due to their holdings.
The reason I mention these 2 facts is that if you’ll look at the top 10 only, you won’t see everything. For example, the 1.5B whale uses 6 wallets of 150M and a wallet with 500M DENTs. So, whales can hide their balances over several cold wallets or keep DENTs on exchanges.
DENT Token releases out of main company wallet (aka “war chest”)
First phase: the ICO (Initial Coin Offer) and start-up phase (July 2017- December 2018)
As you can read in the Whitepaper, from the maximum issued 100 Billion DENT tokens, the company tried to sell 70% in the ICO token sale (pre sale + public token) that ended July 27, 2017.
However, only about 10.7% was sold with a total collection of 21,467 ETH. (Note: the ETH/USD rate on July 27, 2017 was about $200. Hence, the total token ICO sales value was about $4.3 million)
So, the team had to start with just a small part of the originally planned $28 million as token sale “revenue”, but nevertheless they start with implementing the roadmap.
It took just a little over a year before 6.8 billion additional tokens were released, primarily for future development of the DENT apps and DENT exchange.
Second phase: rapid user acquisition via referral marketing (January 2019-July 2019)
After the launch of DENT Exchange (on December 31, 2018) in the first 5 months of 2019, the marketing team wanted to increase the user base as fast as possible via an “aggressive” referral marketing system where both referrer and the new App (registered and verified) user got free DENT. Of course, funded by the main company wallet (aka war chest).
In the graph below you’ll see the correlation between the registered users growth and the growth in DENT token releases.
During these first half year in 2019, the user base grow from 7 million to 18 million users.
To give you an idea about the average DENT token price during this phase…
If you look at the weekly chart, we can conclude that the average DENT token price (blue line) was about $0.0009. Hence, the release of 59.3 billion tokens (growth from 10.7 billion tokens up to 70 billion) was sold by DW into the market for about $53 million in total.
Third phase: slower release of tokens (July 2019- October 2020)
After the 70B mark was reached (end May 2019), the aggressive acquisition of new users came to an end, as the marketing team should “finance” itself more from operating income (mainly as result of increased mobile data and prepaid top-up sales and from offer wall income).
Also, the team made a strategic decision to become an MVNO and to focus on the eSIM launch.
These 2 facts explain the slowdown of the new user growth in phase 3.
The monthly release of DENT tokens out of the main company since July 2019 is between 600-800 million on average. These releases were used for 2 main reasons:
- To pay the core team of about 16 “workers” each month. These workers all get paid out in the DENT token (and can be followed by analyzing this wallet).
- Further acquisition of new users via referral marketing, and other business expenses to grow the ecosystem.
Hence, in line with the in the Whitepaper described objectives as “telco acquisition and market seeding, user incentives, salaries, and bonuses”.
As this post is about token distribution, new token releases, and the possible effects on the DENT token price, let’s have a look at the monthly pay-outs to the workers…
Do you think they have an effect on the DENT token price?
Most of you will say” “Yes, the new released tokens do increase the supply and hence the price of the DENT token will decrease”.
Well, look at the price chart and especially at the blue circles for the last year.
Do you see any price effect?
(Note: the sharp decline on March 12, 2020 was due to an overall down spike in the market due to COVID-19 fear, that same day BTC took a nosedive of more than 50%)
Well, I definitely don’t see a negative price effect, in contrarian, it’s a slightly positive effect as the DENT token price tends to increase after the token release at month-end (usually paid out between 27th-30th day of the month).
So, for me no reason to believe that the release of the remaining war chest of 12.5 billion DENT tokens will lead to a price decrease as long as it will happen gradually.
And for those of you who think that DENT Wireless should wait with releases out of the war chest until the DENT token price is higher as this way the company could get a higher revenue…
I like the fact that the team is using the war chest every time they need “money” to grow the business and improve the DENT ecosystem without looking at the DENT token price. As the alternative, waiting with releases until the DENT token price is relatively high is not in the interest of the DENT token holders, as it will “kill any upward trend” in the token price.
So, maybe, we should even hope that the team will release the DENT tokens as fast as in the first 5 months of 2019, as we saw a huge spike in new users and DENT token price during that period…
Probably because token investors recognize and like fast growth, and are eager to invest in tokens of fast-growing companies with real growth, real users, real income, with a successful business model and ecosystem…
Fourth phase: acceleration of token releases (October 2020- until now)
Since the end of October 2020, the team suddenly increased the number of tokens taken out from the war chest. In October, 1.3 billion tokens were released, and in November almost 2.0 billion. Followed by an average amount of 600 million in December.
However, in December the team also took out about 1.9 billion tokens from the DW Wallets (the total of these wallets decreased from 24.8 billion to 22.9 billion). Also, the team transferred a significant amount of ETH from the company wallet.
So far, we don’t have any idea or a good explanation why the team had to take out these higher amounts in comparison to the prior months.
As the the team “used” 5 billion DENT tokens in the last 2 months, and if the team will continue at that speed, we can expect the war chest to be empty in the first half-year of 2021.
When is the DENT ecosystem ready? If the war chest is empty?
Let’s first go back to the ICO (Inititial Coin Offering) in July 2017…
DENT Wireless “created” 100 billion DENT tokens. (This number is the maximum, no new tokens can’t and won’t be created ever)
To build the underlying DENT ecosystem, the management team expected they would need $40 million. Hence, the ICO price for 1 DENT was set at $0.0004 ($40 million divided by 100 billion tokens).
Side note: the team could also choose for any other pair of numbers as long as the total amount (of the number of created tokens multiplied with the ICO sales price) was equal to $40 million.
The team decided to choose a relatively large amount of 100 billion (in comparison to ICO’s of other tokens) as the team expected (hundreds of) millions of people to use the DENT utility tokens.
Also, it’s easier to calculate and show prices in full DENT than in decimals. I mean what do you prefer, if the price for 10 MB mobile data is for example $0.0028, a price of 7 DENT, or a price of 0.0007 DENT?
So, that’s the only reason there are 100 billion DENT tokens. Some people who don’t know the history, may say “100 billion tokens is too much, and there are to many kept in the war chest, it’s the reason for the low price of the token”.
Well, now you can explain to them that it really doesn’t matter whether the original created number of new DENT tokens would be 100, 1000, a million, or 100 billion, the total Market Cap (of all tokens) would always be $40 million as “set” at ICO.
During the ICO, the team wanted to sell 70% of the 100 billion tokens for a price of $0.004 per DENT.
Hence, to acquire $28 million as ICO revenue and to keep 30% (valued at $12 million) as war chest for later business development.
As described above, during the ICO only 10.7% was sold, but the original plan stayed the same… build the DENT ecosystem with the “money” received from the sale of all 100 billion DENT tokens.
So, to say it in other words…
Token holders “agreed” with the management team of DENT Wireless that they would build the DENT ecosystem in accordance to the whitepaper with the expectation that it would cost $40 million to build the “full” ecosystem.
With the DENT ecosystem I mean:
Develop the DENT Apps, build the DENT Exchange, attract new users, attract providers, create new products, create the marketplace, ensure DENT token listings, or to say it in other words… execute the roadmap.
(Besides the ecosystem, the management team also had to set up and expand their own DENT Wireless Ltd company as these 2 are of course interrelated)
But in July 2017, nobody could foresee the future in such a detail that he could describe the “whole”, or “completed” DENT ecosystem.
And still today, nobody can…
So, as long as there are DENT tokens in the war chest… the team can (and should) use them to expand the DENT ecosystem.
It makes no sense for DENT token holders that DENT Wireless will just “stop” somewhere with the building of the ecosystem and keep the DENT tokens in the war chest…
(Or worse… to sell them on the market, and pay the receipts out in the form of dividends to the shareholders of DENT Wireless Ltd)
No, the only “fair” way if the team decides to stop using the war chest, is to burn the left DENT tokens (as they are not needed anymore).
In Telegram groups, I often read words like this…
“It’s now almost 3 years since the ICO, hence DENT Wireless should be profitable nowadays. If they even didn’t become profitable and still need the war chest after 3 years (for paying out workers), it’s a badly managed company, and why would you invest as token holder anyway in such a token?”
Well, of course, as long as the team is using the war chest for expanding the DENT ecosystem the right way, the ecosystem becomes more “valuable”.
And that’s what we as token holders want… as in theory, the DENT token price will increase in value if the ecosystem becomes more valuable.
As described above the current “release number” of DENT tokens taken out of the war chest each month is between 600-800 million DENT.
These releases are an extra “investment” in the ecosystem each month.
And as token holders, we only have to ask ourselves:
Is the team spending these tokens wisely and for expanding the DENT ecosystem as they are being supposed to do?
We as Fans trust the management, and do see the ecosystem grow each month.
How will the DENT ecosystem look like as the war chest is empty?
We don’t know, but I’m sure it’s bigger and more advanced than nowadays with more products, users, participants, and transaction volume.
And only at that moment, when the war chest is empty, DENT Wireless as a company has to be “profitable” such that they can “stay alive” and invest the profits in expanding their business and the DENT ecosystem even further.
And even in case DENT Wireless is not profitable (at the moment that the war chest will be empty), or the company need extra capital to expand, I’m sure there are many “actors” who want to either lend money or to invest in the share capital of DENT Wireless.
So, to summarize, there is no need to “worry” about 1) how many tokens are still in the war chest, 2) when the war chest will be empty, and 3) whether or not DENT Wireless is nowadays profitable…
We (as DENT token holders) only have to look at the progress of the ecosystem and whether DENT Wireless’ Management Team is spending the DENT tokens wisely and in accordance to the original plans (as in the whitepaper and roadmap), and if all additional developments and investments (in product, ecosystem, marketing, user base expansion, etc.) are in the interests of DENT token holders.
Unfortunately, with the recent acceleration of DENT tokens taken out of the war chest, without knowing the underlying reasons, it’s rather difficult for (potential) token investors to conclude whether or not the tokens are spend wisely…