How to improve DENT tokenomics?
This article is all about the DENT ecosystem and usage of the DENT tokens and credits inside this system. First, I’ll explain the differences and relationship between DENT tokens and credits, and the limitations and consequences by using these 2 different types of “DENTs”.
Thereafter, I’ll look into more detail how DENT tokens and credits are being used, by whom, and for what purposes.
As we’ll see that the DENT usages is very low, I’ll explain the reasons behind and what the management can do to stimulate the increase in DENT usages and improve the tokenomics.
Table of Contents
Differences between DENT Tokens and Credits
What are DENT Tokens?
DENT tokens are the 100 Billion ERC20 tokens created and issued by DENT Wireless in June 2017. These tokens were released via the ICO (Initial Coin Offer) to the initial token investors or transferred out of the main company wallet (war chest) into circulation later.
The DENT tokens can be traded on external crypto exchanges, kept in ERC20 compatible wallets, and can be transferred via the ETH platform.
What are DENT Credits?
DENT Credits are “created” in case of:
- A DENT token deposit from an external wallet into the balance of a DENT App user.
- An in-app purchase of a DENT “dollar bundle” (you know those $3.99 up to $99.99 “Buy DENTs bundles” that you can buy in the DENT app).
- A free “DENT incentive” as a result of a referral or Earn Tab reward.
DENT Credits can’t be withdrawn (as DENT tokens) to external wallets, and the DENT App is not a (ERC20) wallet.
Relationship between DENT tokens and credits
In theory, there is a 1:1 relation between DENT Credits and DENT tokens as in situation 1, the DENT token is being “converted” 1:1 into DENT Credits, and in cases of 2 and 3, DENT Wireless automatically buys the necessary DENT tokens on DENT Exchange (via the DENT/BTC trading pair) the moment a user buys a “DENT $ bundle” or is getting the free (approved) incentive. These DENT tokens are kept in DW’s wallets to cover the DENT App credits.
So, you can say that…
DENT Credits are DENT tokens with the restriction that DENT Credits can only be used inside the “micro” DENT ecosystem (inside the DENT Apps and DENT Exchange), and can’t be taken out of the DENT apps other than by purchasing (and consuming) a “telco product [utility feature]. Where DENT Tokens used outside the DENT Apps and DENT Exchange are used for investing and speculating purposes (as tradeable asset and payment vehicle) [security feature], the “macro” DENT ecosystem.
Besides the fact that this difference is for many people not clear and that often the term DENT is used, which makes it confusing, there are situations that DENT Tokens and DENT Credits interfere with each other. Especially, for users who have both access to DENT Exchange and the DENT App.
Plus, with the (upcoming) new features like data trading in (unused) eSIM data plans, referrals being paid out more and more in (tradeable) data (instead or in addition to DENT credits), data sharing (via TEAMS and via social media), it will become even more complex as, for example, it isn’t clear if free data rewards or unused data can be sold for DENT tokens or credits (and whether these proceeds can be freely withdrawn to external wallets).
So, let’s look at the 2 different cases…
A user with only access to the DENT App (and only DENT Credits)
Well, this is easy as all the DENTs inside the DENT App are in this case by definition DENT Credits.
So, a DENT App user has DENT Credits and can spend these for buying (and trading) mobile data or voice minutes, or locking these into the AB Vault.
These “telco products” can be used personally, can be shared or send to “friends”, or can be traded (unused part). But DENT Credits can’t be withdrawn as DENT tokens to external wallet addresses.
A user with both DENT App and DENT Exchange access
You probably know that to get access to DENT Exchange, you must live in one of the 43 supported countries, and pass the additional KYC/ALM procedures. And that the DENT App and Exchange user accounts are connected to each other (via the same user ID and password.
But if you have DENT Exchange access, you have extra privileges above “DENT App only” users:
- DENT Exchange users can deposit up to 9.990.000 DENTs into the AB Vault (DENT App users up to 2.000.000), and these deposits can later be withdrawn to any external wallet address (after the lockup period).
- DENT Exchange users can trade in certain telco products (SIM data and prepaid packages, Voice bundles, and soon eSIM data plans) with extra trading tools (as full insight in and “limit” order entries in the orderbook).
- DENT Exchange users can withdraw their DENT balances (including their profits) to any external wallet address (while DENT App users must use the (earned) DENT Credits inside the ecosystem).
- [Not possible more anymore] DENT Exchange users could withdraw the free DENT incentives (referral and Earn Tab rewards). Now, DENT Exchange users also must purchase “telco products” with the free earned incentives.
So, until a few months ago, all the DENTs for DENT Exchange users were treated as DENT Tokens, where now DENT Exchange users can have both DENT Tokens and DENT Credits (in case they acted as referrer or earned credits via the Earn Tab).
But unfortunately inside the DENT App or DENT Exchange (in the “Assets” Tab), there is no distinction between DENT Tokens and DENT Credits!
For example, I myself have earned referral and Earn Tab rewards, and deposited (and withdrew) DENT tokens, plus made DENT trading income by trading in data packages and in the DENT/BTC pair, but there is just one single DENT balance.
I have to wait until I have transferred almost all of my DENT tokens from the exchange (or create a sale order with my maximum available DENT) to see what portion I can’t withdraw (or sell) as this leftover portion relates to DENT Credits (the free DENT incentives that I didn’t use for buying “telco products”).
Very frustrating and inconvenient.
So, my first tip for DW’s management…
For DENT Exchange users, make this distinction between freely withdrawable DENT tokens and non-withdrawable DENT credits visible and clear in both the “Assets Tab” (on DENT Exchange), and inside the DENT App in the “Balance” section (as element in the “My Account Tab”).
The reasons behind the differences between DENT tokens and credits
One of of the primary reasons is that the DW wants that free DENT incentives are being used inside the “micro” DENT ecosystem. Hence, that it shouldn’t be possible to immediately withdraw these free DENT Credits (as DENT tokens) to external wallets, as why would DW just give away free money to referrers who only referred a new user?
Of course, they prefer new users (joiner bonus), Earn Tab “earners”, and referrers to use the DENT credits for buying telco products (where the team will also make a margin on these products and hence are cheaper to “give away” as reward than giving DENT tokens).
Also, giving away free DENT tokens stimulates cheating and the creation of “fake” user accounts just to get the “free money”.
Furthermore, this “credit system” makes it possible to “reward” DENT App users who “committed themselves” to purchase DW’s telco products in the future. I mean why would a DENT App user buy DENT credits in the first place?
Of course, the most logical reason, to buy DENT credits (first) instead of directly paying with fiat, should be, that it is cheaper for them.
(In reality it’s now more expensive to buy DENT credits first, but I’ll come back on this later in the article).
Another (technical) reason is that all DENT credits are registered by using a side chain (and using smart contracts). Hence, an “internal” database system making usage of the ETH blockchain (with lower costs as one of the main benefits).
OK, now we know about the differences and reasons behind DENT tokens and credits.
Let’s look at the numbers and actual usages of DENT Tokens and DENT credits…
Tokenomics of DENT Tokens and Credits
Let me first explain what I mean with tokenomics…
Tokenomics is the short term for token economics. And economics can be defined as…
Economics is a social science concerned with the production, distribution, and consumption of goods and services. It studies how individuals, businesses, governments, and nations make choices about how to allocate resources. Economics focuses on the actions of human beings, based on assumptions that humans act with rational behavior, seeking the most optimal level of benefit or utility.
So, with tokenomics, I mean token microeconomics, where I look at the rational behavior by participants in the DENT ecosystem, seeking the most optimal level of benefit or utility of the DENT token and credits.
First, if you haven’t read this article, please read this article first: DENT token: What are the main benefits for DENT Wireless and DENT users by using blockchain and smart contracts?
So, there were many (possible) reasons why DW’s management issued the DENT token. Let’s look now how DENT tokens and credits are being used inside the DENT ecosystem by actual users.
Therefore, I’ll make a distinction between DENT App users who have a device with a traditional “plastic” SIM card and the ones having an eSIM enabled device.
Also because DW treats these 2 groups differently with respect to products and services (own product vs other carrier products), (referral) marketing, focus and attention, and payment methods (DENT required or also fiat and other payment options).
So, let’s first look at the “legacy” of…
DENT App users with SIM
Throughout this website, you can find several articles about the history and current status with respect to the marketplace and products for “SIM” mobile data and prepaid top-ups (for local carriers).
First, it is important to know that the SIM data plans and prepaid packages can only be bought or traded inside the DENT app and on DENT Exchange by paying with “DENTs” (credits inside the App and tokens on the exchange).
To summary the history in short…
DW acquired 25 million DENT App users via an aggressive referral marketing system, where new users and referrers got free DENT credits, and the team spent at least 60 billion DENT tokens (with estimated $50 million value) to acquire these new users.
These users used the DENT credits to buy the mobile data and prepaid packages. But due to lack of supply, lack op cooperation from local carriers, DW’s pricing strategy, and traders who want to make a profit, the prices for these packages are higher (inflated) than a user normally would pay to his own local carrier.
But DENT App users still bought these highly priced packages because they could pay with the free DENT incentives.
Some of them also bought DENT $ credit bundles (in case of too low numbers to buy a package), but most of them just used the free DENT credits.
Also, a small (but focused) number of these users liked the (old) referral system and Offerwall (Earn Tab) to earn additional free DENT credits.
The Earn Tab was “popular” for quite some time, but since the new Offerwall 3.0 with lower rewards, it isn’t used that much anymore.
The same can be said about the referral system where referrers could get DENT credits (up to 6,000 for some countries), but now in all countries, the maximum referral reward is just 100 DENT credits (about 2.5 dollar cents). Not really that exciting anymore.
To give you an idea. The average daily number of incentives is nowadays less than 2 million DENT credits, but there were times that in one single country (Indonesia), users got over over 100 million DENT credits a day as referral bonuses.
So, if you look at the averages and known “big” numbers…
DW managed to get 25 million users for an average cost price of $2 per user (after taken into account that DW managed to sell data and prepaid packages with a profit and got ad income from the Earn tab advertisers).
So, maybe you are wondering how many DENT credits are still kept by DENT App users?
If you’ll read the article DENT token distribution and main company wallet releases, you’ll see that DW “covers” these DENT credits with about 22 billion DENT tokens kept in 6 wallets (of 6B, 5B, 5B, 4B, 1B, 1B).
These DENT credits are more or less “locked” as these DENT App users can only deposit them into the AB Vault or they can buy the inflated data and prepaid packages (or voice bundles). However, most of these users don’t have sufficient DENT credits balances (and don’t want to pay for additional credits).
Hence, these users either forgot about their free DENT credits, or are waiting for better times. For example, until the DENT token price will increase, or traders will lower their prices, or DW will come up with new affordable priced packages.
In theory, there should be a 1:1 relationship between the 22B DENT tokens kept by DW to cover all the DENT credits kept by DENT App users. But, it’s a “black-box” for outsiders as these credits are registered by DW via the side chain, and nobody knows or can control (except DW itself) if this amount is sufficient to cover all (future expected usages of) DENT credits. And DW can sell these DENT tokens at any moment they want.
(Remark: during the aggressive marketing campaign in the period December 2018 – May 2019, DW directly financed these DENT credits from the main company wallet. That said, every day, you can see that DW is buying small DENT amounts on DENT Exchange to “cover” these DENT credits)
So, to end this subject…
What can we expect with respect to these SIM users and the 20B DENT credits?
Well, it’s clear that DW won’t focus anymore on this audience. All efforts go to eSIM users. So, this is a “dying” or “sleeping” audience, with “inactive” users who only can (and maybe will) become active in these cases:
- these users switch to an eSIM enabled device. Of course, DW should do their best to keep them back as a (paying) client (why not give them 200MB for free automatically to try out DENT eSIM?).
- the DENT token prices appreciates in a way that SIM data and prepaid packages become available such that they can be paid with the leftover DENT credits (or after the DENT price increases, it can become interesting to buy some extra credits and pay with a combo of free and paid credits and still get a discount).
- DW will decrease the data and prepaid prices to become (more) competitive.
- DW allows split payments for the SIM products as DW also allows for the eSIM data plans. Split payments are payments where a part is paid with DENT credits and the remaining part with fiat.
- the Earn tab becomes more interesting and will be used again (by more users).
- the referral system becomes more interesting where users are rewarded with more DENT credits.
- some users still have some leftover DENT credits sufficient to buy a data or prepaid packages, but didn’t need it before, and will buy when the need is there.
But overall, without changing the current inflated pricing, marketing and systems (reward and payments), there is no “demand” from this group that will increase the number of DENT (credits) being bought or used.
On the contrary, expect to first gradually see a decrease in the total number of DENT credits kept by DENT App users (as all users with leftover DENT credits will spend more in total than the few users who still obtain new credits via the Earn Tab and referrals), until a lower equilibrium is found.
And for DENT token investors, of course, if these DENT credits are being used by the DENT App users, these users are paying DW (directly inside the app, or indirectly via the marketplace with tradeable packages) with DENT credits. Hence, DW can and will lower the coverage, and will sell them as DENT tokens on the market, resulting in price pressure on the token.
Or to say it in other words, expect this 22 billion DENT credits balance to gradually decrease and being sold on the (DENT token) markets.
So, what about the demand for DENT tokens and credits with respect to…
DENT App users with eSIM enabled devices
Let’s first look at the different payment methods.
Payments with fiat
On April 29, 2020, DENT Wireless allowed DENT App users to pay for their eSIM data plans not just with DENTs only, but with fiat via PayPal and Credit Card (later followed by Google Pay, Apple Pay, and other cryptocurrencies as BAT, BNB, and DAI, and Samsung Galaxy Blockchain integration).
Remark: this “fiat” payment feature can only be used for eSIM data plans and not for SIM data and prepaid packages or for Voice bundles.
To allocate the eSIM data plans to the user (and to keep the DENT token investors community “happy”), for every eSIM data purchase paid with fiat, DW will automatically buy (with BTC) the “required and related” DENT tokens on DENT Exchange (DENT/BTC pair).
So as a net effect, DW is paid out in fiat, purchased and received the DENT, and paid these DENT with BTC. But why should DW keep these DENT tokens?
There is no reason at all. So, DW will sell the DENT tokens again for BTC on DENT Exchange. And the process can start again.
Hence, to summarize, in case that a DENT user will pay with fiat, there will be a high token velocity, and no real effect for the DENT token to appreciate by higher demand or usage.
Payments with DENT tokens or credits
Well, before it’s possible to pay with DENT credits (or tokens), a DENT App user should first own them. How can someone obtain DENTs?
- First buy DENT tokens on an exchange, and deposit them into the DENT App user “balance”, or DENT wallet address on DENT Exchange.
- Via an in-app purchase of a DENT “dollar bundle”.
- Via a free “DENT incentive” as a result of a referral or Earn Tab reward.
So, let’s go into detail and see what steps a user should take before he can purchase a DENT eSIM data plan and pay with DENTs. And let’s assume that this user wants to buy a 1GB data plan (priced $4.99).
And look at the pricing tables that DW is using today (as per October 20, 2020):
|Bundle||# of DENTs||DENT/USD||Markup|
Ad 1. A user first has to buy the necessary DENTs on an exchange.
So, a user needs 22,278 DENTs to buy 1GB. Will this user go to Binance for example, buy these DENT, withdraw them and deposit them into his DENT app balance?
Of course not, if you take into account that this user has to pay for the bid-ask spread on Binance and has to pay 22,222 DENTs as withdrawal fee (to cover the ETH gas prices). By following this route, the user has to pay about double the amount. And as long as withdrawal fees and gas prices are high, we can’t expect that many users will buy DENT on exchanges to use inside the DENT apps for purchasing data plans. Every calculating user will opt for fiat payments.
Ad 2. A user who will first buy a DENT Credits bundle form within the app.
Well, as you can see above in the table that the conversion price for the 1GB, 3GB, and 10GB is the same $0.000224, but for the DENT bundles markups are being used from 9.1% to 21.1%, there is no incentive at all for the user to first buy a DENT credits bundle. On the contrary, a user is being penalized for buying a DENT credits bundle.
Just compare this with other global eSIM providers who give extra credits and higher discounts the more a user pays upfront. For example, RedteaGo gives $150 value in credits if a user pays $100 upfront.
I mean, a buyer of a credits bundle, commits himself for future telco purchases. Hence, DW should reward these “heavy usage” users instead of penalizing them.
Ad 3. Payments with DENT credits obtained via incentives.
Well, as we have seen above, the number of incentives that can be acquired are minimal. A referrer only gets 100 DENT credits, and someone who watches the daily videos in the Earn Tab will get 53 DENT credits on average (3-days cycle of 30-50-80).
So, the current referral program and Earn Tab are not exciting enough to earn free DENT credits. As described above, less than 2 million DENT credits are given out per day to all 25+ million users. Just peanuts.
From a tokenomics point of view, currently there are no incentives for both eSIM and SIM users to first buy and later use DENT tokens or credits, or to try to earn DENT credits via referrals or the Earn Tab.
So, we can conclude that there is currently no demand for DENT as “utility” token to first buy and later pay with DENT tokens or credits for primary (new) telco purchases.
The only logical reason to purchase some DENT tokens or credits is to either deposit them into the Afterburner Vault. Or to buy telco products that can only be acquired by paying with DENTs (and can’t be purchased with fiat) as is the case for:
- SIM data and prepaid packages (tradeable and non-tradeable packages).
- Global Voice bundles (tradeable and non-tradeable bundles).
- [Upcoming] Secondary Marketplace for selling unused eSIM data.
Afterburner Loyalty Program
Only for users who like the free voice minutes, it’s still interesting. There are just a handful of traders left (so the AB trading discount on DENT Exchange is meaningless), the extra referral and daily video watch rewards are not interesting anymore (getting a maximum of 2 dollar cents instead of 1 dollar cent but therefore you have to deposit 10M DENT tokens).
Let alone, that this program is only accessible for Android and DENT Exchange users, and not for iOS users. And people who do not have access to DENT Exchange, can’t withdraw the deposited tokens outside the DENT app and can only be used for new data purchases.
Hopefully, the announced “data benefits” as part of the Afterburner Program will be interesting enough for user to deposit (more) DENT into the AB Vault, but at the moment, (on average) users are withdrawing more than they are depositing.
SIM data and prepaid packages
As discussed above, there is no regular demand for these packages as the prices are too high. Only users who got DENT credits as a joiner bonus or earned free referral or Earn Tab rewards, will buy these packages.
Global Voice Bundles
There is just no demand for these bundles. The reason?
Partly due to unfamiliarity, but probably due to the fact that the caller still needs an internet connection (and in that case, he can also use WhatsApp or Skype), and that the voice bundles have a 90-day validity.
Plus the fact that a user first has to buy DENT credits (with a markup on market price), and the user will first have to buy more credits than needed as the DENT credits bundles can only be bought in certain amount.
And some users prefer the Afterburner Loyalty Program to get free voice minutes every 14 days.
Upcoming Marketplace for selling unused eSIM data
Well, we don’t know yet how this marketplace will look like. But let’s assume it’s like the current marketplace for tradeable SIM data and prepaid packages and voice bundles.
So, the (leftover) data plans are being traded with DENT as the trading pair.
Hence, new potential (DENT App and Exchange) buyers first have to acquire DENT credits or tokens before they can buy on the marketplace.
As we have seen above, to acquire (a small number of) DENTs (credit or tokens) involves additional costs. Think about the markup on the conversion/market price if someone buys a $ DENT Credits bundle. Or someone who buys the DENT token on external exchanges and has to pay withdrawal and transaction (ETH gas) fees.
On the other side, a seller of unused data, will get paid out in DENTs. And only if this user has access to the DENT Exchange, he can withdraw these DENTs. But be in mind that there is a 50,000 DENT minimum withdrawal threshold.
So, a regular user (with the current price of 1DENT=$0.000224) has to sell for at least $11.20 worth of data (to acquire at least 50K DENTs).
But how many users will end up with $11.20, about 2.59 GB of leftover data?
In all other cases, when a user has less than 2.59GB, he will get DENTs that he can’t withdraw and “only” use for…. buying data (duh).
So, besides that DENT App users can use the data for 365 days and can share the data with friends, who is going to sell unused data anyway?
Maybe, some traders who want to split the 10GB data plans ($39.99) into smaller sizes and take advantage of the quantum discount and sell for a higher price per GB than originally paid for. Let’s assume for a price between $3.99 (break-even) and $4.99 per GB (the general price DW is charging). But again…
Who is going to buy this data?
A regular user who wants to buy just 1GB, first has to buy the DENT $9.99 bundle and has to pay a 13.3% markup first (see table above).
(Note: the lowest $3.99 bundle is just not sufficient as the sales price will be higher – also because a user has to pay a 21.1% markup for this bundle).
So, only if the 1GB price on the marketplace is lower than $4.33 ($4.99 minus 13.3%), it will become beneficial. But assume someone follows these steps. Then, this user will end up with a number of DENT credits that he doesn’t need right now, and can’t withdraw or use otherwise until he needs more data.
Hence to summarize, too much friction, too much uncertainty with respect to DENT price, and too much work for a few (possible) cents discount.
Well, I hope you understand that this whole idea of selling unused data (for the expected small amounts) is an utopia as long as buyers first needs to buy DENTs and the seller get paid in DENTs with all limitations and restrictions.
So, this new marketplace won’t be used often by the regular DENT App user.
On the contrary, if DENT App users understand how the system works and know about the limitations and restrictions, they will become upset (frustrated and angry) as it’s not clear for most of them the moment they will buy their first eSIM data plan.
Think about all restrictions users will find out during the process like the markup price for buy DENT $ bundles, minimum withdrawal limit of 50K for DENT tokens, DENT credits can’t be withdrawn (only used to purchase telco products), DENT Exchange usages requires KYC/ALM registering (with can take many days), and that only citizens from 43 countries are allowed to use DENT Exchange.
Other fundamental changes that effect tokenomics
As DENT token investor, you should also know about these fundamental changes that the team introduced which differ from the original plans as described in the Whitepaper and roadmap, and have a significant effect on the tokenomics…
A) Multiple participants vs one supplier (with smaller use case)
The original idea was to create a marketplace where participants could buy, sell, trade, and transfer mobile data. Primary data that was offered by local carriers all over the world, and where these carriers allowed their users to sell unused data (secondary market).
Also, telco’s could get access to this marketplace and sell there data and prepaid top-ups directly to DENT App users.
So multiple suppliers (telcos and sellers of unused data) and multiple users as buyers.
Well, this has changed significantly as DW became a MVNO focusing on eSIM, and now is the only primary data supplier.
Just think about the difference for the tokenomics…
Multiple carriers who get paid for their data in DENT, or one single supplier, DW, who dominates the DENT/BTC marketplace on DENT Exchange by being the primary buyer and seller of DENT tokens?
(Also due to fact that there are almost no traders left in the DENT/BTC pair as a result of the withdrawal restrictions)
Or compare the original plan with lots of users (almost anyone) who have unused data (at the end of each month) that they want to sell for data packages all over the world for all supported carriers as described in the whitepaper with this example…
A simple use case of how DENT Exchange will work internationally: Mike is a customer of a US carrier, he owns 2,000 DENT Tokens. As he lands in Australia, he accesses the DENT marketplace at the airport though Wi-Fi and buys the mobile data he needs. This data could, for example, have been offered by Jane, who is a customer of an Australian carrier. Mike needs no extra agreements with any carrier, no SIM card changes, he just starts to use his phone on the Australian network. Jane is happy to earn DENTs and will spend them on her next trip to Europe during her summer holidays. Mike’s US carrier earns transaction fees, and Jane’s Australian carrier has increased his utilization against his respective cost share.
And compare that with…
just “a handful of” DENT App users who don’t use their full DENT eSIM data plan (at the moment of reaching their 365 validity term), and want to sell their leftover data on the new upcoming marketplace with all above mentioned expected limitations.
I hope you’ll see the difference.
B) One worldwide eSIM data plan vs multiple country/carrier data plans
And it also makes a huge difference if there is just one single worldwide data eSIM data plan that is being traded on the secondary market or that hundreds of local carrier or individual country plans can and will be traded.
Just look again at the original example above where Mike needs to buy an Australian carrier plan while visiting Australian. And Jane who want to sell her Australian data to save some DENTs for her trip to Europe later in the year.
Both Mike and Jane won’t buy or sell their data anymore as they just can keep and use their worldwide data plan.
So, a huge “market” with DENT trading volume just “disappears” if you compare the current situation to the original plans.
Let alone that the DENT eSIM data plans are not competitive in the “cheaper” countries (like EU) as described in this article about the optimal pricing strategy, such that sales are expected to be lower there than could have been achieved by using individual country plans. Hence, resulting in a smaller secondary market as well for these cheap countries.
C) DENT as the required cryptocurrency vs option to pay with fiat
In the original plans, all participants had to use DENT as the payment (and trading) vehicle. It was not allowed to pay with fiat or other (crypto) currencies.
Well, we know that it’s now possible (since April 2020) that DENT app users can pay with fiat as well. And due to the markups on the DENT $ credits bundles, almost 100% of the DENT eSIM data plan buyers are paying with fiat.
And yes, DW is buying the “related” DENTs on DENT Exchange, but as described above, with no real benefits for the tokenomics as DW can (and will) sell these “unnecessary” bought DENTs as soon as possible.
And with the upcoming Gigastore where resellers are allowed to buy DENT eSIM packages in bulk and sell them to their clients, I don’t expect any progress for the tokenomics as these resellers will probably (with 99% certainty) be allowed to purchase their giga plans with fiat. And of course, the clients of these resellers won’t pay in DENT as well but in local fiat.
How to improve DENT usages and tokenomics?
So, to summarize, in the primary market with just one supplier, DW, most purchases will be done with fiat as there are no incentives to first buy DENT credits or tokens.
On the contrary, DENT App users who want to buy DENT credits are being penalized with markups on the conversion/market price.
And the secondary market, for trading in the single worldwide unused eSIM data, where DENT is required as trading/payment vehicle, will probably have a very small trading volume due to long 365 days validity, sharing features, and limitations to withdraw DENT receipts (at low costs) among other limitations, and without reasons for users to buy/sell local data plans.
The only way this can change is if DW introduces some measurements to stimulate the DENT tokens and credits usages.
If you have read and understand this article, you have noticed the limitations in the current “ecosystem”.
Hence, it rather easy to come up with possible changes that will lead to higher DENT usages and “better” tokenomics.
- Reward users who buy DENT credits. Don’t penalize users who want to buy DENT credits with a markup on the conversion/market price but give them extra DENT credits the more they spend in dollars. These users commit themselves to purchase telco products from DW. Hence, reward them like other global eSIM providers do (for example RedteaGo gives $150 value in credits for people who pay $100 upfront).
- Reward users who pay with DENTs (credits or tokens) instead of fiat with discounts. This can be done permanently or via temporarily marketing campaigns to stimulate sales. [Update: On February 3, 2021, the marketing team launched a new campaign “Get 20% extra eSIM data if you’ll pay with DENTs instead of dollars“. Hopefully, this is the start for better tokenomics]
- Give DENTbacks. I mean cashbacks in DENT for every telco purchase. This stimulates users to come back and get a (small) discount on their future purchase. Optional: let users choose to get free DENTbacks instead of the free 10 minutes Global Voice minutes for each 1GB they’ll purchase.
- Require DENT credits for all micro-payments (up to $5.00 or maybe $10.00). So, all telco products with prices lower than $5.00 can only be bought with DENT credits. My advise is to come up with a DENT $5.00 bundle (instead of the current lowest $3.99 bundle). I mean small payments paid with PayPal or Credit Card have relatively high transaction costs. And this allows DW to come up with a 200MB data plan for $1.06 but to be paid with DENTs.
- Improve the Afterburner Benefits such that more users will deposit DENTs into the Afterburner Vault. Think about eSIM data benefits (as discounts or free data every 14 days).
- Improve access to Afterburner for iOS users and increase maximum maximum AB Vault for DENT App users (from 2 million to almost 10 million DENT). Either allow these users to deposit up to 9.990.000 DENTs in the AB Vault (just like DENT Exchange users), and allow them to transfer the extra 7.990.00 DENT (on top of the current 2 million threshold) back to any external wallet the moment they decide to unlock the deposit. But probably it is easier to create a DENT Exchange “lite” with only Afterburner features, or add the Afterburner to TEAMS such that anyone can use the Afterburner to the maximum.
- Improve the Earn Tab (Offerwall 4.0) in a way that users can earn more DENTs. And add partner deals to the Earn Tab. Just like Bunq gives their users access to 3GB free DENT eSIM data for users who download the DENT App and register themselves. DW can give their users free DENTs (or data) for performing tasks like downloading apps etc.
- Improve the referral system. Now referrers get only 100 DENTs and that’s way too low. You can’t buy a telco product for just 2 dollar cents, and you have to refer hundreds of new users to change your free DENT credits into for example 1GB eSIM data. Even if a referrer gets 5GB free eSIM data (perceived value about $20.00) as referral bonus the moment the new user purchases his first data plan, it’s just ridiculous to give 2 dollars cents extra in the form of 100 DENTs. The free data and free DENT credits should be more in balance.
- Allow DENT transfers inside the ecosystem. Allow DENT (App and Exchange) users to freely send DENT credits to other users.
- Introduce individual country eSIM data plans not only to become more competitive but also to increase the volume on the secondary unused data market.
- Introduce a real Pay as you go pricing model where users will pay on a transaction base with their DENT credits for all their telco usages (data, voice, SMS).
Will DW introduce some of these changes?
We don’t know. We only know that DW will add some data benefits to the Afterburner Loyalty Program.
But that’s by far not sufficient to turn the current “bad” tokenomics into “better” tokenomics such that DENT credits and tokens will used by more participants in the DENT ecosystem.
On the contrary, if you compare the aimed tokenomics as described in the original whitepaper where every participant had to use DENTs with the current situation, there is not much hope for DENT token investors and speculators for token appreciation…
As always this is no investment advice, do your own research.