The future of product distribution is in our hands
Maciej Zieliński
03 Jun 2020
One of its many current applications for blockchain is more efficient and effective distribution of products, which can permanently change the world of supply. Some companies working in the supply chain show what the future of blockchain distribution can look like - for example IBM Food Trust or TradeLanse.
In addition to the transfer of goods and services, supply chains also transport information. They often cause unnecessary costs and misunderstandings, contributing to poor company performance. The technological solution that is able to prevent this is blockchain. It can not only provide a much better level of cybersecurity in the distribution of goods and increase efficiency, but also give customers all the information they need.
Easily accessible and reliable data
Transparency is also one of the main advantages of this technology - since we are dealing with a common database, they are easily accessible to parties involved in all kinds of transactions. Moreover, once the data has been created, it cannot be deleted or changed, which makes it even more reliable.
Fraudulent transactions, counterfeiting and theft of goods are among the biggest problems of outdated, traditional means of product distribution. Any of these can be solved by using blockchain technology. On the one hand, it protects buyers and sellers with intelligent contracts, storing funds until all parties are able to verify the reliability of the transaction. Once it has been finalised, the authenticity of the purchased product can be automatically verified, and in the absence of confirmation, its route can be traced.
Even without suspicion of the originality of the goods, each product is observed from the moment it is entered into the system, through all transactions, to delivery to the customer. If a duplicate or unauthorized transaction occurs, it will be automatically verified. When using blockchain, it is not possible to falsify a payment transaction, records, storage conditions, delivery dates or dates.
IBM Food Trust and TradeLanse platforms
Although the advantages of this technology sound great, a profound transformation of the way products are distributed, eliminating outdated systems, will not happen overnight. Some supply chain companies are showing what the future of blockchain distribution can look like - such as IBM Food Trust and TradeLanse. This is not the first time, of course - over the last few years many companies have started using such systems to improve their daily operations.
- As far as IBM is concerned, what we can boast about is the we.trade platform, which operates in the context of trade finance on financial markets - says Maciej Jędrzejczyk CEE Blockchain Leader at IBM - It radically reduces transaction costs between small and medium-sized enterprises that want to trade with each other in the European space. At the moment, 14 commercial banks are attached to this platform and they function as interfaces for end users - enterprises.
Another solution that is indicated is the IBM food trust platform for food tracking. Thanks to the use of GSI standard and blockchain technology, all parties involved in the functioning of the food supply chain have full insight into every event.
- Of course, there are other platforms, such as TradeLanse, which tracks containers transported by sea - he adds. - We initially established it with the company Maersk, which handles the bulk of sea transport in the world. But at the moment Maersk is no longer the leader of the platform, many more players have appeared on it, together representing about 85% of the global market. So de facto, it has become the standard for digitising the flow of information and preserving it in a secure repository for already 160 commercial and state entities worldwide.
This technological solution can be used for the transport of valuable products, electronic products as well as everyday items. From medicines to electronic components - in any case, blockchain solutions can provide a permanent product register and secure verification.
The landscape of blockchain and cryptocurrency is continually evolving, marked by the relentless pursuit of models that not only enhance network security and decentralization but also deepen user engagement and ownership. At the heart of this evolution lies the concept of token distribution, a pivotal strategy that can transform users from passive participants into active stakeholders and owners within digital ecosystems. Token distribution is not merely about allocating digital assets; it's about creating a framework where each token serves as a beacon of ownership, rights, and incentives, aligning the interests of users with the long-term success of the platform.
As we delve into the world of token distribution, we find ourselves tracing the path of its evolution. From the foundational Proof of Work mechanisms, to the speculative fervor of ICOs, and onto the community-centric airdrops. Each era has brought with it lessons, challenges, and a deeper understanding of what it means to distribute ownership.
However, the journey has not been without its pitfalls. Many strategies, while successful in bootstrapping networks and attracting initial interest, have struggled to foster genuine user engagement or have inadvertently encouraged speculative behaviors that detract from the project's core value proposition. It's within this context that we explore the concept of "Progressive Ownership"—a model that aims to refine the token distribution process into a more nuanced, loyalty-driven approach that rewards true product-market fit and user commitment.
The Evolution of Token Distribution Models
The concept of token distribution has undergone significant transformation since the inception of blockchain technology. Each era has introduced new mechanisms for distributing tokens and lowering barriers to entry, while also revealing unique challenges. Let’s explore these pivotal stages in the evolution of token distribution models.
Proof of Work (2009–present): The Dawn of Hardware Formation
The journey began with Bitcoin, which introduced the world to the Proof of Work (PoW) model. This approach allowed anyone with computational resources to participate in network security operations, known as "mining," in exchange for tokens. This mechanism not only secured the network but also democratized access to token ownership. However, as the sector matured, mining became increasingly professionalized, requiring significant investments in specialized hardware. This shift heightened the barriers to entry, gradually sidelining the average user and emphasizing the need for substantial upfront investment. This altered the initial egalitarian vision.
ICOs (2014–2018): The Era of Capital Formation
Following the PoW era, the cryptocurrency space witnessed the rise of Initial Coin Offerings (ICOs). This period came with a new model where projects could raise capital by selling tokens directly to the public. This approach theoretically democratized investment opportunities, allowing projects to reach a broader audience beyond traditional venture capital avenues. Ethereum's ICO in 2014 stood as a landmark event, inspiring a wave of similar endeavors. However, the ICO craze also attracted numerous fraudulent schemes, leading to a regulatory crackdown and a reevaluation of this model,
Airdrops (2020–present): Bootstrapping Usage through Community Engagement
In response to the pitfalls of ICOs, the industry shifted towards a more user-centric model: airdrops. This approach involved distributing tokens freely to existing communities or users based on their engagement or historical usage. In principle this fosters a sense of ownership and participation without a direct financial investment. The era of airdrops, particularly during the "DeFi Summer" of 2020, sought to catalyze network usage and decentralization. However, the emphasis on broad, indiscriminate distribution often attracted short-term speculators rather than committed users. This complicates efforts to achieve sustained growth and genuine community development.
Reflections on the Evolution
Each era of token distribution has contributed to the blockchain landscape's growth, expanding access and participation in unique ways. From the hardware-intensive commitments of PoW, through the speculative enthusiasm of ICOs, to the community-focused aspirations of airdrops. The evolution of token distribution models reflects the cryptocurrency sector's dynamics to balance inclusivity, security, and sustainable development. Yet, as we've learned, each model comes with its set of challenges, highlighting the need for continuous innovation. New token distribution strategies come up to foster genuine user ownership and engagement in the ever-evolving digital ecosystem.
Progressive Ownership: A New Frontier
Amidst the evolution of token distribution models, with each era bringing its blend of innovation and challenge, the concept of "Progressive Ownership" emerges. This is a transformative approach aimed at realigning the incentives of blockchain applications and their users. This novel framework represents a significant pivot from previous models, focusing on nurturing genuine user engagement.
Foundation of Progressive Ownership
Progressive ownership stands on the idea that tokens should be distributed to users progressively for their contributions to the network. This model asserts that achieving product-market fit remains paramount and that token distribution should complement, not precede this fit.
In the realm of progressive ownership, tokens become a means to deepen users' commitment to an application. They transform active users into stakeholders with a vested interest in the platform's success. This approach aims to move beyond the shortcomings of indiscriminate airdrops and speculative ICOs. It proposes a more sustainable method of community building.
Key Principles and Advantages
Incremental Engagement: Progressive ownership advocates for rewarding users in stages, reflecting their growing engagement and value to the ecosystem. This method encourages long-term participation and deters speculative behavior by closely aligning token incentives with genuine user activity and contributions.
Opt-in Ownership: Central to this model is the concept of opt-in ownership, where users have the choice to convert their earned incentives or revenue shares into tokens representing a more profound stake in the project. This voluntary transition from user to owner ensures that tokens are held by those most aligned with the project's long-term vision and success.
Implementing Progressive Ownership
Successful implementation of progressive ownership requires careful planning and a deep understanding of user behavior and incentives. Projects must first establish a clear value proposition and product-market fit, creating an ecosystem where users’ contributions are quantifiable and rewardable. Following this, a transparent and accessible mechanism for transitioning users from passive beneficiaries of revenue share to active token holders must be established, ensuring clarity around the benefits and responsibilities of ownership.
Example Implementation - Project Catalyst
Project Catalyst is a Cardano-based initiative. It’s a decentralized funding mechanism that invites community members to propose projects, which are then voted on by ADA holders. Successful proposals receive funding in ADA, with over $79 million allocated to fund more than 1600 projects by March 2024. This process not only democratizes innovation within the Cardano ecosystem but also aligns with the principles of progressive ownership by giving token holders a vested interest in the network's growth and success. Through Project Catalyst, Cardano effectively engages its community in governance and decision-making, fostering a deeper sense of ownership and participation among ADA holders.
Conclusion
By aligning token incentives with genuine user engagement projects can pave the way for more sustainable development. Such an approach not only deepens user loyalty and retention but also fosters a more vibrant, participatory community. This is the groundwork for the next generation of Champions that will spread the knowledge about your platform.
If you're looking for ways to foster the adoption of your DeFi project, please reach out to contact@nextrope.com. Our team is ready to help you create a strategy that will grow your user base and ensure long-term growth.
FAQ
How to go about designing token distribution in practice?
It's a good idea to take inspiration from projects similar to yours, which succeded in terms of fostering progressive ownership.
Are airdrops effective?
Yes. Despite all their shortcomings, if implemented correctly airdrops can do great for marketing purposes for relatively low cost.
Why is fostering an ownership-based culture important?
Because if your users feel like they partially own the project, then they will contribute to the development process, and share that project with all their friends.
At Nextrope, we integrate cutting-edge technologies like TON into customized software solutions, propelling businesses into the future of decentralized applications (DApps), smart contracts, and beyond. We provide a custom TON development to help you create robust and extendible apps.
TON, or The Open Network, is a blockchain ecosystem designed for scalability, speed, and usability. Originally conceived by the founders of Telegram, TON aims to address the limitations of previous blockchain systems, providing a foundation for real-world applications on a global scale. With its innovative approach to data storage, processing, and transmission, TON stands as a groundbreaking platform for developers and businesses alike.
Key Features of TON
Scalability: TON's unique architecture allows it to handle millions of transactions per second.
Speed: Transactions on the TON network are processed swiftly, ensuring a seamless user experience.
Security: Robust encryption and consensus mechanisms safeguard all operations on the network.
User-friendly Applications: Tools like TON Wallet and TON Surf make accessing blockchain functionalities easier for everyone.
Why TON for Your Project?
Benefits of Using TON Blockchain
Adopting TON for your blockchain project brings numerous advantages:
High Throughput and Efficiency: TON's infrastructure can support extensive use without compromising performance.
Advanced Security Protocols: Benefit from state-of-the-art security, protecting your data and transactions.
Versatile Applications: From cryptocurrencies to decentralized data storage, TON's capabilities are vast and varied.
Comparision
Why Build Mini Games on TON
Access to 800 million Telegram users - Users can interact with games seamlessly. The Telegram API for creating TWAs allows you to create a user experience without leaving the main Telegram app.
User acquisition & retention - Utilizing Telegram as a distribution channel provides access to a wide range of traditional Web2 tools for user acquisition and retention.
Fast and cheap blockchain - TON is capable of processing more than 1,000,000 transactions per second while keeping fees low.The dApp serves as the user interface for TON ecosystem.
Easy registration & authorization - With TON Connect 2.0, dApps can connect to users' wallets, facilitating secure communication and interaction.
Recognizing the growing demand for lightweight, highly focused applications, Nextrope offers Mini Apps Development services on the TON platform. These mini apps can be seamlessly integrated into larger applications or platforms, providing users with specific functionalities without the need to download separate applications. This approach is ideal for businesses looking to offer value-added services within their ecosystems or to engage users with targeted, efficient applications.
Custom Blockchain Solutions
Our expertise in blockchain technology enables us to craft bespoke solutions based on TON, tailored to meet the specific needs of your business. Whether you're looking to revolutionize your industry or enhance your current offerings, Nextrope is your ideal partner.
Smart Contracts Development
We specialize in developing and deploying smart contracts on the TON network, ensuring they are secure, efficient, and fully aligned with your project requirements.
DApp Development
Leverage the power of TON with Nextrope's DApp development services. Our team creates decentralized applications that are fast, secure, and scalable, harnessing the full potential of TON's advanced blockchain technology.
Integration Services
Integrate TON blockchain technology seamlessly with your existing systems. Our integration services enhance your operations with increased transparency and efficiency, making your business ready for the future.
Why Choose Nextrope?
Nextrope stands at the forefront of blockchain innovation, with a dedicated team of experts passionate about delivering excellence. Our commitment to quality, client satisfaction, and comprehensive support from concept through deployment sets us apart in the blockchain services domain.
Conclusion
As the digital world moves increasingly towards decentralized solutions, TON Development Services by Nextrope offer a gateway to leveraging this transformative technology. With our expertise and innovative approach, we're ready to help your business navigate the complexities of blockchain and emerge as a leader in your industry. Contact Nextrope today to embark on your TON development journey.
If you are interested in utilizing TON or other blockchain-based solutions for your project, please reach out to contact@nextrope.com
FAQ
Why choose TON for blockchain projects?
TON provides scalability, speed, security, and user-friendly features, making it ideal for diverse blockchain applications.
Is TON suitable for small and medium-sized enterprises (SMEs)?
Absolutely, TON's flexible architecture makes it a great choice for businesses of all sizes, including SMEs seeking to leverage blockchain technology.
What services does Nextrope offer for TON blockchain?
Nextrope offers TON blockchain development, including custom solutions, smart contracts, DApps, mini apps, and system integration.
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