Insourcing blockchain vs outsourcing blockchain

Maciej Zieliński

28 Apr 2021
Insourcing blockchain vs outsourcing blockchain

Despite dynamic development of the blockchain industry, one thing has not changed: the success of the project is closely related to the knowledge and experience of the programmers working on it. Therefore, it is crucial to answer the question which is the better choice: blockchain outsourcing or insourcing blockchain?

Various enterprises, from small startups to biggest banks and shipping companies all over the world, show their interest in the blockchain technology. That’s why there is no universal answer. Before making the decision, most importantly you should thoroughly evaluate your company’s needs, and the characteristics of the blockchain project you want to implement. To make it easier for you, we at Nextrope analyzed pros and cons of both solutions, 

Insourcing Blockchain

It’s worth noting that finding a Blockchain programmer is not an easy task. According to statistics, on average there are 14 job offers for each specialist.  Most likely the situation won’t change for better, as U.S. Bureau of Labor Statisticresearch shows, demand for Blockchain programmers will continue to grow. 

On the other hand, if you succeed to hire a Blockchain programmer, insourcing Blockchain can give you more control over the project and increase work effectiveness. 

Insourcing Blockchain - Pros:

  • potentially more control
  • project’s technological independence 
  • direct and immediate instruction flow

Insourcing Blockchain - Cons:

  • large costs of maintaining internal team
  • possible failure of recruitment process
  • versatility of employed specialists decreasing with time
  • time consuming recruitment process 

Internal teams are often good at general programming tasks but when it comes to the newest technologies like Blockchain, many companies eventually discover that their staff is not properly qualified to develop these technologies. Moreover the recruitment process and onboarding for new employees might turn out rather costly and time consuming. 

insourcing blockchain

Hiring your own team might be beneficial when:

  • You want to diversify an existing team by hiring new employees who may bring new, fresh ideas. 
  • You need a Blockchain programmer for a longer run, not only for a short period.
  • You are able to pay for programmers workplace, necessary equipment, hiring taxes and insurances. 
  • You have the necessary time to introduce the project to the new hire.

Hiring an insource programmer is most often beneficial for large companies that have short and long-term goals related with software development. To make hiring the programmer worthwhile, the team should be able to specify the scope of knowledge and skills that they search need. Only then, the company can effectively look for a suitable employee. 

Outsourcing Blockchain vs insourcing Blockchain

Outsourcing Blockchain most often takes two forms: independent blockchain programmer or a whole software house. The first option is most suitable for short-term projects that require task-oriented results. On the other hand, a software house can definitely satisfy more outsourcing blockchain related needs: from a single developer for a specific task to an interdisciplinary team of blockchain experts that besides programming can also take care of creating business logic or provide legal advice. 

Modern software houses provide not only programming but also consulting services, the experience of it’s specialists can give you a new, fresh look at your project and allow you to adjust it to technological reality. 

Outsourcing Blockchain - Pros:

  • lower project realization costs 
  • vast list of various available technologies and tools 
  • accelerating the product launch 
  • access to comprehensive knowledge of blockchain experts, including but not limited to programmers
  • no need for recruitment process 
  • possibility to fully focus on the remaining elements of the project
  • if needed - faster project scaling
  • predominantly high product quality (depending on chosen company)

Outsourcing Blockchain - Cons:

  • technological expertise comes from outside the company
  • no direct control over the project (however, a good software house allows you to contact not only the project manager but also any employee responsible for your order) 
insourcing blockchain

Outsourcing Blockchain is most beneficial when:

  • You know specifically what you need from the team and you can communicate these needs (in the case of a team or a freelancer that connects closely with your team)
  • You don’t have enough knowledge about the technical specification but you know exactly what effect you want to achieve 
  • You created a specification and tasks list but have limited time to hire and train new employees
  • You want to minimize costs - outsourcing is most likely less costly than maintaining an internal team 

Outsourcing Blockchain vs insourcing blockchain - Nextrope

Nextrope is a polish software house providing outsourcing Blockchain services. Each project we approach with extraordinary attention to details and personal involvement. Among our clients we have revolutionary financial and legal startups, and one of the biggest banks in Poland - Alior Bank. More stories of our success here

With years of experience, we simply know what makes projects fantastic. If you want to know why Nextrope - contact us for free consulting: contact@nextrope.com

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Aethir Tokenomics – Case Study

Kajetan Olas

22 Nov 2024
Aethir Tokenomics – Case Study

Authors of the contents are not affiliated to the reviewed project in any way and none of the information presented should be taken as financial advice.

In this article we analyze tokenomics of Aethir - a project providing on-demand cloud compute resources for the AI, Gaming, and virtualized compute sectors.
Aethir aims to aggregate enterprise-grade GPUs from multiple providers into a DePIN (Decentralized Physical Infrastructure Network). Its competitive edge comes from utlizing the GPUs for very specific use-cases, such as low-latency rendering for online games.
Due to decentralized nature of its infrastructure Aethir can meet the demands of online-gaming in any region. This is especially important for some gamer-abundant regions in Asia with underdeveloped cloud infrastructure that causes high latency ("lags").
We will analyze Aethir's tokenomics, give our opinion on what was done well, and provide specific recommendations on how to improve it.

Evaluation Summary

Aethir Tokenomics Structure

The total supply of ATH tokens is capped at 42 billion ATH. This fixed cap provides a predictable supply environment, and the complete emissions schedule is listed here. As of November 2024 there are approximately 5.2 Billion ATH in circulation. In a year from now (November 2025), the circulating supply will almost triple, and will amount to approximately 15 Billion ATH. By November 2028, today's circulating supply will be diluted by around 86%.

From an investor standpoint the rational decision would be to stake their tokens and hope for rewards that will balance the inflation. Currently the estimated APR for 3-year staking is 195% and for 4-year staking APR is 261%. The rewards are paid out weekly. Furthermore, stakers can expect to get additional rewards from partnered AI projects.

Staking Incentives

Rewards are calculated based on the staking duration and staked amount. These factors are equally important and they linearly influence weekly rewards. This means that someone who stakes 100 ATH for 2 weeks will have the same weekly rewards as someone who stakes 200 ATH for 1 week. This mechanism greatly emphasizes long-term holding. That's because holding a token makes sense only if you go for long-term staking. E.g. a whale staking $200k with 1 week lockup. will have the same weekly rewards as person staking $1k with 4 year lockup. Furthermore the ATH staking rewards are fixed and divided among stakers. Therefore Increase of user base is likely to come with decrease in rewards.
We believe the main weak-point of Aethirs staking is the lack of equivalency between rewards paid out to the users and value generated for the protocol as a result of staking.

Token Distribution

The token distribution of $ATH is well designed and comes with long vesting time-frames. 18-month cliff and 36-moths subsequent linear vesting is applied to team's allocation. This is higher than industry standard and is a sign of long-term commitment.

  • Checkers and Compute Providers: 50%
  • Ecosystem: 15%
  • Team: 12.5%
  • Investors: 11.5%
  • Airdrop: 6%
  • Advisors: 5%

Aethir's airdrop is divided into 3 phases to ensure that only loyal users get rewarded. This mechanism is very-well thought and we rate it highly. It fosters high community engagement within the first months of the project and sets the ground for potentially giving more-control to the DAO.

Governance and Community-Led Development

Aethir’s governance model promotes community-led decision-making in a very practical way. Instead of rushing with creation of a DAO for PR and marketing purposes Aethir is trying to make it the right way. They support projects building on their infrastructure and regularly share updates with their community in the most professional manner.

We believe Aethir would benefit from implementing reputation boosted voting. An example of such system is described here. The core assumption is to abandon the simplistic: 1 token = 1 vote and go towards: Votes = tokens * reputation_based_multiplication_factor.

In the attached example, reputation_based_multiplication_factor rises exponentially with the number of standard deviations above norm, with regard to user's rating. For compute compute providers at Aethir, user's rating could be replaced by provider's uptime.

Perspectives for the future

While it's important to analyze aspects such as supply-side tokenomics, or governance, we must keep in mind that 95% of project's success depends on demand-side. In this regard the outlook for Aethir may be very bright. The project declares $36M annual reccuring revenue. Revenue like this is very rare in the web3 space. Many projects are not able to generate any revenue after succesfull ICO event, due to lack fo product-market-fit.

If you're looking to create a robust tokenomics model and go through institutional-grade testing please reach out to contact@nextrope.com. Our team is ready to help you with the token engineering process and ensure your project’s resilience in the long term.

Nextrope Partners with Hacken to Enhance Blockchain Security

Miłosz

21 Nov 2024
Nextrope Partners with Hacken to Enhance Blockchain Security

Nextrope announces a strategic partnership with Hacken, a renowned blockchain security auditor. It marks a significant step in delivering reliable decentralized solutions. After several successful collaborations resulting in flawless smart contract audits, the alliance solidifies the synergy between Nextrope's innovative blockchain development and Hacken's top-tier security auditing services. Together, we aim to set new benchmarks, ensuring that security is an integral part of blockchain technology.

Strengthening Blockchain Security

The partnership aims to fortify the security protocols within blockchain ecosystems. By integrating Hacken's comprehensive security audits with Nextrope's cutting-edge blockchain solutions, we are poised to offer unparalleled security features in our projects.

"Blockchain security should never be an afterthought"

"Our partnership with Hacken underscores our dedication to embedding security at the core of our blockchain solutions. Together, we're building a safer future for the industry."

said Mateusz Mach, CEO of Nextrope

About Nextrope

Nextrope is a forward-thinking blockchain development house specializing in creating innovative solutions for businesses worldwide. With a team of experienced developers and blockchain experts, Nextrope delivers high-quality, scalable, and secure blockchain applications tailored to meet the unique needs of each client.

About Hacken

Hacken is a leading blockchain security auditor known for its rigorous smart contract audits and security assessments. With a mission to make the industry safer, Hacken provides complex security services that help companies identify and mitigate vulnerabilities in their applications.

Looking Ahead

As a joint mission, both Nextrope and Hacken are committed to continuous innovation. We look forward to the exciting opportunities this partnership will bring and are eager to implement a more secure blockchain environment for all.

For more information, please contact:

Nextrope

Hacken

Join us on our journey to deliver top-notch blockchain tech and a safer future for the industry!