Explaining PING’s Core Utilities and Sonar’s Network Adoption Model
Presented by Cristiano Troffei, Sonar CIO
What is PING for and how it is designed for growth
👆 Disclaimer: All shared plans will need to remain flexible in order to adapt to the rapid and ongoing evolution of the market and DeFi environment. Adaptability to the changing needs and expectations of users and the market is a central tenant of our business strategy.
- PING has multiple use cases and will be the native currency of the entire platform — acting as fuel for a plethora of interactions/transactions.
- Users will be incentivized to hold/stake PING to unlock progressive tiers — leading to exclusive access to advanced features as well as rate slashing for any fees on the platform.
- Platform contributors will be rewarded for actions that add value, foster growth, and maintain the quality of all services provided.
- Businesses will use it to access premium API endpoints and development tools.
- PING will serve as the native currency for the Sonar DappStore (Developers publishing on the Sonar DappStore will monetize via several revenue models — one-time purchases, subscriptions, and more.)
Sonar Ecosystem Theory and Design
Proper design of the system’s economy is possibly the most important thing to consider when building (or evaluating an investment in) any token-based web3 project. Without a finely crafted network of incentives to use the token and the utility behind it, it would be impossible to foster sustainable growth for the project.
The best digital economies are purpose-driven, hence PING was born with the explicit goal of fueling and governing interactions on the platform while supporting its growth through fine incentive engineering in multiple dimensions (user, creator, and builder).
Building compelling products with unique and carefully designed features is only one part of the bigger picture. It’s through an elaborate architecture of “user stimuli”, on multiple levels throughout the platform, that we can ensure exponential growth. The end goal is to create an economic flywheel — a set of interconnected incentives designed to sustain user adoption and retention for many years to come.
Simply put, our goal with the incentive layer is to enrich our value proposition in such a way that it becomes a self-sustaining mechanism with each part of the whole helping the rest grow.
So once the interface and UX design is complete, the ecosystem’s behavioral design layer must be built on top.
The following components must be embedded into the system:
- Motivation for users to invest/trade/hold the token (PING growth)
- Motivation for users to help in fostering adoption (Ecosystem Growth)
- Motivation for creators to build value for the ecosystem (Ecosystem + Business Growth)
Many layers in the system can contribute to its growth, but the greatest results come from combining an indispensable token use case and incentive structure — which will mutually increase the ecosystem’s value.
We also believe that the user role must be elevated to that of a contributor in the eyes of the system’s designers. The value of an ecosystem in which the users are incentivized to contribute to its growth becomes evident in multiple ways over time.
First and foremost it is not only ethically correct but greatly enhances the identification of new development opportunities and leverages the userbase to grow and build up value for themselves — which is an added benefit to any product but an absolute requirement for products that have the goal of decentralization.
Besides the end-user, other contributors receive and share value simultaneously, in harmony; creators and developers build content and products that enrich the ecosystem’s offering and increase its value, as well as generate revenue for the business.
Token Utility and Use Cases
In utility tokens like PING, investment value correlates to the actual demand for it in the market, and demand is created by providing real use cases — reasons and incentives for it to be spent or held.
- Transactional value
Many functionalities within the ecosystem will integrate a monetization model designed to empower its sustainable growth from the outset — transaction fees, subscriptions, and fractionalized payments (gas) for advanced features.
But the revenue generated from native features is only the start. With the launch of the integrated DappStore, the ecosystem will permit any 3rd party developer to build and ship new Sonar Apps and Plugins, each of which can in turn have their own monetization model and contribute to the platform’s economy and exponentially increase demand for PING.
Similar to the Google Playstore or Apple AppStore, Sonar will provide tools to easily create apps and plugins to be marketed inside the ecosystem’s DappStore, retaining ~20% of the Dapp’s revenue.
In summary, PING will be used as a payment vehicle for:
- Gas for transaction-based functions.
- Use of premium features in native apps.
- Monetization models for 3rd party apps in the Sonar DappStore.
2. Holding incentives
Another way to increase token value is by limiting the circulating supply. We can do this by providing additional incentives for users to hold more PING for longer periods.
By offering staking we’ll give users the opportunity to generate passive income on their tokens. Related to this, we are developing an exciting dynamic that will be thoroughly explained in an upcoming article.
Returning to the ecosystem incentives for becoming a long-term PING holder, the often mentioned “Tier System” will provide users with the following benefits:
- Early access to new features.
- Access to advanced tracking and automation features.
- Discounts on any paid service (transactions, gas-based features, subscriptions…).
- Voting rights.
Pairing this huge set of benefits with PING’s deflationary nature, the system is tuned for exponential growth.
The value of a network is proportional to the square of the number of connected users. As the physical cost of the network grows linearly, its value grows exponentially
– Robert Metcalfe (inventor of Ethernet)
Explained simply, each new component in a system brings exponential value by increasing the number of connections, which in turn creates new opportunities for growth.
Incentives and rewards are then ultimately directed to boost this inherent property, the network effect, in order to increase the scalability potential and adoption rate.
By adjusting our perception of the role of the user from someone who merely uses our products to someone who contributes to the ecosystem as a whole, we can design a better user experience that leads them to act in favor of the system. Users of the platform can assist curation, drive growth, and much more — but only if said system provides clear goals and an apt incentive structure to achieve them.
Ultimately, this can be seen as a decentralized version of old-school marketing, rather than paying to reach and pester consumers to adopt your product, you give them the right value and added reasons to engage, build and ultimately, stick around. A much better approach if you ask us.
A self-perpetuating, virtuous cycle of adoption and creation on both sides of the ecosystem — user and builder — drives the entire product forward and to new heights.
What about governance?
From the very start, we strived to imagine how to solidify and guide all processes to make for a truly decentralized system.
The weight of each actor behind such an autonomous machine must be finely tuned. Finding the right balance is everything and the wrong distribution of power could make or break the ecosystem.
For this reason, it’s imperative not to jump the gun on finer decentralization plans until later down the road.
What we can already state with an high degree of certainty is that governance and voting power won’t be solely based on token ownership to avoid unfair concentration of power, and we expect the need for utilizing novel concepts like the distribution of “Soulbound” (unique to a specific user and non-transferable) NFTs for actors earning a special status within the ecosystem, using meritocratic criteria or other means of attribution based on platform value creation and participation.
But before getting to “push the red button”, making Sonar a self-sustaining ecosystem, we’ll be introducing governance in segments and progressively delegate important decisions to the community of users and contributors.
More details about the governance and incentive systems will be expanded upon in further articles.