An extremely new economic momentum that, in my view, will revolutionize the donations economic market.
Going back to May 5, 2017, I wrote an article about Ethereum (in portuguese), a crypto-token (or cryptocurrency) that has since revolutionized Internet future’s technology, finances and infrastructure.
At that time, I realized how valuable and revolutionary the project was and the size of the potential for change and disruption it could motivate.
I bought Ethereum at a price of US$ 48 (forty-eight dollars) and today, exactly 4 years later, it has a unit price of US$ 3,300 (three thousand and three hundred dollars), that is, approximately 7,000% (70 times) appreciation!
I knew this was going to happen, since I understood this project usefulness. Ethereum implemented the concept of Smart Contracts, which represent immutable agreements that regulate certain rules for the flow of money in certain contexts.
It is different from Bitcoin, which, although better known, has no obvious utility and is priced and valued based only on market speculation.
Last year, Ethereum’s Blockchain innovation enabled a new ecosystem called DEFI - Decentralized Finance.
This ecosystem is a step beyond the Fintech market, as it allows the implementation of financial services, offered by banks and fintechs, in a distributed manner, without a centralizing entity.
Blockchain is something new. Smart Contracts is an evolution on top of the blockchain. DEFI is an evolution on top of Smart Contracts. Here we arrived at the DEV Protocol, which is an evolution on top of DEFI.
In this article, I will explain and you will notice how new this concept is.
What encouraged me to write this article is the potential I saw in this protocol, as big as I saw in Ethereum four years ago (and it proved to be true).
What is DEV Protocol? permalink
DEV is a protocol based on Ethereum's blockchain, which allows open-source projects (Open Source Software) to finance their development in a sustainable way.
Patrons can make a stake on DEV tokens for projects they want to support. The protocol creates income that is shared between the patron and the project developer.
DEV protocol is the only platform that allows both patrons and developers to earn money by supporting each other.
The same dynamic that is being used today with developers of open-source projects can be applied to digital influencers, who have a fan base on social networks, and even to NGOs and charity homes that are financed by donations.
In the future, the protocol will connect with other markets such as Youtube, Spotify and the academic market and will allow all creators to tokenize their work.
This is a major innovation in the mechanism for recognizing value and reward of the work, which previously depended on donations.
We are living in a revolution of creative market.
Why invest in this protocol? permalink
Since I first saw this project, it has incited me. I bought a little bit to be exposed to it and feel how it would evolve, like I do with all the new cryptos I use to deal.
I first bought DEV on March 20, 2021 at a unit price of US$ 11.67 (eleven dollars and sixty-seven cents).
Then I returned to read a little more about it and think about the economic dynamics it had created. I have quickly seen applicability to other markets (the first time I came across it, I thought it was only applicable for open-source projects).
Then I met P. (name used online) who called me by Telegram. He is a Brazilian who was in the DEV Protocol group. We arranged to talk and I understood the vision of the project better. It was he who told me about the forethought to operate in other markets (I had not yet read the official documentation).
After that conversation, I bought a little more, this time at the price of US$ 10.87 (ten dollars and eighty-seven cents) and I studied even more.
Another interesting news is that Eelco Fiole, PhD in economics, former CFO of Tezos and a high-level investor in blockchain, joined the DEV team and founded DEV Null, a company in Switzerland that will manage the evolution of the DEV Protocol . He is the board member and the Japanese, creators of the DEV Protocol, make up the executive team.
I invested and continue to invest in this protocol because I believe that it is incredibly useful and will affect all markets that live on donations.
The alignment of interests and incentives proposed by the DEV Protocol are very smart.
I believe that the future of the donation can be reverted to economic dynamics made possible by smart contracts running on blockchain.
And this is all just at the beginning. The Market Cap for the project, at the time of writing, is approximately US$ 12M (twelve million dollars). This is very low compared to other crypto projects.
As I believe that the crypto infrastructure will be the basis of the economy in the future, it was not hard to believe in this project.
How does this protocol’s Tokenomics work? permalink
Individuals produce value through activities. The Dev Protocol offers market, staking (financial support) and reward distribution resources to tokenize these activities and negotiate them through P2P (peer-to-peer).
Staking is a new way of trading money using the inflation mechanism. Through staking, the sustainability of the creators' activities is guaranteed and users receive value at zero financial cost.
It is a mechanism that provides profit for all activities that were previously carried out free of charge or through other mechanisms of indirect monetization.
In practice, the creator registers his activities as being a property in the protocol.
Sponsors can invest their DEV tokens in the protocol, choosing which property they want to share the revenues with.
The protocol generates new currencies and the income generated from this investment made by the sponsor in the creator's property is distributed to both.
At the time this article was written, the protocol was generating an APY (which is the annual income considering compound interest) of 33.85% for the sponsor and 35.23% for the creator.
That is, if I am a sponsor and I stake the equivalent of US$ 1000 (one thousand dollars), after one year I receive US$ 338.50 and the creator (property owner) that I am investing will receive US$ 352.30.
This APY is variable. The more money invested in the protocol, the lower the APY. The more properties registered, the higher the APY. So the supply and demand of creators versus sponsors keeps the balance of the equation.
Thus, creators can convince their followers and fan base to staking on the DEV platform as a way of contributing to their work continuity. It is as if the fan base and followers are "donating" on a recurring basis, but still having the money they would be donating and still getting money for doing so.
The more people use the protocol, the greater the purchase demand and the higher the price of the token.
How to buy the DEV token? permalink
In order to buy DEV today, you need to use a decentralized broker, like Uniswap or 1INCH.
At the time of writing this article, that token is not yet listed in any centralized broker.
Nowadays the Internet has a lot of information on how to use decentralized brokers and so it will not be necessary to further explain in this article. If you are not familiar with the DEFI market, read about it before proceeding.
The crypto market is evolving at a fast pace and it is very likely that the financial market will be taken over by DEFI in the near future.
New economic dynamics that could never be made possible are emerging with new projects that run on Smart Contracts.
DEV Protocol is a new project, which proposes a dynamic incentive to sponsor open-source projects (and later any creative work), far superior to the donation mechanism.
I believe that this is one of the projects that has a lot of potential for social transformation because it makes it possible to sustain initiatives that in the past depended on donations, and that are mostly very useful to the world.
In this article I explained what the DEV Protocol is, how token economics works and how to invest in it.
I appreciate if you can give a feedback about the article in the comments below.
Thank you and see you next time.
P.S. This article was also posted on my personal blog.