Presearch, the project founded to, among other things, enable internet users to be paid for their searches, recently achieved a significant milestone in its development. It is also about to launch (the deadline stated by Colin Pape, Presearch CEO, in a recent Telegram post is “before Christmas”) another phase of the project which represents an even more important milestone.
So what’s happening?
The first change occurred last week and is actually quite simple. Until then, Presearch had to pay a third-party API provider to serve the searches of its users. So, the more searches, the bigger the expense.
It will come as no surprise, therefore, that Presearch did not conduct any major marketing efforts to increase the numbers of users: the more users, the more searches, the more it had to pay — without a way to offset these costs.
Remarkably, that situation has now completely reversed: what was an expense item has now become a revenue item. How? Presearch has acquired enough longevity and volume (despite the absence of marketing and mainly due to its remarkably strong community) to conclude a deal with major search providers which provides for no-cost access to organic search results and the ability to serve ads from existing ad networks. The search volume is still small, so the company has to work through intermediaries and doesn’t earn nearly as much as the major players in the search field. That notwithstanding, what was a cash drain has now become a source of revenue.
What will the revenue be used for? Among many other things, it will be used to accelerate marketing and development, and to purchase PRE tokens. Why the latter? Because Presearch has to obtain tokens to be able to pay users for their searches. (As Colin Pape, founder of Presearch put it in a Telegram post recently: “excess” income will be used to purchase PRE.)
There is a finite number of PRE tokens (and I’ll address the un-minted tokens below) and Presearch and its sponsors will need to constantly acquire new tokens to be able to pay PRE to reward searchers.
With searches now generating revenue, Presearch has begun marketing the project. It has a database of over 1 million people who have registered as Presearch users. It has never contacted all of them. It is now beginning to do so.
Of course, with the browser extension that was introduced over the summer, Presearch (the portal) is now far easier to use. Economics aside, until the extension was introduced (which means that users no longer have to input the Presearch URL or set that URL as the default homepage), it arguably didn’t really make a lot of sense to contact all of these registered users.
It now makes abundant sense and Presearch has begun doing so — along with a “Double PRE December” incentive program to further interest those and new users.
This has already begun to create a “virtuous circle”: more interest in the project, more users, more searches, more revenue, more PRE paid to searchers, more PRE purchases, probably positive token price movements, even more interest in the project, etc.
While these developments are all extremely positive, the good news doesn’t stop there: the new Presearch ad platform should be launched (according to Colin) before Christmas. That platform will introduce “keyword staking” to the advertising world.
It works as follows: if an advertiser wants its ad to appear when a given keyword is used in a search, it must “stake” (commit to lock up) PRE tokens to a given keyword through the ad portal.
Staking will be in the form of what I call a “transparent, perpetual auction”. So, for instance, if you want to control the keyword “astronaut”, you will be able to see (“transparent”) what other advertisers have staked for that word (if anything) and, if you feel it is worthwhile to do so, you can “out-stake” them to have your ad displayed instead.
Of course, someone could come along literally seconds later (“perpetual”) and “out-stake” you. So, logically, each bid should be significantly higher than the prior highest bid to increase the odds that the new highest bidder’s advertisements will be linked to that keyword for as long as possible.
Initially, as Colin has explained in a recent Telegram post, that will be the entire cost to advertisers, i.e., there will not be any additional cost for each click (the famous “click through”). As Colin pointed out, that will probably change in the future as the project matures.
This ad platform will further — and potentially radically — increase the demand for PRE, especially with the current, very low price. Today, it will probably take hundreds of thousands, or even millions of PRE to stake a popular keyword (e.g., Bitcoin) for any period of time. (In fact, there will be an enormous incentive for advertisers to immediately stake very large numbers of PRE while the price is low because, should the price increase significantly, it may well become prohibitively expensive to outbid an “old” stake.)
One of these two developments is already behind us; the other is imminent.
And that brings us to the elephant in the room: the 830 million un-minted PRE.
Colin has publicly stated over Telegram that the project is working on an updated whitepaper and roadmap that will outline the token minting plan in greater detail. Some of the ideas being contemplated are limiting the number of tokens minted on a time basis (e.g., no new tokens minted prior to April 1, 2020) and tying the number of tokens minted to the number staked on the platform. Time will tell how the project decides to handle this very important issue. It is important to note that it has been almost two years since any tokens were minted, so Presearch has been very conservative in this regard and has been very cognizant of the need to ensure the number of tokens in the ecosystem is consistent with actual usage.
Second, Presearch has at least as much incentive as any other person involved in any way with the project to maintain a viable token price (see, goose, golden egg, not kill). So, even if the company begins to mint tokens, you can expect the number and pace to be very conservative — unless the market simply demands that more be introduced.
Third, while one billion tokens (the total PRE that may be issued according to the project whitepaper) may sound like a lot, if one million users (less than the current number of registered Presearch users) each hold 1,000 PRE (which number can be acquired in 6–12 months simply by searching using Presearch), which as of this writing can be purchased for about $5, the total supply will then been exhausted.
Fourth, if you consider the number of tokens which will have to be staked, the number which will have to be held by Presearch (the company) to ensure sufficient inventory to pay searchers in PRE for their searches, and the infamous HODLers who are sitting on stashes of PRE, the actual number of PRE in circulation will be far less than 1 billion even when this supply is fully minted.
In short, the longevity of Presearch is now all but assured and the marketing can begin in earnest, extending the benefits of the project to a much broader audience. The impact on the token price will also almost certainly be profound and, more likely than not, quite positive.
As a result, Presearch (the project) now occupies some very rarified air for crypto companies: it has become both a viable fiat business and a viable crypto business. There are very few “crypto” projects which can make that claim.
 By Timothy Enneking, Managing Director of Digital Capital Management. Mr. Enneking is an advisor to Presearch and also owns Pre tokens. All of the information which is cited in the article is publicly available.