What value do Subscriptions (Subs) have for applications?
Subs are great for small apps with high growth potential needing a unique identity solution.
We’ve explored Sponsorships in three articles (1, 2, 3). In this one we’ll look at Sponsorships and Subscriptions in terms of the value they offer applications integrating with BrightID.
According to the BrightID whitepaper, there are two main reasons an application would want to buy Sponsorships:
1. To acquire new users.
One of first tasks for new BrightID users is to link their BrightID with applications. They do this from the “Apps” tab. Since the first app they link with will need to sponsor them, apps that have Sponsorships will be listed at the top.
2. To decide how BrightID funds are used.
BrightID’s funds come from the sale of Sponsorships and are governed by BrightID Main DAO.
There’s no expectation of profit from Sponsorships or governing BrightID (BrightID Main DAO managers are unpaid); it’s a matter of deciding how the money is spent. Obviously, there’s potential for conflicts of interest, which is why the managers should represent many projects that can keep each other in check. Indeed, the constitution of BrightID Main DAO mandates that no group of managers with a shared external affiliation should compose nearly half of the managers.
Because the price of Sponsorships is capped, there’s a lot of potential value in unique verifications that isn’t captured. An application that pays for a small portion of that value can help decide how to direct money to improve the verification process in the future.
Now that we know why an app would want to buy Sponsorships, we can understand why it would want to buy Subscriptions. One Subscription produces 252 Sponsorships over six years. The rate of production increases every year according to the chart below. Since the first 400,000 Subscriptions are on sale for $1 DAI each (the same cost as one Sponsorship), this represents a large savings.
Many apps have aspirations to grow rapidly, but don’t have up-front money to pay for the users they intend bring in. This is exactly where Subscriptions can help. Subscriptions generate a stream of Sponsorships that matches the exponential growth pattern to which a new application aspires.
In the future, there will be enough large, well-liked, and well-funded apps integrated with BrightID that users should have an easy time finding one they’re already using to sponsor them. BrightID will no longer serve as an advertising channel for smaller apps — only apps with many users will be able to garner the top spots in BrightID lists. Smaller apps that have unactivated Subscriptions or unassigned Sponsorships from Subscriptions can resell them to larger apps.
Since BrightID Main DAO only plans to sell 900,000 Subscriptions, future applications won’t have the option to buy them, but those with aspirations to grow quickly won’t face the same challenge of finding Sponsorships because there will then be plenty of large apps willing to sponsor new users. (Users only need one sponsorship per lifetime and it’s good across all apps.)
Subscriptions are therefore meant to attract apps that aspire to grow rapidly and want to take advantage of large discounts for being first.
Both Sponsorships and Subscriptions are on sale via the Sponsorships Dashboard. More information about the sale and the dashboard is available on this page.