GET token economics: Digging a network-moat
Being active in such a novel and ever-changing environment as crypto, we constantly challenge our assumptions and strategy. In crypto(economics), but also about how the ticketing/event market works. In light of these experiences, we have added a new policy in order to boost adoption and enter new ticketing verticals.
We are currently in a rather early phase of the protocol, meaning we have yet to demonstrate the added value of the GET Protocol in most ticketing verticals. Hence, in the short term, our focus is to create a critical mass in users as a means to build the added value of the protocol as a network or marketplace.
Most readers will know that smart ticketing is superior to the ‘naked private key’ QR-PDF ticket. Not only to prevent scalping, but also to generate higher event yields for the organizer. Managing customer experience, retention, personal retargeting and dynamic pricing are far more effective when the asset being distributed is fully digital ticket and interactive.
While having superior features is key in driving sustainable adoption in the long term, in the short term the best tool to drive protocol usage is by offering competitive pricing vs. the alternative provider. Subsidizing is a go-to-market growth strategy quite common for platform focused tech startups.
Fact: Traditional ticketing is (currently) cheaper than smart ticketing. For one, the tech required to build, support and deliver dynamic tickets/QR codes to every native app or browser is complex to both build and maintain. This shouldn’t be a surprise considering the traditional ticket journey is completed when a PDF hits the mailbox. In addition, smart ticketing has a higher cost overhead. Since for example SMS and payment service provider fees need to be baked into the fee of a ticket (so effectively covering costs for both the primary and secondary market). Over time costs for smart ticketing will likely decrease, as the product will slowly become a commodity (also removing the competitive edge). For the moment, this price cost premium is the reality we need to accept while still leveraging our head start.
After the added value is established
From our experience with theaters/comedians we know that once clients have experienced smart ticketing, they recognize its added value. However. clients in other ticketing verticals do not know our product/added value. With the cost premium, this is a point of friction. Hence we have decided to use the easiest and most effective tool in the business book; gain market share by competing on price.
To leverage this we issue subsidies in GET so that ticketing companies can enter ticketing verticals as they can price their smart ticketing service cheap. As they have less cost overhead. Note that it isn’t the ticketing company that is paying less to the protocol nor is the TC receiving any GET. It is the organizer that is receiving premium service, for a discounted price.
GET allocated as subsidy does not hit the open market nor is it ever touched by a servicing ticketing company. GET issued as a subsidy will never enter the circulating supply/open market. Subsidized GET will either be burned or returned to the the User Growth Fund.
Flipping the switch
After almost two years of testing and improving the product, we have the confidence and the data to know that organizers appreciate the added value of smart tickets. As such the subsidies will be only needed for a limited time. We know this. When the subsidy is revoked by the protocol, the clients will pay the full price for the service.
GET provided as a subsidy will have a burn schedule of its own. What this schedule exactly entails will be disclosed at a later point.
For the last months, we have been pushing this subsidized model to ticketing companies all over the world. This effort has been met with strong market interest, as one might has suspected after the announcement of GET total supply reduction.
Effect on the token economics of the protocol
To bite the bullet directly, yes. Discounting lowers the number of funds that will be allocated to buying GET from the open market in the short term. The flip side is that subsidized GET removes more GET from the circulating supply forever(compared to buyback). In the long run subsidies will provide the protocol with a network moat that is infinitely more defendable as a technical moat.
More about the GET Protocol
Any questions or want to know more about what we do? Join our active Telegram community for any questions you might have, read our whitepaper, visit the website, join the discussion on the GET Protocol Reddit. Or get yourself a smart event ticket in our sandbox environment. Download the GUTS Tickets app on iOS or Android.