The burn back report Q2 2020

Kasper Keunen
Jul 6 · 7 min read

It has been 3 months since the last buyback report, which means it is time for a new one! If you are interested in the mechanics and logic behind the buyback, I encourage you to read the blog linked below.

Important note! The data in this blog has been changed (15 July)

Due to a bug in the state change counter the initial burn report used a faulty state change count(109k instead of 164k). Resulting in a discount rate that was too low(31% instead of 54%). I want to thank Deofex for noticing this error! This mistake was caused by operator error (me not noticing a bug).

We have taken several measures to ensure this type of confusion and mistakes will not happen again. The most constructive of which is this public repo that anybody can run to verify if the reported amount of statechanges is correct:

In the remainder of the blog I have replaced the incorrect values to prevent any confusion. If you want to know what the original values where, please refer to the complete calculation in the public Google Sheet file. If any questions remain do not hesitate to reach out to me in our public Telegram group or by DM.

Previously I reported a total of 109 201 statechanges. However the actual state change count is 164 506. You can now check this count for yourself:

$ docker run counter — startheight 9743576 — stopheight 10338066

Summary Q2 the second quarter of the decade

The GET Protocol processed a total of 164 506 state changes in Q2 of 2020.

48 090 tickets & up sells have been issued and 1943 tickets being resold for a total of 562 events.

To fuel these state changes a total of 60 607 GET has been burned.

Proof of burn Q2: ETHERSCAN BURN PROOF 1 & ETHERSCAN BURN PROOF 2

Previous burns (new economics)
Q2 2019
-> 44 468 tickets sold |20 839 GET burned (etherscan)
Q3 2019 -> 20 592 tickets sold | 12 293 GET burned (etherscan)
Q4 2019 -> 62 215 tickets sold | 98 348 GET burned (etherscan)
Q1 2020 -> 81 061 tickets sold | 107 059 GET burned (etherscan)
Q2 2020 -> 48 090 tickets/upsells sold | 60 607 GET burned (etherscan)

Relative to previous burn

The total amount of state changes was 50% lower as the Q1 buyback. This decrease can fully be attributed to the COVID lockdown of the whole economy. Where Q1 was only partially affected by the lock down, the whole world including the event industry was effectively shut-in for the majority of Q2.

The total amount of tickets issued in the last quarter is down with 40.67% versus the previous quarter.

An all-time record was set in the total amount of events generating state changes; 562 events, an 178% increase to the previous quarter.

More details on the breakdown of this buy & burn back are provided in the body of this article.

Basis Calc Data Q2:
Total state changes: 164 506
Target rate per state change:
€0.07
Eur amount used for buybacks: €5 274
Total GET acquired OM in Q2: 27 760 GET

In an effort to make the buyback process less opaque all calculations can be tracked on Google Sheets. The blog will merely state the results of said calculation. I reckon the calculation is self explanatory, if not do let me know.

Calculation burn exchange buyback

Total funds for buyback Q2 (48k tickets) = €5 274

Amount GET bought from open market = 27 760 GET

Average buyback price of GET for Q2: +-€0.19

Undiscounted GET required = 60 607 GET

Discount to be provided = 32 847 (worth €6 241)

Total value of burn = €11 515 (at €0.19/G)

Total GET burned = 27 760 + 32 847 = 60 607 GET

Burn details — Sourcing

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In comparison to previous burns the Q2 burn is rather modest. Regardless, it is GET that will never see the the circulating supply ever again.

The Q2 burn address can be found here. With the transaction supplying the burned GET to the Q2 burn address can be tracked on etherscan here.

The portion of the GET bought from the open market was sourced from several exchanges and eventually sourced and forwarded in this transaction. The discount provided and burned by the UGF was sourced in this transaction.


Reflection & Guidance

It should come to no surprise that the amount of state changes processed by the protocol is down from previous quarters. As a sector that brings people together, the event industry has been one of the hardest hit sectors in the economy.

On an optimistic note, the last month alone the amount of state changes has picked up significantly. This can be attributed in part by the loosening of the social distancing guidelines. The month of June was responsible for more than 50% of the total state changes, signaling a clear uptrend.

In addition it is clear that the amount of events generating state changes is increasing (up 178% from the previous quarter). Whereas large events are surely the most exciting and challenging, having a ‘long-tail’ of smaller diversified events is key for sustainable growth and GET demand.

More diversified & resilient client base

It seems that COVID will have made the protocol more diversified in the types of events it is able to service. This will make the protocols economics more resilient for future demand & supply shocks. Allow me to share a few statistics to drive this point home:

  • 42% of the events generating state changes was from the museum vertical. 8% of the events generating state changes came from the offices vertical(still in undisclosed pilot phase).
  • Both verticals were non-existent only a few months ago. Which goes to show that adversity has its merits in thinking outside the box.
  • The event responsible for most of the state changes is in a familiar sector; music. However, these events are not enjoyed psychically but digitally. Ticketed online streaming events seem a phenomenon that will outlive the Corona virus.
  • The state changes generated by the offices vertical is likely to outlive the virus as wel. Our sales team has indicated that the pandemic has been positive for the recognition of the added value of smart ticketing.

If you want to read more about our efforts in expanding the usability of our ticketing tool-set, check out the blog linked below!

Discounts & Upsells

The discount rate applied in Q2 was somewhat higher than the rate we applied during previous burns. This can be attributed to the following factors:

  • The entry of the GET Protocol in new sectors like museums and restaurants.
  • The sector wide tightening of margins caused by the economic fallout caused by the lockdowns (less revenue, more costs, smaller margins, less money for luxury features etc.)
  • The inclusion of statechanges generated by upsells.

The discount rate that was introduced last year, was put in place to correct for situations where the ‘standard state change pricing’ fell short. Meaning that discounting could be used when the market price for smart ticketing briefly diverged from what the protocol charged for the service. While this is an effective tool, it is important that the protocol doesn’t have to rely on such optically arbitrary and centralized mechanisms. We have several ideas on how we can approach this issue.

One of these improvement is the introduction a new wiring for upsells and other digital assets (a wiring that contains less firings). As the upsell wiring will be less complex (less firings, less places) it will cost an organizer less state changes to use. This will have the effect of less state changes for upsells, but better predictable demand for GET as there will be no need for opaque discounting.


Forward Guidance

It is undeniable that the pandemic has put a significant dent in the amount of tickets issued by the GET Protocol. However, there is quite a lot of hard data showing that the adversity and pivots have resulted in a more diversified and resilient client base.

As the world opens up in the months to come, so will our client base of theaters, festivals and artists. There will be a lot of live-event backlog to make up for. I have no doubt that the third burn of 2020 will dwarf all those preceding it.


More about GET Protocol

Feedback
As always, if you have comments, questions or suggestions, please drop in to our active Telegram channel, and be sure to follow us on Twitter.

How to help out
If you are a fan of our system and want to help out, you can do so by leaving a review about GUTS on Google, the iOS app store or Google Play store.

Where to buy GET
Want to get your hands on some GET tokens? Here’s an easy guide.

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A blockchain-based honest ticketing solution for all.

Korea
Our Korean Telegram channel can be found here, and our Naver page is here.

Learn more
If you want to know more about what we do, read our whitepaper, visit our website, or join the discussion on the GET Protocol Reddit.

Exchanges
If you would like to see the GET token listed on specific exchanges, the best way to do this is to (publicly) let exchanges know about the project. The more they hear about it from actual traders, the better!

GET Protocol

GET Protocol updates and announcements

Thanks to Olivier Biggs

Kasper Keunen

Written by

Developer at the GET Protocol https://get-protocol.io & https://guts.tickets/

GET Protocol

GET Protocol updates and announcements

Kasper Keunen

Written by

Developer at the GET Protocol https://get-protocol.io & https://guts.tickets/

GET Protocol

GET Protocol updates and announcements

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