Why the Ontology Platform Should be the Choice for dApp Developers
Foreword
I am not a fan of today’s dApp ecosystems, though I understand building a good dApp ecosystem takes time.
I think there are some common issues with today’s dApp ecosystems:
- Low-quality products (bad user experience, product logic, and customer service)
- Unsustainable model (no stable source of income and sustainable operation model)
- Inexperienced team (no experience in team management and traditional apps)
Moreover, most dApp developers today have only one thing in mind:
They only want to make a quick buck from their dApps and do not have a solid product iteration and financial plan.
Most dApp games can’t even find their target users:
Think about it. Most dApps games wish to convert game players into users who will make transactions in their dApps and in turn play their games more. In reality, perhaps only one out of 100 users is willing to both play the game and make transactions. Surprisingly, most dApps are only focusing on this 1% of users.
What’s more surprising, dApp platforms even encourage dApps to do so.
The main aim of this article is to debunk the false claim of some dApp platforms that “they are the top 4 public blockchains because of the number of dApps and users on their platforms”. When you are not even clear about which token model works for your dApp ecosystem, whatever else you do will all be in vain. But some public chains even encourage dApps to falsify their data to support their thoroughly shaky claim.
In this article, I want to show dApp developers what a good dApp ecosystem should look like and encourage them to start thinking about how to build better dApps so that there will be a win-win for dApp platforms, developers, and users.
A Glance at Today’s dApp Ecosystems
Since the emergence of the Internet and the prevalence of smartphones, application development has become a hot topic. As the blockchain technology catches on, developing dApps (decentralized applications) based on this technology has also become the choice for many developers.
Why do developers develop applications? At the end of the day, they want their products to generate traffic and profit so they will have enough money to keep their projects running. The keywords here are traffic and profit.
Currently, the main categories of dApps on public chains include:
- Gaming dApps: Gaming dApps can generate both traffic and profit. But the security and trust system is yet to be built. Overall good for the platform;
- Games: Games can generate neither traffic nor profit and are solely supported by the subsidies from the platform. Fake data is rampant and games are no good for the platform;
- DeFi: DeFi dApps can generate profit and support their development. Their mid-to-long-term operation capability is yet to be proven. Overall good for the platform;
- Utilities: Utility dApps can generate traffic but may have difficulty supporting themselves. Overall good for the platform in the middle and long term.
To draw more developers, many public chain projects have rolled out their own dApp incentive plans. These plans are mostly the same in that they are aimed to attract more developers to develop dApps on their chains, which can bring more users and traffic, and in turn more transactions on the chains. On the other hand, why would developers want to develop dApps on these public chain platforms? Yes, they need the financial, operational, and marketing support from public chain projects. But another big reason is that they need the user base on these chains, whether they are technical users or token holders. In this way, dApp developers don’t need to worry about no one will use their dApps and they can generate traffic at low cost.
Something is wrong here. Yes, you are right. The dApp platforms and dApp developers want exactly the same thing from each other.
Now how could this possibly work out? Since dApp platforms can’t give dApp developers what they want and vice versa, it is impossible for them to work together, let alone generating traffic and profit.
You might say this is not contradictory since they can generate some new users for each other and can share their resources. Let’s see how it works in reality.
On public chain platforms with the single token model, we can think of two scenarios.
§ Scenario 1:
Since you need token to make transactions in dApps, when users use the dApps frequently, then according to the demand curve, the demand for the tokens will go up, thus the token price will rise.
As token prices rise, users will not want to spend the token they bought on the open market in the dApps because doing so will increase their cost. As a result, no one will want to use dApps. With no traffic and profit, the dApps will die.
§ Scenario 2:
When both the token price and demand go up, the chances are transactions in the market will probably increase and thus push up the supply. According to the curve below, we can see that when both the supply and the demand are increasing, the token price remains unchanged.
In this case, users would think that they can’t benefit from using the dApps and there is no potential profit in sight. With no users willing to use the dApps, developers will have no incentive to continue developing because they can’t see their profit increasing. As a result, the ecosystem will stagnate. With no profit and no product iteration, the dApps will eventually die.
If the quality of a public chain depends on the number of dApps or the dApp ecosystem on it, as one project claims, then I don’t think this project can go very far under the above two scenarios.
We can, therefore, come to the conclusion that only in the extreme case and under the assumption that the dApps are good with clear business logic and operation can they survive. However, in the early stages of the blockchain industry, this is next to impossible.
Conclusion: the single token model is not suitable for the development of dApp ecosystem.
What About Dual-Token Model?
Under the dual-token model, the profits of dApp developers come from dApp users.
Take Ontology’s dual-token model as an example. Ontology uses both ONT and ONG. The profits of dApps are in ONG, which is automatically generated for ONT holders for free. This means users are able to use the dApps almost without any cost. Moreover, in game or DeFi dApps, there is even a possibility of making a profit. Therefore, ONT holders will always have a free pass to the Ontology dApp platform and they can use the automatically generated ONG to contribute to the dApp ecosystem. When there are more transactions on the chain, the demand for ONG will go up and so will the price, thus driving up the price of ONT (as explained in my previous article about Ontology’s dual-token model). As a result, the assets of ONT holders will appreciate so that they can possibly earn more “free” ONG. Eventually, developers will have more profits to continue developing new dApps.
Under the dual-token model, the problems under the two scenarios above will no longer exist and we will instead see a sustainable dApp ecosystem.
You might ask what if the ONT price goes down? Would people still want to use the dApps on Ontology? If the ONT price falls, ONT holders will be more willing to stake their ONT into the Triones nodes to earn ONG rewards. Now when they have more ONG, why not use it in the dApps on Ontology?
So I think the dual-token model will fit well into the dApp ecosystem and can achieve a win-win for dApp developers, users, and dApp platforms. dApp developers no longer need to scratch their heads and wonder how to make money out of users, which would be too difficult. All they have to do is to make a good profit with dApp platforms and users and focus on developing their dream dApps.
You might say some dApps on Ontology are not as good as they cracked up to be. I agree. Just as I said before, Ontology can provide users with ONG to spend on dApps and easy access to dApps on our platform, but if your dApp is so bad that no one wants to use it, then there is really nothing we can do. After all, only when you are putting real effort into your products can you be recognized by users.
I’d like to use the chart below to show why Ontology’s dual-token model is better for the dApp ecosystem:
As we can see in the chart, under the dual-token model, each of the three parties reinforces each other, making a virtuous circle. As a result, there will be a win-win for all sides.
Afterword
Ontology will soon release its new dApp incentive scheme and we wish the new incentive scheme can usher in the dApp ecosystem 2.0 in which more phenomenal dApps will emerge.
At the same time, Ontology will also launch a platform similar to that of Blockstack for incubating high-quality dApps. We will work with universities, technical communities, and traditional game developers, such as ROIT, Blizzard, and Bluehole, to produce more killer dApps.
We welcome you to join the Ontology ecosystem and together we can achieve a win-win for all.
Find Ontology elsewhere
Ontology website / Ontology GitHub / ONTO website / OWallet (GitHub)
