Introduction of more user-friendly payment structures for bandwidth from dVPN applications built on Sentinel
This publication covers:
- An Overview of Current Payment Structure of ‘Pricing per GB’
- New Subscription Payment Structure to be Introduced
- Reintroduction of ‘Free dVPN’
Overview of Current Payment Structure of ‘Pricing per GB’
Currently, all payment for bandwidth provided by dVPN nodes is priced in terms of Token/GB. Currently there are two tokens enabled for payment for bandwidth on the Sentinel hub which are DVPN and DEC (Decentr). Any IBC token can be integrated for payment and more tokens including stablecoins in the IBC ecosystem will be added soon.
The current payment structure of paying a certain fixed number of tokens per GB of data (from the provider) is not as user-friendly as compared to subscription based payment structures which are the payment structures that almost all successful centralized commercial VPNs employ.
Currently the minimum pricing for bandwidth is set at 100 dVPN per GB with the implementation of the latest chain upgrade. This pricing can be amended through community-led proposals.
The traditional subscription based payment structure used for almost all commercial VPN applications provides users with the benefit of unlimited bandwidth, this is due to the availability for organizations to make use of servers which have unlimited bandwidth provision as VPN nodes. Unlike compute and storage resource which are always priced proportionally based on the amount of resource consumption, it is possible to get dedicated bandwidth lines offering an unlimited amount of bandwidth at a fixed price at high speeds. With the provision of unlimited bandwidth, the only option is to price use of product in terms of the duration of usage which leads to time-period based subscription pricing structures.
The current process of user-interaction in order to connect to a node is also a cumbersome process which requires users to first lock a certain amount of dVPN tokens with the desired node to ‘subscribe to it’ before being able to connect to the node. A subscription based payment structure which would not require a user to lock tokens or be authenticated before connecting to a node that is apart of a subscription model would be much less frictional process.
While subscription based payment models may be more user-friendly, it may be argued that denominating the pricing of bandwidth per GB may be more of an ideal free-market system which could lead to a more fair pricing structure. For this reason, the system of pricing of bandwidth per GB will not be eliminated and will always be an option for dVPN node hosts offering services to users (these nodes can always be used through the Sentinel CLI if they are not present in white-label applications).
New Subscription Payment Structure to be Introduced
Sentinel’s new payment structure allows for white-label application owners to create a ‘subscription’ which is a specific offer to a user for unlimited bandwidth at a fixed price from a group of nodes which a dVPN application owner has pre-paid.
A dVPN white-label application owner must determine the feasibility of the proposition of reselling bandwidth and must effectively price subscriptions in order to make a profit while maintaining competitive pricing with centralized VPNs. Even centralized VPN organizations are in the business of indirectly reselling bandwidth as they look to make a profit from the bandwidth that is provided from their cloud servers to a subscribed user.
Process of Creating and Connection to a subscription (Work in Progress)
*This process represents a completely on-chain process of subscription where the payment for subscription is being done in the form of on-chain tokens. For subscription structures which are paid for using 3rd party fiat payment gateways the processes differ.
Step 1. Registering as a ‘Provider
dVPN white-label application owners are defined as ‘providers’ in this context and will first have to register themselves as a bandwidth provider by depositing 25k dVPN (an amount set by the governance) in order to be a provider on-chain.
sentinelhub tx vpn provider register <NAME> — description <DESCRIPTION> — identity <IDENTITY> — website <WEBSITE> — chain-id sentinelhub-2 — gas-prices 0.1udvpn — node https://rpc.sentinel.co:443 — from <KEY>
Step 2. Defining the parameters of the subscription
After the process of registering as a provider is complete, a subscription plan must be created where the amount of data usage in the subscription can be set to unlimited and the exact price of the subscription and its duration or validity of the subscription period is defined.
sentinelhub tx vpn plan add <BYTES> <PRICE> <VALIDITY> — chain-id sentinelhub-2 — gas-prices 0.1udvpn — node https://rpc.sentinel.co:443 — from <KEY>
Step 3. Adding dVPN Nodes to the Subscription Offerring*This command is still under development*
Providers can manually add nodes based on their node address to the subscription. This command will be updated in the future.
sentinelhub tx vpn plan node-add <PLAN_ID> <NODE_ADDRESS> — chain-id sentinelhub-2 — gas-prices 0.1udvpn — node https://rpc.sentinel.co:443 — from <KEY>
Step 4. The process of users subscribing to an active subscription plan
sentinelcli tx subscription subscribe-to-plan <PLAN_ID> <DENOM> — chain-id sentinelhub-2 — gas-prices 0.1udvpn — node https://rpc.sentinel.co:443 — from <KEY>
*In the case of a 3rd party fiat payment gateway being implemented for payment for subscription, there will be different commands required to manually add a user to the white-list for a subscription after the off-chain payment has been confirmed.
Step 5. The process of users connecting to a dVPN node under the subscription plan
sentinelcli connect <SUBSCRIPTION_ID> <NODE_ADDRESS> — chain-id sentinelhub-2 — gas-prices 0.1udvpn — node https://rpc.sentinel.co:443 — from <KEY>
Reintroduction of ‘free dVPN’ applications
One of Sentinel’s most successful examples of true utility was its ETH based dVPN which was functioning from 2018 to early 2021 with an active userbase of 10s of thousands of users while boasting a total of over 500k Android installations. However, while this free dVPN application did display the potential that the Sentinel ecosystem had to penetrate mainstream userbases, this dVPN was indeed absolutely free and was not in anyway monetized leading to an unsustainable business model.
While the previous Sentinel free dVPN was not monetized, it is possible for ‘free VPN’ applications to monetize on their users in other methods than by extracting a direct payment for services from their users. For example, dVPN applications can employ methods such as using monetized video ads or other forms of marketing content to ensure that dVPN node costs are met without directly charging users.
Providing free dVPN services in a decentralized manner now can easily be done with the ‘Add Quota’ function which allows users to add other accounts into a subscription by providing them bandwidth to the subscription. For a specific use-case where there are free dVPN services being provided, the provider can add the public account address of every user who creates an account in the free dVPN application into the subscription’s list of white-listed accounts along with a data usage limit.
The process for the simple management of a free dVPN application is as follows:
Step 1. Creation of Subscription
Provider creates a subscription as shown in Step 1 of the previous section
Step 2. Creation of User Account and Storage of Public Key Information
Provider enables a user to create an account on the Sentinel Hub in their own dVPN application and the provider stores the information of the user’s account address (public key)
Step 3. Addition of User Account to Existing Subscription
Provider white-lists a user’s public key in the subscription allowing the user to use a certain amount of bandwidth from the nodes present in the subscription per month (can be set to unlimited)
sentinelcli tx subscription quota-add <SUBSCRIPTION_ID> <ACCOUNT_ADDRESS> <BYTES> — chain-id sentinelhub-2 — gas-prices 0.1udvpn — node https://rpc.sentinel.co:443 — from <KEY>
