CDT Staking

What is CDT?

First and foremost, CDT is used to access the various features and functionalities that Blox offers. It also acts as a discount token for businesses and enterprises.

Before we dive into the details, in a nutshell, holding CDT gives you access to blox platform features and use of its full potential, all depending on the amount of CDT and the duration of the commitment. Regardless of the tier of service you select, if you hold CDT and are willing to ‘commit’ it, you can earn a discount of 50%.

 

How to stake CDT?

Please visit the following link for staking CDT.

What does staking actually mean?

The term ‘Staking’ derives from the type of algorithm by which blockchains get to a consensus called “Proof of Stake”(PoS). Under PoS, once the staked wallet is validated, the ‘owner’ receives rewards (usually in the form of tokens).

In blox, this is not the case and staking takes on a different form. Essentially, Staking is simply committing a positive balance of CDT for an agreed upon period of time. As a business tier user, you’ll receive a discount on the monthly subscription plan of your choice, while as a professional trader you get extra Tx storage as long as your AUM is below the business threshold as determined by blox.

Why staking for a discount – Value of economic commitment?

For years companies across different industries have come to realize the economic value of their clients’ commitment to a service or product for long-run planning. Knowing that a consumer is committed to paying a certain amount of money for a predetermined period of time, gives businesses the ability to plan ahead without having to ‘chase’ providers, suppliers or clients for recurring payments.

Example – Yearly subscription vs Monthly subscription. A user makes a bigger economic commitment by purchasing in advance, a longer subscription plan at a lower cost (per unit).

Let’s break it down to see how it could benefit a business.
Behind the scenes of any ‘discount’, there is a complex system of risks and rewards driving sellers and buyers to find an equilibrium between the sellers’ fear of customer churn and the customers’ cost of buying (or committing to) a service.

Customer’s risk – to commit (pay) for a service he hasn’t fully tried yet. The longer the commitment the greater the risk.
Customer’s reward – if the client manages to overcome the risk, he will end up paying less per unit of service/ product. Generally speaking the longer the commitment the greater the reward (thus lower the cost for a unit of service/ product).

Seller’s risk – For sellers, the risk actually doubles. Firstly, converting a customer from a freemium model to a paid subscription is a serious friction point. Making the customer commit to a recurring payment, is another undeniable friction point. The more frequent that friction point the bigger the risk. Both cause substantial increases in the churn rate.
Seller’s reward – Lowering the cost per unit of service/ product ‘in-exchange’ for a longer commitment (reducing the frequency of payment friction) the seller reduces the operational overhead and customer churn significantly.

The sweet spot is where those properties converge into a single offering, appealing to all sides.

We will be focusing on economic commitments for a service/ product that require a recurring payment. In particular, online SaaS services.

Executing an economic commitment

Traditionally speaking, service providers and companies are able to obtain a level of commitment from their clientele by offering increasing discount rates for longer subscription periods (yearly vs. monthly subscription).
This sort of commitment constraints the client to more rigid terms, reducing it down to an exchange of goods for payment. Most SaaS services do so via online credit cards payments.

Crypto-based economic commitment

With the introduction of crypto assets, economical commitment can be redesigned and improved to extract greater monetary value for sellers and reduce the main fears for customers.

By staking a crypto asset, a customer expresses an economic commitment to service while still being able to sell the assets on the open market, when he chooses, and discontinue the service without incurring any ‘additional’ financial cost.
In this case, the customer’s fear is reduced to price volatility (in case of the asset decreases in value), as opposed to having to fulfill all payments until the end of the agreed upon period of time.

Reduced token velocity

The prevalent method in the industry, for describing a token’s “value” is using the exchange equation2 M*V = P*Q .

Detailed specifically by Vitalik Buterin for tokens as a medium of exchange3 .

Token velocity has an effect on token price.  Stabilizing velocity will reduce token price volatility.

  • ‘Too’ high velocity means that token holders are exchanging the token as fast as they receive it.
  • ‘Too’ low velocity means the token is not liquid at all.

By reducing velocity (in the form of staking) token holders, investors and all ecosystem participants benefit from a healthier token network.

Staking adjustment over time

As CDT price changes, in the long run, customers who already stake CDT and enjoy a discount on the services can find themselves with a much higher or much lower dollar value than their starting point. In this case, there are two scenarios to take into account:

If the dollar value of CDT drops significantly, the customer will be entitled to the same discount percentage, as long as he holds the exact same number of CDT he entered the commitment with.

Why it will work with Blox

Blox is designed to help businesses and professionals overcome day-to-day pain points when handling crypto assets, financing, and bookkeeping. Most of the issues are recurring and require constant attention, not temporary, one time solutions. It’s an ongoing necessity.
Blox is a service which companies will use for their entire duration in the blockchain space.

The more they use Blox, the more they will be inclined to stake CDT for a perpetual discount.

Pricing

Blox offers a total number of four tiers that users are able to choose from, ranging from solutions for professionals to Enterprise level, with the ability to customize plans for specific clientele, below are the current plans and their specifics.

  • Pro:
    Up to $50k AUM
    Up to 100 Free Tx storage space
  • Business:
    Up to 20M Assets under management (AUM)
    Up to 50k transactions
  • Enterprise:
    Up to 60M AUM
    Up to 150k transactions
  • Custom:
    We will work with you to tailor a plan to meet your needs

In conclusion

Introducing a sustainable, efficient and approved token model for CDT, we believe that the product, our users and the entire ecosystem around Blox, will benefit greatly. Not only from the use and direct effect it will have on their day-to-day operations handling crypto assets, but also from stability. Something that our industry is in dire need of.

Ready to stake with Blox?

Introducing Blox Staking, a new service offering non-custodial staking for Ethereum 2.0.
Visit us today to join our Beta waitlist!