Subscription models are everywhere these days. From Spotify to fitness gyms, it seems as if there is nothing that a business can’t turn into a subscription model. You can even get a monthly bacon subscription – please wait until the end of this article before signing up for this tasty monthly delivery!
This all goes to show, consumers love this new business model. Many members of the current generation are proving time and time again that they value experiences over ownership. So much so, that we may be in the midst of a new era itself, one where humanity sees the end of ownership all together.
At the same time, the rising price of Bitcoin, Ether, and other cryptocurrencies would soon garner increasing public interest in the crypto space, driving more and more demand for new and exciting projects.
The “chicken and the egg” issue of launching a project via ICO refers to the case when potentially good teams had to create native tokens, tie them to the core product, all in an effort to raise funds for product development. Without capital, projects would not be able to get off the ground. Without anything to show to the public, projects would have trouble raising capital.
While many projects may have found success raising capital via an ICO – many were later trapped with the painful reality that the issued tokens had no viable use cases. Dreams that a successful project would equate to a rising token price were soon met with the harsh reality that such ties were not as linear as initially expected.
And while many successful crypto projects continue today – it would not be surprising to see that this success had very little carryover into the relevant tokens that were issued to get those projects off the ground to begin with.
PARSIQ has previously faced such a situation, so I would like to tell how our team invented the solution, which can also be implemented for any other cryptocurrency project. The solution is called IQ Protocol.
How Did PARSIQ Start?
Most of the PARSIQ team are comprised of professional blockchain engineers who have built numerous blockchain systems and backends for crypto exchanges. In prior roles and projects, each of the team members faced the same issue – they had to build something to connect blockchain activity to centralized applications, devices, user-facing front-ends, legacy systems and other off-chain networks.
Realizing this, the PARSIQ team saw an opportunity to build a platform where absolutely anyone (coder or non-coder, individual, team or enterprise) could develop and deploy blockchain to off-chain connections with just a few clicks or a few lines of code.
In 2019, PRQ tokens went live through a regulated IEO on Coinmetro exchange. Initially, PRQ tokens were a part of the PARSIQ platform which co-existed with fiat payments for using it’s services. In other words, PARSIQ platform users could pay either via Stripe or PRQ.
There are hundreds of companies that have a very similar tokenomics model - having their tokens as means of payment or discount while taking fiat at the same time.
Under such models, this setup is flawed, as it disincentivizes an individual from holding the token to begin with. Why go through the extra step of acquiring a token to pay for services, when the services can be paid in fiat instead? Such an arrangement erodes any utility the token was initially designed to have, and ultimately leads to an overall lack of use or interest in the token. Most purchasers become speculators, hoping that an eventual rise in popularity of the project will translate into price appreciation for the related token.
PARSIQ Evolved, The Birth Of IQ Protocol
Since the beginning, PARSIQ had always envisioned being more than just a coding language for skilled individuals. Our company now has a user-friendly interface so that anyone (regardless of technical skillset) can find the PARSIQ monitoring solution useful and profitable for themselves.
Today, PARSIQ is continuing to push the boundaries with its innovations.
As of Q2 2021, the innovative side of the project is focused on:
- Scaling the monitoring suite of solutions for corporate usage;
- Building the next-generation subscription model for all SaaS companies in the world - the IQ Protocol.
Our approach is very different from traditional Layer 1 blockchains, such as Ethereum and Bitcoin. The creation of a universal bridge between the different ecosystems will catalyze broader adoption of blockchain technology.
We have been working with a lot of cryptocurrency projects, and at times, helping to mitigate hacks and forking impacted tokens. Many companies have also come to us asking to help them build a proper token economy model, taking into account their exciting products and services.
In December 2020, Anatoly Ressin, PARSIQ’s Chief Blockchain Architect held an AMA demonstrating how our proposed IQ Protocol solution would work within the PARSIQ ecosystem. The idea was to align the interests of all of the tokenholders for PRQ - hodlers and traders - with the interests of our utility users.
PARSIQ Became The First Tokenized SaaS Business
PARSIQ was the first ‘client’ to IQ Protocol for utilizing this DeFi framework in order to build a transparent and risk-free economy model for its tokens and the platform.
Our team has devised a blockchain agnostic solution for implementing subscriptions on-chain in a flexible and cheap manner. This has been done all while preserving the all important workflows such as cancel/refund policies, different time-frame considerations, consumption rate quotas, discounts, and more. This was accomplished through the introduction of a concept utilizing PowerTokens. PowerTokens are not used as a means of payment, but rather, as a deterministic over-time “energy” generator. Within IQ, energy plays a role in accounting for the unit of service consumption (like gas units in Ethereum).
Solving the common crypto “token not needed” problem, we have become the first enterprise to transform the traditional subscription model using IQ Protocol. As of today, every PARSIQ user can use the platform and build monitoring solutions simply by holding PRQ tokens as a method of payment.
IQ Protocol helps companies build a circular economy and take into account the interests of the main shareholder groups: HODLers, service users, and traders. Under IQ, the new PARSIQ subscription model works as follows:
- Platform users, mainly businesses, pay for the service by holding special PRQ tokens. Consumers have two options: either buy the original tokens that have life-time value, or rent PRQ tokens from the renting pool. The main idea here is that the original tokens are not released from the renting pool. Instead, the pool mints an expirable version of these tokens.
- Lenders can loan their PRQ into the IQ Protocol and start earning yield. If a person lends his PRQ to the pool, he will be issued iPRQ (interest PRQ) as proof that he has placed PRQ into the pool. As the name suggests, the lender earns an interest on his PRQ when PARSIQ customer borrows them from the pool.
IQ Protocol Provides Existing Tokens Utility For Any Project
Fixing a broken economy is not for the faint of heart, after all, full careers have been built around such monumental tasks – understanding everything from borrowing and lending, to national and global consumption in the consideration of setting various economic policies.
However, in the context of token economies, PARSIQ, and our IQ Protocol, has created the ultimate “plug and play” tokenomics model. This solution, which is industry and blockchain agnostic, lays out the framework to provide instant utility to existing and/or planned tokens.
IQ Protocol is a risk-free, collateral-less solution to tokenize subscriptions. Effectively, any product or service sold by a project can be turned into a subscription – where access to that solution is controlled via the project’s token.
Under this protocol, we have completely reimagined how the subscription model is executed, and have also introduced a new dimension in terms of how businesses can operate.
How To Utilize IQ Protocol For A Project
Businesses utilizing IQ will first need to look at their product portfolio to understand how such solutions can be turned into a subscription model.
Once the business has defined what the token can represent, the product can then be tied to the token, giving the token holder the rights and privileges that have been assigned to that token as defined by the business. Tokens are then assigned a lifetime value – which determines how much and how long the token holder has access to the products and services for while holding that token.
IQ Protocol also takes an innovative approach to token utility through the introduction of Power Tokens. Unlike conventional utility tokens which represent a fixed amount of utility, Power Tokens generate utility over time. Therefore, holders of Power Tokens "subscribe" to utility rather than possessing a fixed quantity.
For example, the conventional "tomato token" would represent rights to collect 1 kg of tomatoes, whereas a Power "tomato token" (with weekly flow and expiry in 1 year) would represent a right to collect 1 kg of tomatoes per week for a year.
Power Tokens are housed in a "Power Enterprise" - a series of smart contracts which aggregate several IQ Protocol features, including governance, funding, and the ability to mint new Power Tokens.
IQ also introduces a concept known as the renting pool – which ultimately allows consumers to rent tokens from token holders versus holding them outright.
The Next Steps
Currently, our team is now investigating another great use case for IQ Protocol - NFT renting.
Using IQ renting pools, projects could build their own marketplaces for trustless, decentralized, risk-free, collateral-less renting of NFTs. This is suitable for any type of NFT token and creates new utility for collectibles or in-game NFTs, as an example.
NFT owners can earn passive income from renting their NFTs, assured by knowing it’s absolutely risk-free and time-estimated.
Users can rent expirable versions of these NFTs by paying a fee for a trial period or in order to get the benefit immediately without buying the asset, like renting a unique powerful weapon (or other in-game assets) to defeat an opponent in-game.