Quite frankly, I think Unlock Protocol is of the most qualified and impressive projects I have yet to come across, and I will be mentioning some of the reasons why in this write up. Their investors include Coinbase Ventures, Consensys Ventures, and many more of the top industry leaders.
It was founded by Julien Genestoux, a world renown software developer, speaker, and entrepreneur in 2018. Despite such big names backing it, the token is currently sitting under ten million dollar market cap at the time of this writing (circulating), because it is still so early in the stages of ongoing development.
Julien appears to be more focused on delivering the product and slowly decentralizing the Unlock Protocol, growing the network by on-boarding NFT artists and users making/trading locks, which I deeply admire.
However without any further discussion, I will now take a deep dive into the big connections and some subtle documents that were written by the founder of Unlock Protocol a few years back, which may just point towards a very interesting connection with Unlock and a multi-billion dollar company…
So, what is Unlock Protocol?
Put simply, Unlock Protocol is a platform built for memberships on the blockchain. It provides the ability for creators to add “locks” to their content or creations via a simple JavaScript snippet to their website.
It also offers a quick and easy user interface and web portal, with the option to create locks with malleable parameters for creators to explore with. This may consist of locks for tweets, music, or even all the way to things like tickets for concerts and sporting events.
With a simple integration and creation process, these locks can be utilized or plugged into your website, only allowing users who have the specific lock (or NFT) in their wallet to access the content.
Interestingly enough, this concept has already been implemented by a top financial site, which many of you may be familiar with called Forbes, for an ad free experience on the site.
Some other additionally notable content creators utilizing Unlock Protocol’s paywall include Scout, and Cami Russo from the The Defiant, a popular DeFi news outlet.
“As a creator, you want to monetize your work and ensure that only your members can access it. For this you should create a Lock. The lock is a smart contract deployed on the Ethereum blockchain which defines the terms of your membership. The Lock is yours and cannot be modified by anyone else, unless you grant them the permission.
The lock itself does not know about the content or features which it locks. The lock is also completely decoupled from your application, which means that it can be implemented in many different contexts: on the front-end, on the back-end, inside of chat applications, or even in other smart contracts.”
“As consumers, you want to easily unlock access to your favorite websites, or be part of communities. Unlock represents these memberships as Non Fungible Tokens. These tokens are directly linked to your Ethereum wallet. If you do not have a wallet, or do not care about owning one, you should consider our Unlock User accounts which make it trivial for anyone to unlock content with their credit cards.
We also built a keychain for consumers to easily view all of their memberships and use them. This involves cancelling them, transferring them or printing codes to assert ownership (very useful for tickets!)”
It is an evolved form of Patreon on the blockchain, which features unique referral tactics to incentivize users to use the platform and create a positive feedback loop powering the application.
Julien Genestoux, the founder of Unlock Protocol, argues that ads have proven to be an insufficient source of business for both companies and consumers alike. The solution, according to him, is a model that intrinsically rewards users who are the most active, all the while rewarding quality content providers.
“The web needs a new business model. A business model is generally how an organization generates revenues AND makes a profit. So far, the business model of the web has generally been to show ads to users in order to influence their choices. This is not working anymore because this model does not sustain creation, creates massive privacy concerns, incentivizes division and hate, or centralizes power in the hands of a few.”
“This lead us to believe that since “asking for someone else to pay” was a dangerous path, we could take look at a simpler approach: “asking the consumer to pay”. The next question becomes “how?”. On the web, most things that people consume have a marginal cost that tends toward 0. For example, I’ll have spent the time writing this post, whether 10,000 or 10,001 people read it. Similarly, whether you listen to 1,000 or 1,001 songs on a music streaming service does not make a difference, or whether you read 10 more messages a day on chat service has the same cost. The consequence of this is that, contrary to many things in the physical world, the web native way of paying is to gain access, or to unlock. You pay for the right to listen to music (1 or 10,000 songs), you pay to access all the stories behind a paywall, or to use features in a given application.”
His solution? Unlock Protocol’s token economic model, one that rewards participation within the network to a certain extent based on current usage of the platform.
“The benefit of this approach is that (at least for a fixed supply of tokens), the token’s value will increase with the actual network usage. We can use basic DCF to calculate how much each token is worth.”
“The most immediate criticism is that adding a fee to the network will slow down its growth. However, I think this is missing the point that it would then be in the best interest of any participant to own their relative share of activity on the network so that the amount of fees they pay is offset by the dividend they receive.”
In a world that is becoming ever more plagued with clickbait and journalists sacrificing quality of content for the unsuspecting user, an open protocol that serves to address this problem is clearly more needed than ever. This is where Unlock Protocol comes in.
It provides a universal resource for content creators to utilize on their own terms, without having to rely on a middleman or a third party application to use its services with aligned incentives.
Token Economics
Unlock Protocol’s token, called Unlock Discount Tokens ($UDT), serves as the governance token for the ecosystem. Token holders will help to decentralize the protocol and vote on critical upgrades. UDT tokens can also be used to get discounts on key purchases from content creators.
Behind the scenes, the UDT token is a powerful mechanism powering the protocol.
As explained by Julien Genestoux:
“Because Locks are the “nodes” in the Unlock network, sharing the same code and the same API, they can become a layer on which services can be built — services to perform discovery, recommendations, syndication, and even to build secondary memberships markets.”
“And what about the network effects that those gatekeeper platforms — the Netflixes, the Spotifys, the Googles, the Facebooks — use to create growth and guarantee attention? That’s achievable too. The protocol is, at its core, a web-centric protocol that will encourage and reward referrals. So once a user has unlocked something, the protocol can tell if she shared those links and whether that sharing results in other people getting keys to the same lock. As a reward, the protocol will grant her discount tokens so she can access more content at discounted prices.”
“This creates a strong network effect where the users who have unlocked content are incentivized to share the best content and convince new users to join the network. That’s good for creators, and good for consumers.”
From now on, the only way new Unlock Discount Tokens can be acquired is by using the protocol for key purchases. They will be used for voting on important protocol upgrades and users will receive dividends from the growth of the network.
As you may of remembered from earlier, tokens are rewarded to active participants of the protocol. However, it is very important to remember that the supply of the token will grow dependent on the the number of users making locks and monetizing their content.
The number of Unlock Discount Tokens minted per transaction on the platform (i.e. a user purchasing a lock) is capped at the cost of gas of the transaction on Ethereum.
As for how exactly the number of tokens minted per action on the platform, we can take a look at the networks statistics and make a few assumptions for the inflation rate of the token…
Here are the current analytics for the Unlock Protocol network displayed below:
The information above now allows us to assume a few things about Unlock Discount Tokens:
- the growth of the supply moves at a rate directly aligned to but slower than the growth of the network
- approximately 495 UDT have been minted via lock purchases amounting to 403 ETH in transacted volume
- UDT is harder to accumulate the larger the network grows
- UDT will be used to vote on various parameters of the protocol, and token holders will be responsible for contract upgrades
This information is additionally confirmed in their blog post announcing the launch of Unlock Discount Tokens:
“As of now, the Unlock and UDT contracts are upgradable using OpenZeppelin and “owned” by a Gnosis multisig wallets whose signers are Unlock employees. Our goal is to soon decentralize that mechanism so that upgrades can only be triggered by UDT holders, after a voting process through a DAO, where votes are weighted by UDT ownership!”
“The first upgrade that we will then submit will add a mechanism that lets UDT holders claim discounts on their key purchases!”
Where they continue, adding that:
“From now on, there is only a single way to create (and earn) new tokens: making key purchases. The number of tokens minted is based on the value of the purchase relative to the size of the overall network. This means that when the network is small, the number of tokens minted will be relatively larger than when the network is getting large. This rewards early adopters more!”
“It’s important to note that even though the supply of tokens will grow forever as the network grows, the growth of the supply will slow down forever as well, which means that it is much easier to accumulate tokens in the early days of the network than once it will be larger.”
The last point mentioned there is something I wanted to address a little further, though. To put this into perspective, the respective levels increasing the supply of the token would increase exponentially, if the levels were to keep going at all.
For example: Beginning with a TVL of 500 ETH, and token supply of 1M, it would take another 500 ETH exchanged on the platform to increase the supply to about 1.5M tokens. This effect decreases exponentially, meaning it would then take somewhere around 1600 ETH the next time only to increase the supply of the token by a total of 2x from 1M.
As you can see, the effects of inflation of the token will be little to nothing, and it adapts at a rate responsive to the current activity on the network at the given time. I think it is fair to say we can expect the supply of UDT to remain significantly below 10M tokens for quite some time, and possibly for even all of its existence.
Upon launch of the protocol on Ethereum, the Unlock team premined 1M UDT tokens to keep majority of control of contract upgrades at the hands of those currently working on development.
Currently, more than 90% of the total supply is owned by Unlock Inc, which will eventually transition into the Unlock DAO and treasury which is governed by token holders in the protocol.
Integrations & Use Cases
Now that we have a deeper understanding of what exactly Unlock Protocol is and what it is trying to create, let’s go over some of the interesting platforms built on top of the protocol.
The products listed below are just scratching the surface of what has been/can be created with the Unlock Protocol.
Locked.fyi is a decentralized blogging/messaging platform made possible by the smart contracts that make up Unlock. The notes posted here are hosted on IPFS, a distributed network of files on the blockchain. For that reason, what is posted here in immune to censorship, and will go on to live forever on the ETH blockchain and Interplanetary File System.
The code for Locked.fyi is open source and provided in Unlock’s Github, so any creator can easily replicate and build on top of it.
Something else very interesting about Unlock Protocol is the outright abundance of use it has already seen within the Ethereum community, despite still being so small in terms of market capitalization.
From the announcement of tickets:
“The Unlock Protocol isn’t just a way to pay to access services on the internet.”
“We’re building a protocol that can be used to unlock access to anything — and while that means content, software licenses and more, we also want to help people sell access things in the real world.”
“In the future, the Unlock Protocol may be used to sell tickets for transportation, as a way to seamlessly manage room access in hotels and holiday rentals, and as a way to prove you’ve paid for a membership. Today, we’re starting with events.”
Unlock tickets have already been used by thousands of people attending hackathons and other events hosted by ETHGlobal. ETHGlobal runs Ethereum hackathons all around the world for people to learn and practice their Ethereum coding skills.
According to Unlock Protocol, they have insisted on using the Ethereum powered tickets for all of their events! By adding user accounts to the tickets, Unlock delivers a great on-boarding experience!
Similar to existing services today for events, Unlock Protocol offers a variety of different parameters you can to configure to your liking, and you can track analytics of your keys via their keychain dashboard all without the need of untrustworthy third party providers.
3. WordPress
Unlock Protocol has created a simple plug in supported on Wordpress, a drag and drop style web development application, making it a whole lot easier to integrate the back end smart contracts of Unlock Protocol into your website or preferred location.
From Unlock themselves:
“The plugin provides you with “Blocks” which can be used in the Gutenberg Editor (WordPress 5.0 and later), for both posts and pages. We provide 3 different blocks:
- The locked block: a block whose content (rich text) is visible to non-members.
- The unlocked block: a block whose content (rich text) is visible only to members.
- The checkout button block: a block with a button to let you add a button for people to become members. This button will not be visible for members.”
Once your story includes all of the content you want it to, you can preview its content like any other WordPress post or page! It is a significant step forward for increasing adoption on the protocol.
The example image posted above is what a simple personal blog restricting access to only those with a certain lock (Non Fungible Token) connected to their Ethereum wallet looks like.
Configurable parameters include: duration of the lock, price of the lock, and even what currencies are accepted for purchasing the lock.
Integrating Unlock Protocol to your website takes a matter of seconds, only requiring a bit of manual work with some provided snippets of code, and you will have access to all of its features!
One of the more interesting and fun use cases of the Unlock Protocol, is a new integration with Discord that previously had not been possible. Using unique features from Unlock’s smart contracts, a developer was able to make a server whose roles (moderation) is determined and read by the wallet address of the user in question and which NFT or “lock” they hold.
For example: the owner of a Discord server could implement Unlock Protocol to the server, which grants administration privileges to members of the group based on the hierarchal token holdings.
6. Donations
Recently, Unlock Protocol introduced one of the newer concepts they had been working on for some time, called “Unlock Donations.” Like the name implies, it supports donations via their decentralized protocol, so users don’t have to rely on a third party provider or middleman to support their favorite projects!
More information from Unlock:
“Today, we’re excited to unveil our work on donations. In the last few years, it has become clear that the tech industry needs to have a deep reflection about Open Source: who works on it, how they are being paid, who supports them… Companies like OpenCollective have laid the groundwork by providing tools for open source developers to raise funds and organize their work. Earlier this year, Github introduced sponsorship support for repositories; letting maintainers show options to support them.”
Adding a subscription button to the homepage of your website (utilizing smart contracts from Unlock) is a very simple process, and your webpage will quickly become a full-fledged product for your project.
A Gitcoin grant created a month ago gives us a hint at what may be coming for Unlock in the next few weeks…
From the description of the grant:
“Mask offers a browser extension which lets users create encrypted tweets where the content of the tweet can only be “viewed” by other Twitter user if they use the Maskbook browser extension. These tweets can include text, but also images.”
“We are proposing an integration between Unlock and Mask where creators will be able to post encrypted Tweets and put them “behind” a lock, so that only members of the lock are able to view their content. If viewers are not members, then, Mask would offer the ability to Unlock these memberships. In that scenario, Mask is a referrer and should earn UDT.”
Pretty cool, don’t you think?
Because of the special way they were built, locks on Unlock Protocol have capabilities of a sponsored transaction, meaning anyone can submit it to the network for someone else.
More information on this concept:
“Locks have a pretty simple mechanism to “purchase” memberships, which has one handy characteristic: the sender of the transaction can specify the recipient of the membership. It means that someone can buy a key (membership) for themselves or, for someone else. We already use this mechanism for our credit card support, for example.”
“We created a new contract, called the Key Purchaser, whose sole purpose is to purchase keys to a specific lock. This contract enables recurring memberships!”
9. Paywall
Arguably the most compelling product offered by Unlock Protocol is its easy to use Paywall. Upon visiting a site utilizing the paywall feature from Unlock, you will be greeted with a prompt asking you to connect your Ethereum wallet to the site (this is so the protocol knows you should have access to the content behind the lock you want to view content of). Afterwards, previously locked content will then be viewable on the webpage!
Since beginning development last year, the Unlock paywall is now easily embeddable with many social networking platforms today, and with each update it gets even better.
10. Newsletters
Unlock newsletters, similar to the platform’s paywall, provides developers with a base foundation of code to build on top of and customize for their own purpose, utilizing the back end smart contracts of Unlock.
For the average user using Unlock, it is possible they wont even know it is on the blockchain in the first place.
Breadcrumbs
Now, for the fun part… Because I became very fascinated with Unlock the further I read into it, I actually ended up finding and piecing together some very notable pieces of information, that I don’t think you’ll want to miss.
Without further ado, let’s go over some of these revelations I happened to find in-depth below:
This rabbit hole of information started after taking a look at Julien’s work experience on his personal blog… Julien Genestoux is a is a world renown developer, entrepreneur, and angel investor. In 2016, he was “nominated by BusinessWeek as one of Europe’s Best Entrepreneur Below 25.”
Julien Genestoux conceived the WebSub protocol, which has been recommended by the W3C, the international standards body behind the World Wide Web. WebSub is the largest distributed publish-subscribe communication designed on the internet, and it is used by millions of developers every day.
Furthermore, Julien Genestoux previously founded Suprfeeder, a “feed API” that is built upon RSS and ATOM to make feeds more useful and real time. It allows users and applications to access updates to websites in a standardized, computer-readable format.
Investors in Suprfeeder included BetaWorks and Marc Cuban, along with many other big advisors and partners close to his work. Suprfeeder was eventually acquired by Medium.com in 2016, where Julien Genestoux then went on to work as a lead engineer as well.
So, we know that Julien Genestoux sold his company to Medium and began working for them a few years ago as a developer, but what exactly makes this so significant…?
Well, taking a look at his LinkedIn page under his section detailing his work at Medium, you’ll notice something very interesting…
From the Medium section of his LinkedIn page:
“Cryptocurrencies: researched and designed economic models to incentivize and reward positive usage of the platform.”
Sure sounds quite a bit like what he is building at Unlock Protocol, doesn’t it? This brings me to my point… Is it possible that Unlock was created by developers connected to Medium, a multi-billion dollar blogging platform, who were exploring the use cases of cryptocurrencies and how they could incentivize users to use their application?
Well, this would certainly make a lot of sense looking at the work history of Julien and his recent hire to the Unlock Protocol team, Ben Werdmuller, a lead engineer at Medium.com.
However… There is even more substantial evidence to back up the connections of Unlock Protocol and Medium.com, which are conveniently located on the founder’s personal blog.
“In a recent exploratory work that I did for Medium, I designed a token which would be attached to a dividend, paid in Ether…
We could easily add that an additional fee has to be paid to the contract itself (on top of the Ethereum miners). This fee is then collected in a shared bucket in the contract and each token holder can, at any point, withdraw that share of the dividend from the bucket.
The dividend would be paid from a tax captured on each token transaction.
The most immediate criticism is that adding a fee to the network will slow down growth. However, I think it is missing the point that it would then be in the best interest of any participant to own their relative share of activity on the network so that the amount of fees they pay is offset by the dividend they receive.”
If you recall, that sounds very familiar to Unlock Protocol’s model, which caps the amount of UDT minted per transaction at the cost of gas fees, meaning the fees are offset by the dividends they receive.
Do you think it is possible that there is a connection between this multi billion dollar blogging platform (Medium.com), and Unlock Protocol, a decentralized memberships protocol on Ethereum which was serendipitously built by some of the top developers working at Medium?
I’ll leave that to you to decide…
Recap
Just in case some of you aren’t following along, I will summarize the main points bringing me to these assumptions, as I know it is a lot of information to retain in one reading.
- Julien Genestoux makes WebSub, the largest distributed publish-subscribe protocol
- Julien Genestoux makes Suprfeeder with prominent investors including Marc Cuban and BetaWorks
- Julien Genestoux sells Suprfeeder to Medium.com in 2016, joins them for work as a lead software engineer
- Julien Genestoux describes creating a token for Medium.com that rewards users with dividends based on network activity
- Julien Genestoux creates Unlock Protocol, a decentralized platform built for memberships on Ethereum
- Coinbase, Consensys, Opera, and more notable cryptocurrency industry leaders invest in Unlock
- Julien Genestoux creates UDT, a token that rewards users based on network activity
- Forbes integrates Unlock Protocol’s locks for an ad-free experience on their site
- Ben Wedmurller, a top engineer at Medium.com is hired to work at Unlock Protocol
With this information, I’ll leave the rest of the assumptions for the reader to make, however I do not believe this information should go ignored…
Conclusion
Unlock Protocol is one of the most impressive and abundant platforms of unique use cases utilizing NFT technology on Ethereum I have ever seen. The protocol allows for creators to monetize their personal sites, music, sports events, and much more with a simple and easy integration on virtually any social media platform!
Creators can create locks and control the economy behind it, including malleable parameters like lock duration, lock price, and the total supply of the lock.
Consumers of this content can purchase the lock for individual content they want from their creators, and once purchased users can connect to a site with their Ethereum wallet, and instantly get access to locked content created on Unlock Protocol.
Already, the platform has seem significant support from investors in the space including Coinbase, Consensys, and Opera. Other individuals such as Brendan Eich, the founder of Mozilla, and Cami Russo of The Defiant have also publicly stated their support for the project and what Unlock Protocol is accomplishing.
It was created by a world renown developer who pioneered in creating a publish-subscribe technology called Suprfeeder, featuring prominent investors including Marc Cuban, that he later sold to Medium.com and began working for as a lead software engineer. During his time there, he described building a token to incentivize use on their platform, which sounds awfully similar to the way Unlock Protocol functions...
Despite all of the seemingly unbelievable information I have presented in this write up, the Unlock token is still sitting under a ten million market capitalization and has seen little attention from the general public (at least compared to what I think is deserved).
UNLOCK PROTOCOL LINKS:
WEBSITE: https://unlock-protocol.com
TWITTER: https://twitter.com/UnlockProtocol
GITHUB: https://github.com/unlock-protocol
DOCS: https://docs.unlock-protocol.com/
MEDIUM: https://medium.com/unlock-protocol
UNISWAP INFO: https://info.uniswap.org/token/0x90de74265a416e1393a450752175aed98fe11517
DEXTOOLS: https://www.dextools.io/app/uniswap/pair-explorer/0x9ca8aef2372c705d6848fdda3c1267a7f51267c1
This concludes my write up on Unlock Protocol… If you enjoyed it, please consider following me on all of my social channels for more in-depth write ups like this every day!
TWITTER: https://twitter.com/LoafEth/
MEDIUM: https://toasteth.medium.com/
