Subscription businesses are everywhere. They're great because the business is guaranteed revenue if they can retain users. Web3 platforms can utilise subscription models. Users benefit from additional flexibility and ownership.
Let's consider a hypothetical platform called Paper that connects users to publishers like Medium.
Access via tokens
Users must own tokens to access the product.
To access Paper, users must own $10 worth of $PAPER. This is similar to the subscription fee you pay at web2 companies like Medium.
Burning the token
Tokens are burnt at regular intervals.
For each user, Paper burns $10 worth of $PAPER every month. If they didn’t, it wouldn’t be a subscription business. As long as the value of the token was constant, you could buy $10 worth of $PAPER and gain access for life.
So why tokens?
Tokenised subscription models offer advantages over standard subscription payments:
- Ownership: tokens enable users to subscribe and own. I could buy $100 worth of $PAPER tokens. Aside from access for 10 months, the tokens appreciate in value as the platform grows.
- Flexibility: tokenised subscriptions prevent user lock in. If Paper is not working for me, I can sell by $PAPER tokens to a different user. Of course, I need to find a buyer but at least the option exists.
- Contribute: ownership of tokens allows users to contribute to the platform. Depending on the type of token they own, they may be able to vote on proposals and contribute to decisions.