Our Suggestions for P2P Tokenomics - June 2025

Building in Buy Pressure and Fostering Sustainability

Notes/Disclaimers

• We aren’t attempting to facilitate a moonshot with these suggestions; we’re only trying to solidify the coin’s fundamentals and create a more sustainable on-chain economy in order to maximise the impact of exchange listings, bull runs, etc.
• Dramatic price movements such as pumps and dumps are driven by speculative investors. These suggestions are intended to address the smaller day-to-day transactions which do not cause noticable price swings, but do make a cumulative long-term difference.
• We don’t have the ability to implement these ideas, and have no plans to introduce governance proposals. This is only intended as “food for thought,” which the community/team can do as they please with.

The Problem (As We See It)

Viral potential, exchange listings, and favourable macro conditions are the most important factors for positive price movement; but there are fundamental issues with the on-chain economy which should be addressed in order to ensure sustained buy/hold pressure.

As things stand, the sole major function of the P2P Coin within the Sentinel Ecosystem is serving as an outlet for selling by network contributors (like dVPN node hosts). Though it has a great amount of practical utility as a payment method for real-world products with substantial userbases, hundreds of thousands more users will be needed before those transactions could actually result in sustained buy pressure large enough to offset sales.

We’re not condemning providers who sell the coins they earn—that’s what they’re supposed to do. The issue is that there are very few on-chain mechanisms in place which encourage buying or holding. That disparity creates continuous low-level sell pressure which leaves P2P fundamentally unstable. “Rewards tokens” also rarely do well on the market.

A digital asset cannot just serve as a “stock” in a Web3 project, and we can’t expect P2P to do well just because it’s attached to a successful project. The coin must be valuable in its own right, and be deeply embedded in every facet of using or building on the blockchain.

There are a few potential solutions which we believe could rectify this. Some are our own, and others are actually ideas originally floated by the development team over the years.

Potential Solutions

• Hosting a dVPN Node should require a P2P deposit (amount TBD). This idea was proposed by the Sentinel Foundation in 2023-24 and is a solid one. Requiring deposits would simultaneously require some investment by providers, act as a filter for node quality, and take coins out of circulation.
• Because mining for Scout will soon be available as a casual passive income method for network contributors, the technical/financial requirements for hosting dVPN nodes can safely be elevated slightly.
• Creating an on-chain subscription plan should require a deposit and a Sentinel validator address (sentvaloper…). Much of what was written above about dVPN Node deposits applies to this; but it would also have the added effect of essentially bringing the whitelabeling process on-chain.
• All dVPN clients with curated node selections would need to create a validator. Though in theory their validator could stay in the inactive set and still create a plan, it would encourage developers to buy coins and solicit delegations in order to become active.
• Getting third-party dVPN teams aboard as validators should be a priority regardless. Developers should be engaged in the blockchain which is powering their applications and by extension its governance.
• dVPN node prices should be raised. With daily network users soon to surpass 100k and total applications on the network approaching a dozen, dVPN technology is now at a more comfortable stage where it’s not as necessary to offer dirt-cheap (or free) service in order to get people to try it.
• A one month subscription with most Sentinel apps is less than half the price of even the cheapest cVPNs. We have room to increase prices and still stay cheaper than cVPNs.
• Payment for dVPN service in non-P2P assets should be more expensive than P2P. This is not to discourage the use of other assets, but rather to emphasise P2P as the cheapest method to get the service (i.e. “Use P2P for a discount”). P2P must be the clear king within the on-chain economy.
• Free dVPN/Scout service should be provided to stakers. Now that the staking APY bonanza of 2021-22 is in the rear-view mirror, Sentinel needs new ways to encourage staking (and thus take coins out of circulation). The easiest way to do this is create in-app benefits for stakers, which could include free credits for dVPN service or Scout jobs if their staked balance is above a specific threshold.