Sentinel's dVPN payment structure and subscription model
This article introduces the payment structure of Sentinel's dVPN, including bandwidth payment priced in Token/GB and subscription-based payment models.Author: Sentinel
Compiled by: ChainCatcher
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Currently, all bandwidth fees provided by dVPN nodes are priced in Token/GB. At present, two tokens for bandwidth payment have been enabled on the Sentinel hub, namely DVPN and DEC (Decentr). Any IBC token can be integrated for payment, and more tokens including stablecoins will soon be added to the IBC ecosystem.
Compared to subscription-based payment structures (which are adopted by almost all successful centralized commercial VPNs), the current payment structure of a fixed number of tokens per GB of data (from providers) is not user-friendly.
Currently, with the implementation of the latest chain upgrade, the minimum pricing for bandwidth is set at 100 dVPN per GB. This pricing can be modified through community-led proposals.
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Almost all commercial VPN applications use traditional subscription-based payment structures, offering users the benefit of unlimited bandwidth because organizations can utilize servers that provide unlimited bandwidth as VPN nodes. Unlike computing and storage resources that are always priced proportionally based on resource consumption, dedicated bandwidth lines can be obtained at a fixed price for high-speed unlimited bandwidth. In the case of providing unlimited bandwidth, the only option is to price product usage based on the duration of use, leading to a time-based subscription pricing structure.
The current user interaction process to connect to nodes is also cumbersome, requiring users to first lock a certain amount of dVPN tokens to the desired node to "subscribe to it" before they can connect to that node. The subscription-based payment structure does not require users to lock tokens or authenticate before connecting to nodes in the subscription model, which would be a less frictional process.
While subscription-based payment models may be more user-friendly, some may argue that pricing per GB of bandwidth may resemble an ideal free market system, potentially leading to a fairer pricing structure. Therefore, the per GB bandwidth pricing system will not be eliminated and will always be an option for dVPN node hosts to provide services to users (if these nodes are not in white label, they can always be accessed via the Sentinel CLI application).
Sentinel's new payment structure allows white label application owners to create "subscriptions," which are specific offers provided to users to obtain unlimited bandwidth from a set of nodes prepaid at a fixed price by the dVPN application owner.
dVPN white label application owners must determine the feasibility of reselling bandwidth proposals and must effectively price subscriptions to profit while remaining competitive with centralized VPN pricing. Even centralized VPN organizations engage in indirect bandwidth resale, as they seek to profit from the bandwidth provided to subscription users from cloud servers.
*This process represents a fully on-chain subscription process, with subscription payments made in the form of on-chain tokens. For subscription structures using a third-party payment gateway, the process differs.
Step 1. Register as a "Provider"
In this case, dVPN white label application owners are defined as "providers" and must first register as bandwidth providers by depositing 25k dVPN (the amount set by governance) to become on-chain providers.
sentinelhub tx vpn provider register <NAME> --- description <DESCRIPTION> --- identity <IDENTITY> --- website <WEBSITE> --- chain-id sentinelhub-2 --- gas-prices 0.1udvpn --- node https://rpc.sentinel.co:443 --- from <KEY>
Step 2. Define subscription parameters
Once the registration as a provider is complete, a subscription plan must be created, where the data usage in the subscription can be set to unlimited, and the exact price and validity of the subscription period must be defined.
sentinelhub tx vpn plan add <BYTES> <PRICE> <VALIDITY> --- chain-id sentinelhub-2 --- gas-prices 0.1udvpn --- node https://rpc.sentinel.co:443 --- from <KEY>
Step 3. Add dVPN nodes to the subscription product This command is still under development
Providers can manually add nodes to the subscription based on node addresses. This command will be updated later.
sentinelhub tx vpn plan node-add <PLAN_ID> <NODE_ADDRESS> --- chain-id sentinelhub-2 --- gas-prices 0.1udvpn --- node https://rpc.sentinel.co:443 --- from <KEY>
Step 4. User subscribes to a valid subscription plan
sentinelcli tx subscribe subscribe-to-plan <PLAN_ID> <DENOM> --- chain-id sentinelhub-2 --- gas-prices 0.1udvpn --- node https://rpc.sentinel.co:443 --- from <KEY>
*In the case of implementing a third-party payment gateway for subscription payments, different commands will be required to manually add users to the subscription whitelist after confirming off-chain payments.
Step 5. Subscription package user connects to dVPN node process
sentinelcli connect <SUBSCRIPTION_ID> <NODE_ADDRESS> --- chain-id sentinelhub-2 --- gas-prices 0.1udvpn --- node https://rpc.sentinel.co:443 --- from <KEY>
One of the most successful examples of Sentinel's true practicality is its ETH-based dVPN, which operated from 2018 to early 2021, boasting tens of thousands of active users and over 500,000 Android installations. However, while this free dVPN application did demonstrate the potential for the Sentinel ecosystem to penetrate mainstream user groups, this dVPN was indeed completely free and monetized in no way, leading to an unsustainable business model.
While the previous Sentinel free dVPN was not monetized, "free VPN" applications can profit from users in other ways rather than directly charging users for service fees. For example, dVPN applications can adopt methods such as using monetized video ads or other forms of marketing content to cover the costs of dVPN nodes without directly charging users.
Now, it is easy to provide free dVPN services in a decentralized manner through the "Add Quota" feature, which allows users to add other accounts to the subscription by providing bandwidth to the subscription. For specific use cases providing free dVPN services, providers can add the public account addresses and data usage limits of each user who creates an account in the free dVPN application to the whitelist account list of the subscription.
