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The Oxen ecosystem: Popular, crypto-powered products

The Oxen ecosystem: Popular, crypto-powered products

An update on the work we’ve done, the work we’re doing, and the work we’re planning.
23 September 2021Simon Harman

Even in the middle of another Melbourne lockdown, the lights are still on late at the Oxen labs. It looks a little different, with the team hammering away from their desks at home instead of our bustling office — but the feeling of energy and excitement is all the same. Recently, we’ve been spending a lot of time making specific plans for the future of Oxen. We’ve had lots to consider: oxUSD research, the development of Liblokinet, and Session’s exceptional growth. At its core, Oxen is a private blockchain. But over the years we’ve developed other projects and initiatives that live under the Oxen umbrella. So over the last few months we’ve been analysing which parts of the project are worth devoting more resources to, which ones will best serve Oxen, and devising development and marketing strategies for the medium-to-long term. 

We know that lots of you have poured your heart and soul into Oxen as well — and having you along for the ride makes all the hard work well worth it. With that in mind, we’re here to share the results of all our analysis and research with you — the community. 

The shining star: Session

Session has gone from strength to strength in 2021. All the work we’ve done since the Loki Messenger days have paid off, and we’ve seen user growth and retention increase over the last few months. Since January, Session has grown by over 470 per cent, and growth rates are still trending upwards. On top of that, feedback from our partners, users, and the community leads us to believe that Session is truly living up to its potential. There is no other messenger in the world like Session. It offers privacy and anonymity that tops everything else in the App Store, and that’s driving Session’s success in a world where privacy is becoming more and more important.

Our current prediction is that Session will surpass 1,000,000 active users next year. Once Session reaches user numbers in the 7 digits, it will be a familiar face not just among private messaging enthusiasts, but the wider tech community. This isn’t just good news for Session — it’ll also bring more attention to Oxen; initiatives like the official Oxen open group and Oxen branding placements within Session will get thousands of eyeballs on Oxen every day. 

A million users will put Session in the top echelon of blockchain apps. Only a handful of blockchain apps have ever approached that level of use, and all the apps with this scale of success are linked to some of the most well-known tokens in the entire industry. A million users makes Session one of the major players in web3, and one of the most used decentralised tools in the world.

Session also has a clear path toward monetisation. We’ve already spent time researching and designing monetisation models for Session. That has included preliminary market research, competitor comparisons, pricing research, and in-depth analysis of Session’s unique value as a private messenger. We’ve concluded that, taking Session’s user growth into account, the Session monetisation strategy is the absolute best way to support the $OXEN token economy right now

Behind every private messenger is a great decentralised ecosystem: Lokinet, Oxen, and service nodes

Our focus is on making Session the best, most compelling product it can possibly be. This will allow it to capture more value, and do a better job of supporting $OXEN. However, Session does not stand alone. There are other parts of the project which are critical to giving Session the advantages it needs to succeed. 

Low latency onion-routed voice calls are going to be a world-first for a mobile app. The Session community is eagerly anticipating call functionality, and we’ve got all hands on deck to deliver a robust and secure calling solution as quickly as possible. Once voice calls land in Session, we’re expecting an explosion in Session user growth — for that reason it’s our highest priority development and marketing goal. But...that’s not possible without Lokinet. An onion-routed voice call via Lokinet has less latency than a regular telephone call from Melbourne to Boston. It’s only with a supercharged onion router like Lokinet that voice calls on Session are possible — it’s so cutting edge we had to develop it ourselves. 

Of course, Lokinet’s low-latency is partly due to the purpose-built protocol, but it’s also dependent on the reliable, high-performing service node network. Without service nodes, Lokinet as we know it wouldn’t be possible. 

And, last but not least — the service node network wouldn’t be as reliable, powerful, or secure without $OXEN itself. Full circle. Each of the four main pillars of the project: Session, Lokinet, service nodes, and $OXEN. They all need each other, and the success of one is the success of all the others.

The Oxen ecosystem

Over the last three years, we’ve focused on building the best tech possible — and this ecosystem has emerged as a natural consequence of the success of each of these individual parts of the Oxen machine. 

Session supports $OXEN through monetisation. $OXEN supports service nodes through incentivisation. Service nodes support Lokinet (and Session) by providing infrastructure. And Lokinet supports Session by giving it groundbreaking features to attract new users. Together, it’s a well-oiled, automated, decentralised machine. Monetisation is also a part of Lokinet’s future, so it’ll join Session as a direct contributor to the success of $OXEN. 

Secondary Oxen ecosystem

This setup will secure a bright, ongoing future for Oxen as a project. We’ve always been privacy renegades — unsatisfied with the shortcomings of existing privacy tech, we’ve strived to build the most robust, complete, and usable privacy products in the world. As the existing ecosystem matures we’ll continue looking at new technologies and opportunities to grow Oxen’s mission of delivering digital privacy to the world. Our plan is to be a part of the privacy space for a long time. In the future, that’ll mean developing tech to solve privacy problems that we haven’t explored yet. But for now, we’re focusing on these four pillars: Session, Lokinet, service nodes, and $OXEN. 

For those of you who have been wondering: this means we’re putting oxUSD on the bench (for now). Unfortunately, oxUSD doesn’t slot into the current vision for Oxen. It would require an enormous investment of developer time — and our research showed that the pay-off for that investment would be strictly worse than devoting our attention to Session. Of course, we still recognise the need for a private stablecoin — so it’s something we’re going to leave on the shelf for later. 

By the numbers: Session monetisation supporting Oxen

Session is the biggest reason to buy, hold, and stake $OXEN. Whenever you’re talking to friends, family, or anonymous chat rooms about the potential of $OXEN — Session is the number one item on the list. Here’s why.

Our current economic model is inflationary: 11,880 $OXEN is created every day. Some burning occurs thanks to transaction fees and ONS purchases, but it’s not enough to effectively offset the inflation from the block reward. Even though the rate of inflation is decreasing, the reality of inflation is constant. 

Inflation over time

Session changes the equation. 

As Session surpasses 1,000,000 monthly active users, even modest subscription rates will contribute heavily to offsetting $OXEN emissions. A conservative 2 per cent conversion rate would result in 20,000 subscriptions, creating a monthly burn rate of 80,000 $OXEN with a subscription cost of 4 $OXEN/month. A 3 per cent conversion rate would mean a monthly burn rate of 120,000 $OXEN. As user numbers continue to increase, the entire Oxen emission could be offset through Session monetisation. (Not indicative of actual subscription costs)

Oxen emissions versus expected burn rate from Session monetisation

And emission offsets are only part of the economic effect. We anticipate most of the burnt $OXEN will first need to be bought off the market by the foundation, operating as a conduit between app store or fiat purchases and the $OXEN burning required for Session subscription. This will mean the foundation is constantly driving purchase demand for $OXEN and creating more liquid $OXEN markets. 

As Session continues to grow — the benefits of monetisation keep compounding. The value of $OXEN will be directly tied to speculation about the potential growth of Session, demand created by foundation buying, and scarcity caused by burning. Within the next couple of years, $OXEN may become one of the only cryptocurrencies in the world whose value isn’t driven purely by speculation. Although we’re making consistent progress towards these breakpoints—Session’s week-on-week percentage growth is excellent—it’s also entirely possible that one day you could wake up to see Session’s user numbers have exploded. Some of Session’s features—like onion-routed voice calls—have attracted the attention of key figures in the privacy space. Once those dominoes start to fall, Session’s numbers could get very big very quickly. 

And Session is just the first part of the puzzle. After that, Lokinet will be monetised too — and it’ll get the attention and resources that are benefiting Session right now. Lokinet will pile onto Session’s success, and Oxen’s token economy will grow stronger and stronger. After that — the ecosystem can keep growing, and we can build even more fully-fledged Oxen products.

It’s going to take time and dedication to realise this vision — so here are all the steps we’re going to take.

Roadmap: Session adoption, Session monetisation, Lokinet usability, future improvements

Over the last few weeks, our internal discussions have been centred around laying out a specific, achievable strategy for realising the potential of our project. Leadership from the operations, marketing, and technical teams have been hard at work connecting the research that has been conducted with the future actions of the team. Effectively focusing our energy on the right strategic tasks over the coming years is incredibly important to ensure the success of all of our products. This is a visualisation of the plan that has been discussed internally (with some of the spicy bits left out...for now 😉).

The Oxen roadmap

Team with the community, community with the team

Our community is incredibly important to Oxen. Having the support of the community going forward is extremely important. Of course, that doesn’t necessarily mean our way or the highway. As always, we invite all of you to discuss these plans with us in the Oxen Community Group on Session and the Telegram Oxen Community channel. This is a long-term plan with moving targets, so over the course of the coming weeks, months, and years — things can and will change. 

Having an open, respectful, and productive discourse is an important part of making the project better. We’ve been working night and day to make Oxen the best it can be. We live and breathe privacy, crypto, and community. Lots of us are active in community channels at all hours of the day, and we’re always happy to talk to you about your concerns (or alternatively, your excitement). 

Ox strong.

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