On-going services

Many services are on-going engagements:

• there is a service provider
• a service consumer
• they transact over a period of time

For example phone carriers, email, or content hosting providers.

Subscriptions

Handling a payment incurs overhead eg transaction cost, latency.

On-going services are often packaged as subscriptions: a payment covers an aggregation of service eg for a month, or for 1TB of usage.

Billing

Typically a consumer pays for on-going service via:

• standing order
• auto-debit or direct debit
• provider holds excess consumer funds
• consumer pays in arrears

Free services?

Some services, particularly digital services, may use alternative business models for income.

• monetize instead via ads
• selling harvested user data
• start with loss leader and turn the screws hard once they have sufficient market capture

Requires Trust

The payment methods require trust.

Typically the consumer must trust the provider acts in good faith, and bills only the amount the consumer understands is owed.

A consumer may rely on the providers reputation to make that judgement.

Trust costs

• adds costs: bad actors and dispute resolution can cost either or both parties.
• stifles competition: consumers are reluctant to try new entrants with unknown reputation.

Hidden costs

Free things are nice, but the alt business models:

• Compromises privacy and/or degrades product experience
• Necessitates trust from the user to the provider - favors incumbents and centralization
• Fragile and/or degraded service provision

Wrong incentives

These are not in the longer term interest of consumers.

Trustless subscriptions

With trustless subscriptions either party can leave the engagement without leaving the other out-of-pocket.

Benefits

• Fair incentive structures. Billing is transparent.
• Minimize risk, minimize waste. Providers have complete confidence they will be paid what they are owed. Consumers know that won’t be charged more.
• Minimize barrier to entry -> maximize innovation. Consumers can try unknown providers with minimal risk.

Overhead?

Minimal.

Subbit.xyz

The integrity kernel of Subbit.xyz is “unidirectional two-party payment channels”.

This reflects the relationship of a consumer and a provider, with the consumer paying the provider.

How it works

• A provider integrates Subbit.xyz
• A consumer locks funds in an account
• Each request to the provider contains a code
• The provide may use the code to redeem the amount owed, no more
• When desired provider uses the latest code to redeem their dues

The Subbit.xyz comic!

In summary

There are services with consumers like Alice and providers like Bob

Alice and Bob can enter an agreement which is trustless: either party can walk away at any time without the other being out of pocket

Each request of service is bundled with a code to ensure Bob can claim from Alice what she owes and no more

Only a few actions are on-chain (setup, redemption, top-up, close, and drain)

All other actions are off-chain. This avoids issues of fees, latency, and congestion without compromising integrity

Tech components

Subbit.xyz is

• A Cardano smart contract providing the kernel of integrity
• A set of SDKs, docs, and examples to build on and integrate Subbit.xyz into services, existing and new
• An absolutely non-gatekeepy, optional marketplace to connect providers and subscribers

Market size

Cloud subscription market is estimated to be > 300B$

(This figure captures only services directly paid for)

Why not … ?

Use the L1:

• laggy: settling, rollbacks, and congestion would have degradation to QoS
• expensive: min transaction fee make micro-payments infeasible
• overhead: have to run cardano node

Use hydra/ other L2s:

• Requires much more infra to fit the use case Subbit.xyz is aimed at

Go2Market : Cardano

Crypto users need services and (should) care about decentralization

We have a decentralized set of service providers: SPOs

What’s missing is a way to ensure service provision is sustainably financed

A thriving ecosystem of sustainably financed decentralized services

Partners

Thank you 🙏

Any questions? Get in touch via github issues