DeBox: An Integrated Social Platform Based on DID

What is DeBox?

DeBox is an integrated social platform based on DID (Decentralized Identity), constructed within the Ethereum ecosystem. It incorporates Layer2 and the Cosmos Inter-Blockchain Communication (IBC) protocol; its Box function is deployed on the Zks-era network (EVM) with dapp contracts.

It functions like a “Web3 version of WeChat,” supporting one-on-one or group chats. Additionally, it utilizes on-chain data and DID as thresholds for governing DAOs, and managing group assets, and is suitable for operating KOL fan groups with paid entry, offering functionalities similar to “Knowledge Planet.”

For example, as illustrated below, if you wish to join DeBox’s Worldcoin DAO, the platform will perform a status check to confirm if the assets associated with your wallet’s address (in this case, $WLD) are greater than zero.

Source: DeBox App

DeBox supports the creation of a new wallet or the import of an existing wallet’s private key. It also allows for logging in with wallets like MetaMask or Uniswap.

Background and Financing of the Development Team

Debox was founded by Blackiron in 2021, with Fang Kuai serving as the COO. The founders have not been doxxed (identified by real names); only the COO’s LinkedIn is public, displaying his previous work experience at humanDAO (a global decentralized autonomous community that integrates Play-to-Earn mechanics). The Debox management team has previous experience working at Alibaba, and the team is currently based in Singapore.

DeBox has completed five rounds of financing to date, being a primary investment portfolio of ABCDE Capital. It secured $2 million in a seed round on January 9, 2023; DWF Labs announced the completion of Debox’s strategic round of investment on January 19, 2024, followed by an announcement on March 8, 2024, by the DeBox team on Twitter, stating they had received strategic round investment from OKX Ventures. The amounts raised in the two strategic rounds have not been disclosed.

What Problem Does DeBox Solve?

Bots and scam phishing links are rampant in the crypto community.

X (Twitter) is open to everyone, but the comment sections of crypto-related accounts are always filled with a large number of phishing links (fake airdrops, opportunities to exploit, etc.), achieving deception by carefully altering handle names to blend in, as shown in the following image:

Source: X (Twitter)

To address this issue, DeBox has implemented a strategy that includes developing an identification algorithm and a set of community content governance principles to combat phishing links or spam.

Identification Algorithm

• If an account is muted by three or more groups, it could face a mute period of up to 30 days.

Governance Principles

• For public spaces like Explore/Square, online users who hold the platform’s NFT have the authority to quickly judge content that has been reported. If the content publisher disagrees, they can appeal, and the outcome of the appeal will be decided by a vote among all NFT holders. NFT holders who disagree with the majority will see a reduction in their governance weight.
• For groups specific to certain assets, previous WeChat groups required manual verification to confirm if members actually held the corresponding tokens or NFT assets. DeBox, however, uses DID identities and the assets in the wallet to determine eligibility to join specific groups. This not only increases the cost of malicious activity for bots but also ensures that group members meet the threshold for holder identity.

Source: App screenshot

DAO: On-Chain Governance and Treasury Assets

CyberConnect, a decentralized social network once launched the $CYBER token on Binance Launchpool, experienced a notable DAO governance controversy. On September 2, 2023, an emergency DAO proposal was introduced, hoping to “unlock tokens in the vault to balance cross-chain liquidity.” The proposal was overwhelmingly passed with 99.95% approval.

Source: Snapshot

However, it was soon noticed that there was a typo in the proposal: it would unlock 10.88 million tokens in one go, while the total circulating supply of $CYBER was only about 11 million tokens, which almost equated to the entire circulation, quickly causing panic and a crash in the token price. The project team of CyberConnect had to take an action that would be labeled as centralized: due to the data error, the team announced that it would not recognize the voting result and refused to implement the proposal. After this announcement, the token price finally saw a slight recovery. This incident also unveiled many current problems with on-chain DAO governance: Why would a proposal with only a 12-hour validity period be introduced? Why did one address out of the last 626 participating addresses account for 87% of the votes?

It was also after this statement that many users realized that the current state of DAO governance is still highly centralized; regardless of the voting outcome, the people who control the multi-signature of the treasury are the real ones who can govern community assets.

Facing such issues, DeBox proposed the following rules for DAOs: the treasury is co-managed by project builders and community MODs; community MODs are rotated from members within the DAO, not appointed by the project side, which to some extent ensures that assets are truly “governed in a decentralized manner.” However, perhaps because of this reason, DeBox currently has very few DAOs that have actually enabled the function of on-chain asset management. For some DAOs, even using the general group (Club) function is enough.

The main difference between DAOs and general groups lies in having an asset address and the additional function of proposals. Through proposals, participants can invoke on-chain contracts to automate the expenditure of group assets. Besides, all functions that DAOs have, such as red packets, voting, gifts, gatherings, etc., are also available in general groups.

Source: DeBox App

Ponzi Model: Improving FriendTech’s Box Feature with DeBox

The successful fair launches of BRC20 and $People indicate that this remains a very mainstream method of issuance. As long as the wealth creation effect is strong, Degens don’t really care about the specific method of participation. The recent Solana Meme craze, where token pre-sales were conducted by directly sending to addresses, demonstrates the high-risk behaviors traders are willing to engage in, and how easily social platforms can become the stage for token sales.

DeBox believes that the unsustainable aspect of FriendTech was due to the initially low price of Keys: “FT and many clones suffered because the early price of Keys was extremely low, allowing many bots and speculators to purchase a large number of Keys at a very cheap price and then sell them at a high price, taking away the liquidity pool.”

Therefore, they adopted a “pseudo pre-mint method” where each Box has a fixed floor price of 0.01 ETH, making the risk for users participating in the presale stage virtually zero. During the public sale stage, users can choose to sell at the current price for a profit. According to this model, the price cannot possibly fall below 0.01 ETH, ensuring that users participating in the presale stage can protect their investment. The only loss is the transaction fee. The transaction fee for Box trades is 10%, which is distributed between the creator, holder, and platform in a 21 ratio.

Source: DeBox Institute

On November 15, 2023, DeBox launched the Box feature, and the total amount of pre sales reached 2000 ETH three days later. However, the craze subsided quickly after half a month, with daily transaction volumes reaching as high as $10M.

Source: DappRadar

Currently, only 9 Boxes have a positive ROI (meaning people bought and held them after the presale stage). The most successful Boxes are in the form of community funds, for example, the top model involves group owners making strategic investments with every 0.5E of profit and then distributing dividends (DAO model). Others involve group members funding private chats with the group owner for C2C transactions, or attracting users to join the project by offering a 40% return on transaction fees, waiting for a future airdrop after DeBox issues its token. The remaining few Boxes operate similarly to FriendTech’s KOL management style.

Based on current observations, the reason for the low trading data of Boxes, apart from the decline in popularity, is that their moderately safe economic model fails to spark discussion and FOMO. For average retail investors, the proportion of those entering the market rashly after the safe presale stage is not high, and most of the Boxes are ultimately held by users who bought in at the floor price during the presale stage, thus stabilizing the coin price at 0.01 ETH. Currently, there are no Boxes in the presale stage.

Competitive Analysis: Comparing with Farcaster/Cyberconnect

Source: Dune, author-generated, competitive data comparison.

DeBox currently has a clear advantage in total registered users. However, because daily active users (DAU) data are off-chain, comparing it in real-time with competitors is impossible. A significant drawback of Cyberconnect is the excessive amount of data stored on-chain, leading to frequent friction. In contrast, DeBox has a clear strategy: high-value and finance-governance-related data are stored on-chain, while general social textual data are not. The following table illustrates DeBox’s differentiation.

Source: Author-generated, DeBox Function Classification

Farcaster is currently DeBox’s main competitor. Their method of increasing the cost of malicious bot activities is quite straightforward and brutal: charging $5 annually, with the protocol’s accumulated revenue now reaching $0.8 million. Warpcast is the most popular client of the Farcaster protocol, with functions much simpler than DeBox, offering only a Twitter-like feed interface. However, since the release of the Frames function, users can integrate voting, NFTs, RSS, or subscribe to newsletters, bringing a high degree of freedom and thus attracting a large number of new users and developers. Another strong point for Farcaster is the fondness of Vitalik Buterin himself, which has brought a wealth of high-quality content from Ethereum ecosystem developers to the platform.

Farcaster also features airdrop projects similar to degen. The main challenges DeBox currently faces are:

1. Compared to open-source protocols like Farcaster, developers have limited actions they can take with DeBox, with the better application being the news broadcast API Bot built by Denews, similar to Telegram Bot functionality.

2. Token airdrop expectations and platform NFT minting are currently managed by the officials. It remains to be seen whether Box can foster ecosystem projects that can drive traffic to DeBox in the future, attracting users with more airdrops or fair launches.

Future Plans and Conclusion

DeBox currently rewards developers and previously rewarded users for signing in and participating in activities by distributing vDBX. In the future, after the project issues its tokens, vDBX may be exchangeable at a certain ratio.

There is also a certain expectation of airdrops for holding NFTs, and the Box function is currently being used. The floor prices of several NFT projects successively sold on the DeBox platform are currently around 0.4-0.8 ETH, with the initial mint price ranging from 0.05 to 0.1 ETH.

Besides the timing of DeBox’s token issuance, OKX Ventures’ involvement in the strategic round was announced this year. The banner page of the DeBox App also highlighted the partnership, seemingly intending to use OKX as a portal for traffic influx, potentially leading to deeper collaboration in the future.