A token-powered internet privacy project is launching in a matter of weeks.
Decentralized virtual private network (VPN) provider Orchid will debut its app, network and token (OXT) during the first week of December.
“The thing we’re most excited about now is to be launching one of the first really consumer-facing experiences where the use of this native token is essential for the operation of the application,” Orchid CEO Steven “Seven” Waterhouse said in an interview.
Users pay node operators for bandwidth using OXT tokens, which will be generated at launch. Additionally, the system relies on a staking model.
“Orchid is a bandwidth market where node providers stake tokens to advertise their services using the Ethereum blockchain,” the company wrote in a new white paper published this week.
Waterhouse said Orchid will have between five and 10 node providers at launch, including players from both the traditional VPN world and “new entrants from the crypto space.”
“Our intention with this initial group was to bootstrap the beginnings of the system,” Waterhouse said.
VPNs are used by millions worldwide to browse the internet anonymously and circumvent state controls over which sites can be accessed. The VPN space itself offers a stark reminder of the ills of centralized authority in the 21st century.
Orchid raised at least $48 million through a series of investment rounds and SAFT deals dating back to 2017. Major investors include Andreessen Horowitz, Blockchain Capital, Polychain Capital and VC giant Sequoia.
“We have known the Orchid team since 2014, and were a few of the earliest investors and advisors since the beginning of 2017,” Blockchain Capital managing partner Brad Stephens told CoinDesk. “Orchid has always been a stand-out project that perfectly illustrates the importance of decentralization. The areas of VPNs and secure communications need to be decentralized, thus supra-sovereign, in order to guarantee privacy from nation-state surveillance or interference.”
But challenges remain in driving wholesale adoption of token-based platforms.
A source in the investment community without any stake in Orchid told CoinDesk, “One of the major lessons learned from 2017-2019 was that utility tokens and proprietary payment tokens, like Orchid’s OXT, don’t provide a strong incentive to pull in millions of users, and without those users, they have a hard time capturing meaningful value.”
For his part, Waterhouse says the Orchid team has been building with real-world people in mind from Day 1.
“From the very beginning, we were focused on how do we build this consumer experience in the Web3 world,” he said.