Missed the first part of this commentary article? Read it here.
Why We Aren’t Signing Up Just Yet
Increased cost on GorillaGo’s Minting Platform
To purchase more GO tokens to power your Gorilla Mobile data plans, more tokens can be minted via the online site of the token issuer – GorillaGo.
This is ideal for users who need more data than their plan can provide, and they can get more data by getting tokens on the decentralised app (dApp). But users should note that they would first need to set up a digital wallet such as Metamask or Fortmatic, then transfer cryptocurrencies or stablecoins into the wallet to purchase GO tokens.
More importantly, the minting process incurs extra cost for customers in the form of Ethereum transaction fees. This are fees deducted by the Ethereum blockchain to process and validate transactions, and are not included as part of the monthly subscription fees.
This brings us to the first issue of fluctuating costs. While Ethereum transaction fees are currently low, a look at transaction fees in the past few months have shown that it could go as high as 4x to 10x more per transaction.
Low data consumers may not be affected, but the cost for high data consumers could increase drastically if they are minting GO tokens regularly for data consumption. Plus, users need to pay another transaction fee for enabling other cryptocurrencies to be used on the site which further adds to the minting cost.
Secondly, there seems to be no way to cash back the tokens. While the platform allow users to swap their tokens for GO tokens, there is no option to swap the tokens back into cryptocurrencies. A quick scan of the Gorilla Mobile T&C only shows that users are only able to offset the subscription costs and not cash out the tokens.
Before we naysay the idea of cashing out GO tokens, other utility tokens have also allowed holders to exchange or trade them for cash value, such as:
The decentralised SAND utility token, which is used throughout the Ethereum-based metaverse The Sandbox where users can create, share, and monetize in-world assets
The utility token Filecoin, which allows users to buy and sell unused storage on a decentralized storage network.
These similar utility tokens can be traded on exchanges and used for monetary transactions within the decentralised platforms, and we believe GO token should too.
The GO Blockchain Protocol – Public or Private?
Going back to the basics, blockchain is a ledger of transactions that is certified and distributed across an entire network. While GorillaGo claims to be an open-source protocol that is permissionless, it behaves more like a closed blockchain with lack of open validators and governance.
It is a permissionless blockchain where anyone can join the blockchain network and can read, write, participate, or leave with a public blockchain. Public blockchains are decentralised, and anyone is able to be a validator of the network and participate in its governance.
Private blockchains place restrictions on who is allowed to engage in transactions, and only allow authorised entities to participate in a closed network.
An absence of public individuals being able to be validators on their network and holders of the token not being able to participate in any form of governance on the network leads us to believe the protocol is more centralised and closed off, which may mean a small group of participants control and maintain the network.
Private networks are not inherently wrong and do has its advantages. It allows for high efficiency and is scalable when expanding their infrastructure. But its centralised nature means it is more prone to security threats and other vulnerabilities.
While the protocol is marketed as open-sourced and permissionless, its lack of transparency about the system seems to suggest otherwise.