Since inception, Dropil has aimed to be the company that delivered the highest level of user-friendly, intuitive, and powerful products serving the crypto community. For all of the amazing technology and innovation of crypto, it still lacks mainstream adoption, and this is where we see a need for Dropil. We are lowering the barrier of entry to crypto through releases of low-friction, intuitive, and beautiful products that just plain work. In this area Dropil has an impressively robust array of products and services already in development while feverishly polishing every released product to ensure our users have best-in-class features and usability.
When it comes to crypto and mainstream adoption, we also see trust as a major hurdle, and thus its importance to not only this company but the space as a whole cannot be overstated. We are excited to make several announcements that together are poised to make Dropil a stronger, more sustainable company, offering our customers the best possible value for a long time to come.
Announcing Partnership with Truwho
The following updates are all interrelated to a degree, and as a whole we are confident will elevate Dropil to the next level. Dropil will be instituting the use of unique user IDs which will be available for all Dropil users via a partnership with Truwho. While any user will be able to use the Dropil platform, those wanting to use Dex will need to complete ‘know your customer’ (KYC) verification with Truwho. This is being done in an effort to enhance the sustainability of the Dex service, to preemptively comply with future regulation, and to add further legitimacy to the brand – it is NOT being done in an effort to exclude users. We believe it is in the long term best interest of the brand and its user base to operate in a way that invites cooperation and acceptance with the regulations of various jurisdictions, and with requirements of other potential Dropil partners.
A peek into the future of the Dropil and Truwho collaboration: The inevitable necessity of KYC has been something the Dropil team has been investigating since prior to our launch, and we now feel like we have the best solution. We did not want Dropil to conduct KYC itself, and we did not want to outsource to a company if they didn’t have our customers’ best interests at heart or add value overall. Thus, Truwho came to be. As has always been our approach here, when something good enough doesn’t exist, rather than settle, build the best yourself. We built a team of directors and advisors to run a company that does KYC right, puts the customer first, and fills the specific needs of those in crypto. While Dropil’s utilization of Truwho is limited only to passing a unique user ID to prevent multiple registrations, Truwho itself boasts a wide offering of services and stands as a revolutionary company in its own right. As such, Truwho will be run as an entirely separate company operating independently from Dropil. As an entity registered in Malta, Truwho will both comply with, and benefit from, Malta’s comprehensive new crypto regulatory framework.
What Does Truwho Do?
We wanted to introduce you to the future partnership as it pertains to all of our Dropil users. A much more in-depth look at Truwho will be released soon, and the website (click here to visit) also offers more insight to the many offerings from Truwho such as a vault, TruID, single point verification for all current and future partners, revoke access hotkey, shareable validation profiles and much more. As a thank you for your continued support, all Dropil users that sign up for Truwho will receive a signup bonus in WHO tokens. Additionally, Dropil users will have a unique referral link for Truwho that also offers a better bonus than standard referrals.
Runs on Stellar Lumens
Another aspect of Truwho we are excited to announce is that it will be based on the Stellar Lumens network. We are a team of die-hard crypto advocates, and an important aspect of crypto’s future rests on the ability of companies to push the tech to greater heights and offer more utility to the mainstream consumer. We believe Stellar Lumens is one such company and we are happy to support their tech by basing the Truwho platform on it. Of course, the underlying network also carries a number of advantages such as lightning fast transfer times and low (almost zero) transaction fees. Truwho is happy to be an early adopter of XLM.
A known hurdle for Dex since inception was the possibility that the adoption and subsequent valuation of Drops would grow disproportionately fast as compared to other currencies it is pinned to. The combination of Dex and Truwho seeks to end this. The solution to ensure long term scalability and sustainability involves more accurately tying the value of Drops to its related currencies, however prior to the Truwho partnership implementing any such solution would have opened the platform to manipulation. Truwho addresses this risk by ensuring that no person can create infinite fake accounts for the purpose of gaming the system. When a person registers with Truwho they are assigned a unique number known as a TruID, going forward this TruID number will be required for account creation for Dropil users wanting to utilize Dex. Your Dex account will only require this number; your personal information will not be shared with Dropil. In a subsequent communication, we will provide the timeline for the implementation of the KYC process.
As mentioned, it was a known issue that the current method for valuation of Dex initial contribution, recontribution and payouts was not sustainable for the long term. We have explored many options to address such concerns and have decided on the following solution that we believe will best benefit our users and ensure the sustainability of Dropil for the long term.
Dex Current State of Recontributions
Currently, each capital recontribution to Dex is revalued (or in other words “reset”) at the beginning of each subsequent Dex cycle at the current $USD 24-hour average price of Drops. In the case of big upward movements in the price of Drops, users’ Dex $USD capital amounts over successive 15-day cycles could, in the aggregate, increase to a representative $USD amount much greater than the actual $USD value of the funds that Dex is using to trade with. The price of Drops is independent from the performance of Dex. Continuing to allow for valuations of Dex recontributions to be partly dependent upon the fluctuating value of Drops, rather than the actual funds with which Dex trades, may potentially lead to unsustainable outcomes for both the Dex service and the circulating supply of Drops. Basically since Drops are pinned to BTC price movements but for other purposes their value may be measured in USD, it is much easier for Drops to triple in $USD value than BTC, however since we dont sell Drops to fund Dex’s trading, the trading capital does not triple as quickly or as easily as the value of Drops may.
The updated Dex valuation methods will seek to ensure that the $USD value of funds being traded by Dex are kept closer to a 1:1 ratio with the $USD equivalent of capital deposited into the Dex user portal, thus ensuring the sustainability of Dex. This updated Dex valuation methodology will go into effect in the near future, following a later announcement from our team.
Examples of New Valuation Methods:
For the examples immediately below, we will assume that Drops are worth $1 per token and a user, John, has 100,000 Drops valued at $100,000. Let’s assume that each 15-day cycle results in a 4% profit on aggressive mode:
- John deposits his 100,000 Drops into Dex on aggressive mode and the system notes that he deposited 100,000 Drops worth $100,000 USD equivalent.
- At the end of the first 15-day cycle, Dex resulted in a 4% profit. Since John had $100,000 USD equivalent in Dex, he receives $4,000 (4%) worth of Drops. Drops are now worth $1.10, so he receives 3,636.36 Drops. His revalued capital in Dex is now $104,000 and he has 103,636.36 Drops (worth $114,000)
- At the end of the second 15-day cycle, Dex resulted in a 4% profit. Since John had $104,000 USD equivalent in Dex, he receives $4,160 (4%) worth of Drops. Drops are now worth $1.20, so he receives 3,466.67 Drops. His revalued capital in Dex is now $108,160 and he has 107,103.03 Drops (worth $128,523.64).
- At the end of the third 15-day cycle, Dex resulted in a 4% profit. Since John had $108,160 USD equivalent in Dex, he receives $4,326.40 (4%) worth of Drops. Drops are now worth $0.90, so he receives 4,807.11 Drops. His revalued capital in Dex is now $112,486.40 and he has 111,910.14 Drops (worth $100,719.13).
- This process continues over time. John’s capital in Dex increases based on the performance of Dex and remains independent of any price increase or decrease of Drops.
While the new valuation system fixes many issues, the possibility of manipulation of one’s Dex $USD capital amount arises. With the introduction of KYC and a set of rules, we are able to eliminate the possibility of such manipulation, further ensuring the sustainability of both the Dex service and the Dropil platform.
- The first level of security is implementing KYC amongst all Dex users. All users will be required to conduct KYC in order to continue using Dex. Once KYC verified, a user will have the ability to own 3 accounts on the Dex platform – one for each risk level. By only having one account per risk level, we are able to prevent users from transferring Drops out of their account and into a new account to lock in a new initial valuation of their Drops.
- When a user withdraws funds from Dex, the system will notate the number of Drops removed and the equivalent proportion of $USD value removed from the user’s Dex capital amount in that account. The values associated with each withdrawal will be locked for 90 days. The purpose of this is to prevent users from withdrawing funds from Dex and adding them back within a relatively short period of time, thus locking in a new initial value for those Drops. Scenarios/examples are presented below.
There are various scenarios that may occur and we will use John as an example to outline these scenarios. Each time a user withdraws from Dex, the following is noted:
- Date of withdrawal
- Number of Drops withdrawn
- $USD amount of Dex capital withdrawn
In all scenarios, John originally has 100,000 Drops / $100,000 USD capital deposited in Dex.
John withdraws all of his Drops from Dex ($100,000 USD equivalent).
A. John returns before 90 days have passed and deposits 100,000 Drops into Dex. Because 90 days have not passed, the 100,000 Drops are valued at the same $1 per Drop as when they were withdrawn. John now has 100,000 Drops / $100,000 USD capital deposited in Dex and his first cycle begins.
B. John returns before 90 days have passed and deposits 50,000 Drops into Dex. Because 90 days have not passed, the 50,000 Drops are valued at the same $1 per Drop as when they were withdrawn. John now has 50,000 Drops / $50,000 USD capital deposited in Dex and his first cycle begins
C. John returns before 90 days have passed and deposits 150,000 Drops into Dex. Because 90 days have not passed and he originally had 100,000 Drops valued at $100,000 in Dex when he withdrew, 100,000 / 150,000 Drops will be valued at $1 per Drop and the remaining 50,000 Drops will be valued at the current 24-hour average price. In this scenario, when he returns, Drops are now worth $1.50. John now has 100,000 ($100,000 USD @ $1 per Drop) Drops + 50,000 ($75,000 @ $1.50 per Drop) Drops for a total of 150,000 Drops / $175,000 USD capital deposited in Dex and his first cycle begins.
D. John returns after 90 days have passed and deposits 100,000 Drops into Dex. Because at least 90 days have passed, the Drops are valued at the current 24-hour average price. In this scenario, Drops are now worth $1.50. John now has 100,000 Drops / $150,000 USD capital deposited in Dex and his first cycle begins.
John withdraws 50,000 Drops from Dex ($50,000 USD Equivalent).
A. If John returns at any time prior to 90 days passing, any Drops deposited up to a maximum of 50,000 Drops will be valued at $1 per Drop. Any Drops deposited in excess of 50,000 will be valued at the current 24-hour average price.
B. If John returns at any time after 90 days have passed, any Drops deposited into Dex will be valued at the current 24-hour average price.
John adds an additional 100,000 Drops to Dex.
A. The additional 100,000 Drops added to Dex are valued at the current 24-hour average price. In this scenario, the current 24-hour average is $1.50. The $USD capital amount in Dex is now $100,000 + $150,000 = $250,000 USD and there are a total of 200,000 Drops in Dex
We anticipate that some users will not be willing to provide KYC. Users that don’t participate in the new KYC program will be able to maintain their current cycle, and all subsequent cycles and auto recontributions until the time when a cycle is quit. They will not be able to make additional contributions to these cycles, only the automated recontribution. These users will still have access to their Drops and all of the Dropil portals, however, they will not be able to start a new Dex profile or add to their current profile until they are KYC verified. Any services that Dropil offers that do not require KYC would be accessible to users that are not KYC verified.
The purpose of the updates to the Dex valuation methodology is to ensure fair and consistent valuation assessment and to support the sustainability of the Dropil platform for the long term. Understanding that small problems can potentially snowball into larger ones when left unchecked, the Dropil team is taking action at this early juncture to protect the best interests of both Dex users and the Dropil platform as a whole.
If you came here for the updated Roadmap, check out our updated Roadmap page: Click Here
Thank you for your continued support!