We are often asked how our products generate revenue, so for this article, we aim to better explain our intention as a business, and how our POWR tokens and Sparkz are used to create value for all participants of our world-leading platform.
Our objective as a company has always been an ideological one. Using our world-leading blockchain technology, we aim to provide low-cost, low-carbon renewable energy that is accessible to all.
When we started our TGE, our intention was to create access for people to participate in the proliferation of renewable energy assets by allowing them to purchase POWR tokens.
Our holdings of POWR provide a very real value opportunity for the business and the ongoing development as an incentive for the adoption of our products. We also charge a small fee per kilowatt hour (kWh) traded, which becomes Power Ledger’s revenue.
Remember, the purpose of the platform is to give trading a global reach and be accessible to as many people as possible, which translates to a high volume of users. This means our fee can be really small and give our company a solid income; allow Application Hosts to retain most of the value; and provide consumers with access to low-cost electricity.
“What we’re doing isn’t just leading the way in the energy space, it’s leading the way in a new sector of the investment community and the economy more generally, and with that, whether we like it or not, comes a level of scrutiny that we can either hide from or we can work with.
“As a business we’ve chosen to work with the scrutiny, work with the regulators and policy makers in order to pave the way for broader change, but it also means we have to be above reproach, we have to hold ourselves to higher standards.
“There’s nowhere to hide in the spotlight of scrutiny, but if we’re going to have the impact we aspire to there’s no point hiding in the shadows.” — Power Ledger Co-Founder and Managing Director David Martin.
As stated in our Whitepaper, POWR tokens allow an Application Host, for instance a utility company, and its customers to gain access to our P2P trading features and other Power Ledger applications.
To use services on our platform, each Application Host is required to purchase POWR tokens from the public market to exchange for Sparkz, which are then used to transact with participants in their local jurisdiction. These Sparkz tokens are issued against escrowed POWR tokens via a Smart Bond, and used by the Application Host to onboard its customers.
POWR tokens can be seen as the global token that opens access to the platform for all participants to utilize the system. Think of it as an access token, like a software license, that grants the ability for Application Hosts to transact on the platform, through trading POWR tokens for Sparkz. Sparkz are then used by prosumers and consumers to trade energy in kilowatt hours (kWh) between each other.
It is this transaction of electricity where Power Ledger takes a small fee, without inhibiting the value creation for either the Application Hosts, prosumers, or consumers. This means there are different ways our customers can quantify value from our product.
If we talk about retailers in particular, value is quantified through customer retention (people are less likely to move ‘off grid’ if they have access to cheaper energy) as well as a reduction in working capital and bad debt, which is particularly valuable to the retailer in a pre-pay revenue model.
The future of clean, cheap, distributed energy, is here.