What is district0x (DNT)? Can the Web3 marketplace pique interest?

The district0x blockchain claims to rival web giants, but sluggish uptake is causing concern

Cartoon of people using smartphones                                 
The district0x network wants to empower communities and marketplaces through decentralisation – Photo: Shutterstock
                                

Contents

What is district0x (DNT)?

The district0x network, described in its whitepaper as a “cooperative marketplace of decentralised marketplaces and communities”, provides developers with the open-source blockchain foundations to create their own ‘districts’.

Built on Ethereum blockchain architecture, district0x hopes to establish a thriving community of marketplaces and organisations, free from the centralised economic models of Airbnb, Uber and other Web 2.0 applications.

Underpinning this marketplace ecosystem is the District Network Token (DNT), a native cryptocurrency intended to facilitate network governance.

There is a lot going on under the surface of the district0x platform. So how does district0x work and what is district0x coin used for? Join us for our district0x review below to find out.

district0x explained

How would an Airbnb killer theoretically operate as a district? Well, you know those pesky 14% service fees Airbnb’s directors pocket for every single booking transaction? The first benefit district0x (DNT) is that, since a district has no central governance, these fees would be impossible to implement.

But what about the fake reviews that are synonymous with Airbnb, Foursquare and the like? Since DNT is a governance token, only token holders have voting power within a district. This means that any star-rating system cannot be monetised.

The same concept could be applied to Uber, a company that has courted controversy in the past due to its unfair payment structures – 25% of all driver earnings go straight into Uber’s pockets. district0x envisions a decentralised digital world without a rent-seeking middleman, governed by the users themselves. 

While these examples are ambitious, districts could be deployed in a far more localised manner. A district for voting on council proposals? Maybe a local exchange for repair services with a payment system baked in? All are theoretically possible under district0x’s vision.

Of course, any new app needs to be completely user-friendly to succeed. Since district0x has yet to make its developer tools public, we are unable to determine how exactly an Uber-killer might look from its inception. Time will tell on this front.

district0x review: What stage is it at?

district0x has a long way to travel on its outlined roadmap, with only a handful of districts currently using the protocol. These are: Name Bazaar, a domain-name exchange; Meme Factory, for the creation and exchange of memes; and the Ethlance job market.

The fact that all three currently operating districts were outlined more than four years ago in the district0x whitepaper suggests little progress has been made since then.

This is because the company’s own district design and creative platform are still in development; any districts released prior to that must be done in coordination with district0x’s directors themselves. 

district0x claims to be open to product pitches, but with no new districts launched in more than four years, are district0x’s standards too high, or are budding developers failing to see potential in the platform?

There were 26 district proposals in 2021, according to official figures. But without new projects rolling out soon, district0x could very well test the patience of its community of backers. To be fair, this is an issue that also plagues other so-called Web3 platforms. 

Also, district0x is also not yet genuinely decentralised. Governance and decision-making are still at the hands of the owners. Governance is set to be handed over to token holders after the district tools are made available to the public, but a specific date has not been provided.

How does district0x (DNT) work? 

The ERC-20 District Network Token (DNT) is intended to be a governance token, meaning token holders are granted voting rights on the operation, branding, design, functionality and conduct of the blockchain it powers. This is done by ‘staking’ a pool of held tokens.

There are a few quirks to the system here. First, rewards aren’t baked into the tokenomics, meaning it is up to district creators to incentivise stakers accordingly. 

Secondly, districts are under no obligation to use DNT at all; any ERC-20 token will do. district0x’s creators believe that this will drive users to the platform, but it may very well hurt market capitalisation in return. The flagship district Ethlance is in fact powered by Ether (ETH).

The district0x voting rights will take on an additional layer. Token holders will have the power to vote on whether proposed districts should be allowed onto the network via the District Registry.

Remember, district0x is still not yet properly decentralised, so the DNT token is yet to reach its full intended power. Also, district creators have full autonomy over their district’s bylaws. Theoretically, a creator could create a digital dictatorship, whereby voting rights within a district are restricted to one or two key users.

What is district0x coin (DNT) used for?

A total of one billion DNT was initially minted, with 600 million distributed to fundraiser participants and 180 million held in liquidity.

At the time of writing, district0x (DNT) tokens can be purchased via a range of cryptocurrency markets. Keep reading below to have more features of district0x explained.

Under the hood of district0x

There are three main technologies working together to make district0x happen. Combined together, they form the ‘d0xINFRA’ open-source protocol.

Ethereum likely needs no introduction for most readers. But for the uninitiated, Ethereum allows for decentralised, tamper-proof payments via blockchain technology. Like hundreds of other innovations, district0x uses Ethereum’s open-source code to conduct decentralised finance (DeFi).

The InterPlanetary File system (IPFS) – which simultaneously sounds ultramodern and prosaic – is a decentralised file-sharing protocol. Essentially, it is what allows front-end users to swap and exchange data, be that a meme, job description or audio file.

Lastly, Aragon is a governance plug-in embedded into the district0x architecture that gives token-holding members voting rights within a district.

Put together, district0x is a good example of how various decentralised protocols are increasingly being stacked together to develop new blockchain solutions.

Web3: A new era of web democracy

In view of the democratic ideals and structure of the web, district0x considers itself to be part of the Web3 movement. But what is that exactly? 

Think back to the massive groundswell of Silicon Valley and Silicon Valley-influenced disruptors that entered the market over the past decade and a half. Uber, Airbnb, Spotify and others took the wind out of the sails of many established enterprises due to their low-cost, decentralised operational models.

Yet while these services are undoubtedly cheaper than their predecessors, the end-user doesn’t really get a piece of the profit pie, unless they are shareholders. In other words, services have become decentralised but profits have not.

Web3 may very well change that centralised profit model through the power of blockchain. In district0x’s case, it believes that digital marketplaces can be further decentralised, all the while keeping data private and empowering user-governance structures via blockchain tokenomics.

It is not the only start-up to attempt this in recent years – for example, Ardor’s multi-chain technology has similar intentions, but as with district0x, Ardor is struggling to attract engagement. Then there is DENT, which hopes its decentralised mobile-data marketplace can help break the telecoms monopoly.

The parlance used by these companies can be amusingly hubristic. For example, district0x positions itself as the new vanguard of global democracy, which has been 2,500 years in the making.

But without mass user uptake, these platforms are destined to fail. Customers do not expect a learning curve when interacting with a job site or data provider, so creating a seamless front-end experience is likely the next major hurdle.

Test case: Meme Factory

As one of district0x’s flagship districts, Meme Factory allows users to create, sell and exchange memes. Creators submit memes that are then voted into or out of the app by token holders (in this case, holders of the bespoke ERC-20 DANK token).

Monetising memes might sound like a delusion to some, given the ample supply flying around the internet. But given the explosion of the non-fungible token (NFT) industry, there’s no denying that money can be made from digital collectibles.

Some creators have managed to monetise their memes on Meme Factory, but few make a return. 

The next stage

What is district0x planning next? According to the roadmap, district0x hopes to deploy new districts to the network. This is of critical importance for the platform’s future if it hopes to retain and expand interest among its token holders.

The next major step is to deploy the design and creation platform. Following that, governance of the district0x project is intended to be handed over to token holders.

Until this final stage is executed, the district0x network cannot claim to be fully autonomous. Will district0x manage to reach this stage and fully realise its ambition? That remains to be seen.

FAQs

There is currently a circulating supply of 600 million DNT against a total supply of one billion, with 180 million reserved for future airdrops, 22 million for community rewards and the rest held by founders.

The district0x network was co-founded by Slovakian lead developer Matúš Lešťan, who is also the founder and lead developer of Ethlance, and American operations manager Joseph Urgo, who is also CEO of Sourcerers and was previously a support operations manager at Coinbase. They are based in Slovakia and Florida, respectively.

DNT tokens can be purchased at a range of cryptocurrency exchanges. If you want to buy district0x (DNT), you can do so via many crypto exchanges. You can either purchase it using fiat currency or by exchanging some of your cryptocurrency. Remember to be careful when investing in volatile crypto assets!

Further reading

The material provided on this website is for information purposes only and should not be regarded as investment research or investment advice. Any opinion that may be provided on this page is a subjective point of view of the author and does not constitute a recommendation by Currency Com Bel LLC or its partners. We do not make any endorsements or warranty on the accuracy or completeness of the information that is provided on this page. By relying on the information on this page, you acknowledge that you are acting knowingly and independently and that you accept all the risks involved.
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