Exploring the Galxe; Protocol Deep Dive
A protocol that powers on-chain credentials with plug and play NFT modules
Disclaimer: The following article is intended to provide an overview of some aspects of web3, a term that refers to the decentralised and distributed applications that run on blockchain technology. The article does not constitute investment advice, nor does it endorse or recommend any specific cryptocurrency, project, or platform. Cryptocurrencies are highly volatile and risky assets that may lose value rapidly and unpredictably. You should do your own research and consult a professional financial advisor before making any investment decisions involving cryptocurrencies. The information shared in this article is purely for educational purposes and does not reflect the opinions or views of the author or any affiliated organization.
How important are digital credentials?
Credentials are pieces of information that attest to your identity, reputation, skills, achievements, or behaviour. They can be anything from your passport number to your credit score, from your college degree to your GitHub contributions. Credentials are valuable because they help you access opportunities, resources, and services that match your profile and preferences.
However, credentials in the current web2 system are fragmented, siloed, and centralized. They are stored in different databases that are owned and controlled by various entities, such as governments, corporations, or institutions. This means that you don't have full ownership or control over your own credentials. You also have limited access to the credentials of others, which makes it hard to verify their authenticity or relevance.
How does web3 improve credentialing?
Web3 is a new paradigm for the internet that is decentralized and collaborative. Web3 enables users to own and control their own data, identity, and assets on the blockchain. Web3 also allows users to interact with each other in peer-to-peer networks, without intermediaries or gatekeepers.
One of the key innovations of web3 is the concept of non-fungible tokens (NFTs). In 2017, the NFT boom of PFPs and digital art paved a way for NFTs as a proof of concept for bigger things to come. They enabled users to own and monetize their digital identities, content and communities and introduced a new form of social currency and expression. NFTs have played a crucial role in the development of Web3 credentials - verifiable proofs of identity, skills, achievements, and contributions within the Web3 ecosystem. Projects like Galxe emerged from the NFT boom, and have leveraged NFTs to create impactful experiences with web3 credentials.
What is Galxe?
Galxe is a protocol that launched in 2021 that allows anyone to create, curate, and consume digital credentials in web3 – the current leader in the space. The protocol aims to build an open and collaborative credential data network that is accessible to all developers and users in web3. The protocol allows developers and brands to build important products to connect with their community. Galxe's network is decentralized and interoperable. Anyone can contribute credentials to the network using various data sources (subgraphs, snapshots or APIs). Anyone can also use credentials (as paying users) from the network for different applications, such as loyalty programs, voting systems, or credit scores.
Galxe has over 67 million users and more than 2100 partners, including some of the most prominent web3 projects such as Optimism, Polygon, Arbitrum, Yearn Finance, and Hashflow. Galxe has helped these projects grow their communities, engage their users, and reward their contributors with credential-based campaigns. Galxe is not only a platform for building web3 community, but also a platform for building web3 identity. Galxe’s mission is to ultimately create a protocol that helps Web3 developers and projects leverage credential data, in order to build better products and communities — all while rewarding the data curators.
How it Works
Galxe Network essentially has two main parts: the Galxe’s Credentials Network – an infrastructure that allows community members to curate and contribute digital credentials to the network and the Galxe’ Application Modules (which includes its Credential Oracle Engine and Credential API)- a module that enables users to utilise and interact with the credential data.
To use Galaxy Network, first someone curates and contributes credentials to the network (either on-chain or off-chain). Curators are rewarded whenever their credentials are used in Galxe’s Network Modules – which incentivises participation. Then, anyone can use Galaxy Network to run credential-based campaigns (paying users) based on the available sets of credentials in the network module.
Examples of use cases of the Galxe’s Application Modules include Galxe OATs (On-chain Achievement Tokens) – a digital record of the user’s achievements within an ecosystem, NFT loyalty programs, growth hacking campaigns, customised governance and many more – all through web3 credentialing.
Source: Galxe docs.
Key Features
Credential Data Network:
An infrastructure that helps developers and projects leverage digital credential data and NFTs to build better products and communities. Galxe's Credential Data Network is a collection of curated credentials that are sourced from both on-chain and off-chain data. Credentials are records of activities, reputation, and accomplishments that make up your digital identity. An interesting example of the credential set in the data network is a “Twitter Followed By” Credentials. Previously, this credential allows insights into the Twitter account’s followers, but now it allows projects to gain insight into who the Twitter account follows. For example, a project can reward all the accounts that Vitalik personally follows.
Other example credentials in Galxe's network include Uniswap LP, Galaxy Discord AMA Attendance, “Twitter Followed By” Credentials, Ethereum Smart Contract Deployer, Yearn Vault Staker and BSC MVP Recipient.
Application Module:
An infrastructure that allows developers to utilise and interact with credential data. Credential data are pre-configured and curated to serve specific and different functions, such as task-based giveaways for Learn to Earn models, targeted airdrops, growth hacking campaigns, gated communities, customised governance and many more. It is a set of tools and libraries for developers to create user-friendly and scalable web3 applications that can leverage the credential data network.
Galxe ID:
The team at Galxe summarises Galxe ID as a Web3 LinkedIn. It is a space where you can collect and display your digital credentials from different chains and wallets – representing a multichain/multiwallet identity. It is also a metaverse DID that allows developers to customize their products based on your credentials or enhance your user profiles. Galxe ID will soon be compatible with Galxe's partner network, creating more possibilities and opportunities in Web3.
Galxe OAT:
Galxe OAT is a new way to create and claim NFT badges that represent your achievements in life, both online and offline. It is a gas-less and lightweight solution for Web3 projects to better reward and engage with their communities. Available on both BNB Chain and Polygon, Galxe OATs are digital collectibles that record a Web3 explorer’s journey and achievements, on-chain and off-chain. Users can easily design and distribute NFT badges for your events and communities, and users can claim them with their email and a gas-less minting process. The badges are ERC-721 tokens on Polygon, compatible with OpenSea and other wallet apps. They are also stored on NFT Storage, ensuring their permanence and accessibility. Galxe OAT is not only for web3 projects, but also for real-world events and experiences that can be verified and showcased with NFTs.
Galxe Passport:
A product that was conceptualised after the introduction of Soulbound Tokens, Galxe Passport is a universal identity for users, it is a tokenized identity that stores user data encrypted and anonymously. Users can verify themselves on Galxe and claim their unique Soulbound Token, which serves as a proof of individuality and prevents Sybil attacks. Galxe Passport is a game-changer for web3 adoption and compliance. The team at Galxe is constantly adding new features to its products and have added a “Revoke Passport” feature which allows users to revoke and mint a new one after a 7-day wait period – pretty cool.
Some Interesting Use Cases
Growth Hacking Campaigns:
A popular solution to growth hacking used by users in Galxe are Membership-type campaigns. Using a seamless plug-and-play dashboard module, projects can leverage the solution to conduct NFT drops, giveaways and mystery box campaigns. A use case for this would be Gallery, a crypto-based social platform for NFT enthusiasts, to launch a successful campaign that minted over 4,800 membership cards in a week.
Gallery is a decentralized platform where users can curate, share, and connect over their love for NFTs and digital art. It aims to empower users with the tools and freedom to express their online identities and engage with like-minded people. Gallery launched in October 2021 and is currently in closed beta testing.
Galxe is a protocol that leverages NFTs as credentials to unlock web3 experiences. It allows platforms like Gallery to create and distribute membership cards that grant access to their beta website. Galxe also helps platforms identify and reward their most loyal and influential users with special perks and benefits.
Galxe approached Gallery with the idea of minting free membership cards for their super users, such as Meta Cowboy Level 5, Dr. Sol Holders, The Special Galaxy Girl NFT Holder #2, etc. These are users who have proven their passion and commitment to web3 by holding certain NFTs or achieving certain milestones. Galxe worked with Gallery from ideation to execution to help them retrieve the whitelist addresses of their super users.
The campaign was a success, with 4,807 NFTs minted in seven days. Most of them were claimed within the first 48 hours. This shows the high demand and excitement for Gallery's platform and Galxe's protocol.
Learn-to-Earn Campaigns:
Galxe partnered with Optimism, a Layer 2 scaling solution for Ethereum, to grow its ecosystem and educate its users in launching Optimism Quests. This is a 4-month learn-to-earn campaign where users can explore 18 different dApps on Optimism and earn NFTs by completing various tasks.
On top of a learning structure with informative tutorials and quizzes, participants were provided with the opportunity to experience the dApps! Through swapping, bridging, and more on-chain interaction, users were able to claim exclusive NFTs from all participating projects on Galxe.
The overall campaign resulted in a total of 3.4 million NFTs being minted. Dune reported that the Optimism Quests brought almost a 50% increase in all Optimism usage and the number of unique wallet addresses making transactions per day doubled from 11.65k to 25.13k. On top of that, there was a 50% increase in Optimism usage. The participating dApps also saw significant growth in user acquisition and retention. This shows the effectiveness of Learn-to-Earn to be a viable customer acquisition funnel for onboarding new users to web3 projects.
Loyalty programs:
Galxe has built a customised on-chain loyalty program with its Loyalty Point System. The program enables web3 community managers to create engaging campaigns with rewards and loyalty points. Users can complete tasks on and off-chain, and earn rewards such as Galxe OATs, NFTs, or other tokens. Galxe also provides a way to curate and access credential data from various sources, such as subgraphs, snapshots, Twitter, or Github. Galxe is building an open and collaborative credential data network for web3. A use case of this would be the launch of SPACE ID’s governance token, the ID token, which allows users to access various web3 domains such as .eth, .bnb, and .arb. SPACE ID has collaborated with Galxe to offer a second wave of ID token airdrops to Galxe users. The more Loyalty Points collected by the users, the more ID tokens they are likely to receive from the airdrop.
Key Numbers
As of the date of writing this, under the “Social” ranking of DappRadar, Galxe has the largest number of Unique Active Wallets (UAW) in the last month at 609.37k and $458.5k in volume. The trailing 7 days statistics show UAW at 163.73k and $301.12k in volume. High levels of activity during a bear-ish market today show some positive outlook for the protocol.
Additionally, as reported in the 2022 recap article by Galxe, the protocol has reported over 10,000 campaigns launched across 13 blockchains and 750k UAWs participating since its conception in 2021. The article mentions the popularity of the OATs as Galxe ranks 5th place at end of 2022 on the BNB Chain with over 1 million unique wallet addresses holding OATs and ranks number 1 on the Polygon chain with more than 6.7 million mints. The protocol reached a peak Monthly Active Users (MAUs) on Polygon in September at 450k and 500k on BNB Chain in October. The protocol also posts strong numbers on its socials with currently 803.8k followers on Twitter, 478.4k members on Discord and reported “millions” of Galxe ID users.
Tokenomics
Galxe launched its native token $GAL in February 2022 with a public Coinlist sale of 10 million $GAL. The initial token launch date for $GAL was 28 April 2022. The supply of $GAL is expected to be fully vested by April 2028. $GAL is currently trading at $1.69 USD with a market cap of $78 million USD.
The token allows token holders to participate in the decision-making process of the platform.
GAL has three main functions: governance, paying for fees, and curating credentials. Governance means that GAL holders can vote on the platform's parameters and use the funds in the Galxe Community Treasury. Paying for fees means that developers who want to access Galxe's credential data through various modules have to pay a platform fee in GAL, which is shared between the curators and the treasury. Curating credentials means that users can stake GAL on different credential data sets to signal their value and earn a share of the revenue generated by them. Holders of the credential stakes can buy and sell the rights to the revenue stream – this market dynamic intends to identify valuable credential data based on demand and supply of its revenue streams.
Galxe is an innovative and ambitious project that aims to empower web3 communities with verifiable credentials and rewards. By leveraging the power of NFTs and DAOs, Galxe is creating a new paradigm of web3 identity and social capital.
Galxe Ecosystem – As an investor/participant, where to play?
$GAL native tokens and network participation.
The main method of investing as an investor would be towards its native token $GAL. With reference from its tokenomics, investors in $GAL can expect value accrual from increased usage of the protocol from web3 projects. Pairing that with its deflationary mechanism and fixed supply of tokens, early investors may benefit from the Galxe ecosystem being the preferred credential network for web3.
Another way to play is to become a curator of digital credentials. Participants can provide and verify digital credentials from various sources. Curators are paid when their credentials are used by Galxe's applications, oracle engine, and API. On top of that, curators can utilise $GAL tokens to signal the value of credential data sets. These data sets have revenue streams that are shared among the stakeholders. Curators can buy and sell credential stakes from bonding curves, which adjust the price according to demand. This rewards curators for finding valuable data sets early and locking GAL in the curves. The curation system is still in development, but it has great potential for the web3 ecosystem.
What’s the Thesis?
The Galxe Protocol can be seen as a new way for web3 projects to integrate decentralised credentialing that enables growth hacking initiatives, governance structures, gamification of products/services and many more potential use cases. Think of it as a decentralised, open, merit-based SaaS protocol for decentralised applications. Galxe currently holds an advantage in that it is a market leader in the space of web3 credentialing – as SaaS is generally demand-sticky as top SaaS products gain most market share due to high switching costs.
Growth of the protocol would be determined by the growth of contributions of credentials to the Galaxy Credential Network and the demand of the available sets of credentials from the application modules by projects and communities. The incentivisation of curators to contribute would encourage Galxe to have richer data sets with engagement modules that improve in ease of use and efficiency – this would increase the demand by projects to utilise the resources in engaging their users. Through increased activity and usage of the protocol’s credentialing offerings, the protocol can attract new curators to the network, creating a flywheel effect that would grow the protocol.
Galxe is one of the pioneers in building a credential network and on-chain digital identity for web3. As web3 continues to evolve and more complex applications emerge, I believe that Galxe will play a key role in not only facilitating development but also enabling frontier marketing.
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