Summary
- Privacy has become a hot topic in recent years.
- Oxen is a blockchain supporting a privacy ecosystem of apps.
- It has a working private messenger app, Session.
- It provides an onion router for internet usage, Lokinet.
- It also supports instant, private payments.
- Developers can build privacy apps on Oxen, including ones with high-bandwidth requirements.
- Oxen is little-known and has significant room to grow.
| Symbol | OXEN | Circulating Supply (estimated) | 58,420,677 |
| Rank (MCAP) | #574 | Total Supply | Infinite; inflationary or deflationary depending on burn amounts |
| Price (03/15/22) | US$0.4295 | Market Capitalization | US$25,092,714 |
Complete historical OXEN price chart. Source: CoinGecko
In this report, we’ll answer:
- How does the Oxen blockchain work?
- What are Oxenâs working products, and how do they measure up to their competitors?
- How could OXEN tokens become more valuable, and how can you profit from holding them?
What is Oxen?
Oxen is a decentralized, proof-of-stake (PoS) blockchain network powering the Oxen ecosystem. Itâs also a developer platform for privacy-focused decentralized web services and tools.
Its vision is to bring privacy to everyday use cases. These include instant messengers, social media, and web browsers.
Illustration of OXENâs network. Source: “WTF Is Oxen?” on Oxen’s Medium
The Oxen ecosystem has three major products
Illustration of OXENâs current ecosystem. Source: The Oxen ecosystem: Popular, crypto-powered products
Oxen – a privacy blockchain and staking, rewards, and transaction token
Pulse is Oxen’s name for its PoS scheme. PoS reduces energy costs and increases speed vs. proof-of-work (PoW) networks.
OXEN holders can stake their tokens to create service nodes. These nodes power the network and receive OXEN tokens as a reward.
It’s also a privacy token. Oxen’s Blink technology lets users make instant payments to each other.
In many ways, the token is like Monero (XMR). Oxen started as a fork of XMR. It inherited XMR’s privacy and security features, such as:
- Stealth addresses
- Ring confidential transactions
- Ring signatures
Developers can build apps using the Oxen blockchain’s tools. For example, developers could use Oxen to construct a private Instagram or Discord.
Session: a privacy-focused messenger
Session is Oxenâs instant messenger, like Telegram or WhatsApp. It’s useful for messaging, notification, and other communication services requiring privacy.
You can use it on desktop or mobile devices.
It’s anonymous and encrypted. Most messengers leak metadata, which can be sold or tracked. Session minimizes this leakage to give privacy to users.
In April 2022, it released a beta feature that includes voice and video calls.
Lokinet: an onion router for anonymous internet usage
Lokinet is an Onion router that helps you to use the internet without being traced. Itâs like Tor or I2P, with some key advantages:
- Itâs resistant to some attacks and security problems that could compromise Tor or I2P
- It supports high-bandwidth content like voice calls, video and streaming.
Oxen released a Lokinet library, âliblokinet.â This library enables other developers to integrate their applications, including mobile, with Lokinet.
Who’s behind Oxen?
Oxen’s roots are in late 2017. It was first called the “Loki Project.” This part-time passion project started between a group of Australian cryptocurrency enthusiasts.
In January 2021, Loki Project rebranded to Oxen. This rebrand made its framework easier for developers to understand. It also connects the platform’s products and features.
Now, the Oxen Privacy Tech Foundation (OPTF) runs Oxen. The foundation’s headquarters are in Melbourne, Australia. It uses community developers spread across the world.
Oxen’s board of directors has a strong vision and delivered working products:
- CEO Simon Harman is a co-founder who has led Oxen’s strategic direction since 2017.
- COO Chris McCabe is a co-founder who manages Oxen’s daily operations.
- Secretary Christopher Pavlesic is a co-founder and the CEO of Coinstop.
- Full-time developer Jason Rhinelander has a background in economics and computer science.
- Cryptography advisor John Pacific is a founding engineer at NuCypher.
The board’s members form a well-rounded team from many sectors, including:
- A professor of economics at RMIT University
- The CEO of Prismatik
- A law firm partner
- A whistleblower advocate
- An Australian Taxation Office veteran
- A communications expert
- A privacy advocate
How are Oxen’s tokens distributed, released, and burned?
Initial distribution
Oxen began as the Loki Project. Loki distributed its tokens in 2017 through a pre-mine and private sale in 2018. All vested tokens are now unlocked.
Current distribution
Now, distribution happens by rewarding service nodes with OXEN tokens. These nodes power the Oxen network. The rewards result in the creation of 11,880 OXEN each day.
The OPTF also receives 9,240 OXEN every seven days. OPTF pays for marketing, community projects, and development with these tokens.
Burning, staking, and an infinite supply
Oxen has an infinite supply. On the surface, this might concern investors worried about runaway inflation. A constant increase in supply pressures the price to drop.
Yet, burning keeps OXEN’s infinite supply cap in check. This mechanism means that supply doesn’t have to increase forever.
If burns reach a high enough level, the token can become deflationary. It’s easier for a deflationary token’s price to increase.
Blink transactions, Oxen’s instant payments, burn 60% of their transaction fee. Purchasing a Lokinet address (ONS) also burns OXEN.
Oxen’s upcoming service monetization will create more ways to burn OXEN. Developers building apps on Oxen will also increase the token’s burns.
More adoption burns more tokens. More burning lowers OXEN’s supply and encourages higher token prices.
At the time of writing, Oxen has burned over 719,303 OXEN. You can track the total amount burned at the Oxen Blockchain Explorer.
There are also strong incentives to remove OXEN tokens from the circulating supply. This removal decreases sell pressure, helping the price to increase.
For example, you must stake 15,000 OXEN tokens to create a service node. Service node rewards encourage people to stake, which removes OXEN from circulation.
Why could Oxen be valuable in the future?
Oxen capitalizes on the privacy narrative
Privacy is becoming a more significant concern for the average person. Censorship is affecting many people. Corporations are selling your data as a commodity.
Privacy-focused apps minimize these problems. Yet, getting privacy often costs three things:
- Time: many privacy solutions are inconvenient or slow to use. For example, it’s fast and easy to open your web browser and use the internet. It’s slower and more complicated to use something like Tor.
- Money: privacy solutions often come with a cost. For example, most virtual private networks (VPNs) for anonymous internet usage charge fees. On top of that, they don’t always guarantee privacy.
- Social currency: many privacy solutions have fewer users. For example, a privacy-focused Twitter alternative would have less traffic, decreasing your reach.
Oxen helps reduce these costs. It gives developers a base to build fast, usable, and inexpensive privacy solutions.
- Oxen supports higher bandwidths. These speeds let developers create privacy apps with features we take for granted. For example, apps can support voice calls, video, and streaming.
- Low fees make it cheap or free to use Oxen applications. You could even make money by holding OXEN or staking it.
- Essential features (like high bandwidth) encourage users to use the ecosystem. Having more users means you don’t have to compromise reach.
- A simple setup process makes it easy for people to take advantage of privacy apps. For example, starting with Session is as easy as installing any other mobile app.
Oxen has significant advantages over other onion-routing solutions
There are other onion networks today, such as Tor and I2P. These provide some amount of privacy when online, but Oxen has advantages.
Basics of onion networks
You’ll need to understand the basics of an onion network to see Oxen’s advantages.
If you connect to a website or service, they can see your IP address and other metadata. This data lets governments, corporations, and others find your identity and activity.
An onion network gives privacy by routing web requests through many other nodes. These nodes don’t know where the original request started. They only know which node forwarded the request to them. This disconnect means that nobody can trace your request back to you.
Tor and I2P both use this structure. Yet, the way that they implemented it has vulnerabilities and lacks some features.
Oxen solves Tor’s centralization problem
Tor relies on Directory Authorities (DAs). These are volunteer-operated centralized servers that power the network.
Unfortunately, this centralization makes Tor vulnerable to an attack. If a government shuts down some of these servers, the network becomes unstable.
On top of that, the US government developed Tor. This involvement might make some users wary.
Oxen solves these problems by using service nodes instead of centralized servers. It was also developed and operated by the community.
Oxen reduces I2P’s performance, reliability, and access problems
I2P’s structure can cause the network to become unreliable when its nodes get out of sync. Oxen avoids this problem by using blockchain staking to keep its network in sync.
Oxen supports higher speeds than I2P. Every client connected to I2P becomes a node. These clients bottleneck I2P’s network to the speed of the slowest node. In contrast, Oxen has minimum requirements for service nodes. These requirements keep underperforming nodes from slowing its network.
Many users want to use the whole internet. I2P doesn’t formally support this – it only allows browsing its internal network. Oxen’s exit nodes allow users to access the entire internet.
Oxen offers higher speeds, allowing everyday features
Tor only supports connections over transmission control protocol (TCP). I2P, as mentioned, can suffer from slow speeds.
These eliminate features we take for granted, like video, voice, and streaming.
Oxen supports all IP-based protocols. Its dedicated, high-performing service nodes increase the network’s speed compared to competitors.
Supporting more protocols with higher speed enables standard high-bandwidth features. This encourages users to use Oxen. More users increases burning, which helps the price to rise.
Oxen is more resistant to some attacks
Fewer vulnerabilities encourage developers to build and users to adopt Oxen’s ecosystem. A larger ecosystem and more adoption help the price of OXEN increase.
Centralized server attacks
Tor’s centralized servers make it vulnerable to attacks, instability or shutdown. Oxen’s decentralization eliminates this possibility.
Sybil attacks
Other networks are also vulnerable to Sybil attacks. If someone controls a large number of nodes, they can compromise a userâs privacy.
Oxenâs tokenomics make it extremely expensive, if not impossible, to perform a Sybil attack. Running a node costs 15,000 OXEN, discouraging malicious actors from trying to control too many nodes.
Checkpointing
Oxen preserves its history with checkpointing, limiting the amount of damage an attacker can do.
Nothing can change beyond the last two checkpoints (eight blocks).
Oxen incentivizes security in a way that increases its token’s value
Service node providers receive rewards, which encourage new service nodes to open.
More service nodes increase the security of the network. They also make it more difficult for anyone to compromise or shut down Oxen.
Each service node requires staked OXEN, which increases the demand for the token. This demand helps the price to rise.
Total Oxen service nodes over time. Source: Oxen Dashboard
Oxen holders can also profit from staking, even if they donât have enough tokens or knowledge to run a server node. Users can stake their Oxen in the Oxen Wallet to receive rewards.
Staking by smaller holders increases demand and encourages token holders not to sell. Less selling and more buying promote higher OXEN prices.
Oxen has an ambitious roadmap
Oxen has plans for the future that could trigger a significant increase in its tokenâs price. You can view these plans on its latest roadmap.
The OUSD stablecoin
Oxen plans to launch a stablecoin, OUSD.
This stablecoin would allow users to store funds on the network without worrying about price fluctuations.
OUSD could encourage more adoption and payments using the network. These increase burning, which helps the price increase.
Voice calls
Private voice calls over an onion network have been impossible. Oxen will support these in its messenger app, Session.
Usability
Everyday privacy for all is a crucial part of Oxen’s mission.
Oxen’s roadmap emphasizes testing and refining its users’ experience. A better user experience encourages more users to join the ecosystem.
More users increases OXEN’s value.
Monetization
Oxen plans to monetize subscription models in Session. It will also monetize Lokinet. This monetization will increase the amount of Oxen burned.
As developers build more apps on Oxen, they also provide more ways to burn OXEN. This burning helps the price of OXEN to rise.
What is the market saying about Oxen?
At the time of writing, Oxen’s social networks have:
- Over 5,214 Telegram channel members
- Over 2,600 subreddit subscribers
- Over 17,000 Twitter followers
- Over 889 Facebook followers
Session has over 30,800 Twitter followers and over 539 Facebook followers. Lokinet has over 3,980 Twitter followers.
The conversation also happens in Oxen’s Session messenger app. Session’s Oxen channel has over 1,375 members. The Lokinet channel has over 1,488 members.
These numbers are much smaller than other projects with some comparable features. For example, Monero (XMR) has over 477,900 Twitter followers. Secret Network has over 172,300 Twitter followers and over 18,120 Telegram members.
Yet, these projects launched much earlier than Oxen. People had more time to discover them. Monero joined Twitter in 2014, and Secret Network joined Twitter in 2015.
Oxen didn’t launch until 2017 (as Loki Network) and didn’t rebrand to Oxen until early 2021.
This difference in numbers suggests that Oxen has room for significant growth.
The following chart shows consistent social volume for Oxen during 2021. This year has seen large spikes of interest.
Total social volume for OXEN. Source: Santiment
What are the risks for Oxen?
While Oxen has massive potential, every promising project has its risks.
Lack of adoption
More adoption will help increase OXEN’s price.
Yet, users needing privacy already use alternatives that mimic pieces of Oxen’s ecosystem. People tend to stay with the same thing until forced to change.
This tendency discourages adoption until necessary – although this necessity could occur overnight.
For example, suppose Twitter forced accounts to connect to their real-life identities. This change would push users that rely on Twitter’s anonymity to alternatives – like Session.
Oxen is still in its early stages and under most people’s radar. Its upcoming useful, differentiating features encourage adoption as censorship and privacy violations grow.
Still, there is no deadline for mass adoption or a guarantee that there won’t be new competitors.
Runaway inflation suppressing the token price
Oxen creates tokens with no maximum limit. This inflation could suppress the price.
OXEN token burns are a routine part of network transactions. They help keep this inflation in check. More adoption causes more burns and further reduces this inflation.
If this adoption never happens, the token’s price might struggle to climb due to inflation.
Yet, it seems likely that Oxen will see more adoption in the future. For example, Session is as easy to use as WhatsApp while offering more privacy. Upcoming high-speed features, like voice calling, make it more useful in everyday life.
Future Oxen network apps could also encourage mainstream adoption. These would increase OXEN token burning, which helps OXEN’s price rise.
Attacks and hacks
Oxen’s design makes it resistant to many attacks that threaten similar tools. Yet, an unforeseen attack or bug is always possible.
The checkpoint system does reduce the impact most attacks could have. The blockchain would preserve almost all history.
A Sybil attack is possible in theory but very expensive to execute. In a strange twist, this could benefit token holders in the short term. Such an attack could skyrocket the price of OXEN.
There are also some vulnerabilities whether OXEN’s price stays low or climbs higher.
A lower token price makes it easier for new service nodes to launch since they need to buy and stake OXEN. More nodes increase the network’s security and stability.
Yet, a lower barrier to entry also makes it easier for malicious server nodes to join the network and compromise privacy.
It’s hard for malicious nodes to join the network when tokens cost more. Yet, a higher token price makes it more difficult to launch new service nodes. Fewer nodes result in a less robust network.
Critics could view this as a lose-lose situation. Meanwhile, supporters might view it as a win-win situation.
Bottom line
Oxen brings privacy tools together under one umbrella. Its superior technology positions it as an ideal platform for modern privacy applications.
Despite being in its early stages, Oxen already proved itself with working products. It is well positioned to ride the privacy and censorship avoidance wave as they become more mainstream.
What can I do from here?
- Start using Session messenger and Lokinet for anonymous internet access [Difficulty: Easy]
- Buy OXEN at an exchange [Difficulty: Easy]
- Stake OXEN in your wallet for rewards [Difficulty: Easy]
- Set up a service node to stake your OXEN, or make it a pooled service node so other contributors can join. [Difficulty: Advanced]
Who should I follow?
- Oxenâs blog for information and updates
- Oxenâs Twitter for updates
- Lokinetâs Twitter for updates
- Sessionâs Twitter for updates
- Oxenâs Telegram for community discussion
- Sessionâs Oxen and Lokinet channels for community discussion
- Oxenâs subreddit for community discussion
- Oxenâs GitHub for technical updates
- Oxenâs Medium for historical articles
- Oxenâs Facebook page for updates
- Sessionâs Facebook page for updates
Sources
- https://app.santiment.net/charts?settings=%7B%22slug%22%3A%22loki%22%2C%22ticker%22%3A%22LOKI%22%2C%22from%22%3A%222021-11-19T15%3A59%3A59.999Z%22%2C%22to%22%3A%222022-05-19T15%3A59%3A59.999Z%22%7D&widgets=%5B%7B%22widget%22%3A%22ChartWidget%22%2C%22wm%22%3A%5B%22social_volume_total%22%5D%2C%22wax%22%3A%5B0%5D%2C%22wc%22%3A%5B%22%2368DBF4%22%5D%2C%22ws%22%3A%7B%220%22%3A%7B%22interval%22%3A%221d%22%7D%7D%7D%5D
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