State of Sentinel Q2 2024

Key Insights

Performance Analysis

Sentinel creates a peer-to-peer marketplace connecting:

On the supply side, active nodes have decreased by 49%, from 15,000 to 8,000 QoQ. In contrast, active sessions have increased by 9% on the demand side, from 42,000 to 46,000, indicating a rise in user adoption of dVPNs. Sentinel’s average daily downloads and uploads have risen by 40% and 45%, to 4,934 GB and 310 GB, respectively, signifying higher bandwidth consumption for both downloads and data sharing in Q2 2024. However, active subscriptions have dropped by 26%, from 18,000 to 14,000 in Q2 2024.

Revenue generated by the dVPN node hosts, declined by 77% QoQ from $427,000 to $99,000. The decrease in aggregated service provider revenue was mainly due to subnet restrictions and a 77% decrease in subscription deposits, which are the highest revenue generators. This is primarily due to the subnet restriction. Staking rewards also fell, impacted by a reduction in the number of node operators, leading to fewer staked tokens and a 77% depreciation in DVPN’s price.

Staking rewards from time-based payments have surpassed those from the pay-as-you-go (per-byte) method, suggesting a shift in user preference and a change in the revenue generation strategy. However, staking rewards have decreased overall across both payment models. For time-based payments, staking rewards dropped from $30,000 to $17,000, reflecting a 45% decrease, QoQ. Similarly, for the pay-as-you-go (per-byte) method, staking rewards fell by 22%, from $21 to $17.

Following the protocol upgrade in September 2023, Sentinel’s session count increased due to the introduction of onchain subscriptions and time-based payments. These new payment models now generate the highest revenue. Previously, Sentinel supported peer-to-peer transactions where community-hosted dVPN nodes priced their bandwidth services per GB. The upgrade enabled nodes to set monthly rates or custom time periods for unmetered bandwidth usage. This change allowed dVPN applications to aggregate nodes, lock tokens with them to create subscription plans, and offer unlimited access at a flat monthly rate.

After declining steadily, Sentinel’s DVPN saw a significant drop in rank by the end of Q2. DVPN’s rank fell from 729

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