In this article, I discuss some of the key elements that comprise the Solve.Care token economy. It is not meant to be comprehensive but hopefully acts a good primer for those less familiar with Solve.Care. The information presented represents my own personal understanding of matters, gleaned from company publications and earlier Telegram discussions. Where I was unclear on a particular aspect I did seek some clarification from Solve.Care and I am grateful for their useful feedback.

What is Solve.Care

Solve.Care’s mission is to dramatically reduce healthcare administration costs and by doing so improve both access to care and quality of care for individuals.

This revolutionary new platform incorporates blockchain technology and aims to redefine healthcare for individuals, employers, providers, administrators, insurers and government agencies around the world.

Global spending on the provision of healthcare now exceeds $8.5 trillion dollars per year. The cost of pharmaceutical drugs alone exceeds $1.1 trillion dollars. There exists a significant opportunity to reduce these astronomical costs by introducing efficiencies driven by new technologies and new thinking. Solve.Care is leading the way.

Token sale

Solve.Care closed its public token sale in May 2018, selling all 350 million SOLVE tokens on offer. Total supply is 1 billion tokens. 180 million tokens are reserved for the team and advisers and are subject to a vesting schedule; the remainder will be deployed in development of the ecosystem both organically and via acquisition.

To meet with regulatory compliance, the 350 million tokens sold are being unlocked according to a published schedule. 37% (130 million) will be unlocked by 16 Feb, a total of 68% (240 million) by 1 May 2019 and the majority (340 million) by 1 August 2019. SOLVE token is presently available for purchase on Bittrex and KuCoin exchanges.

Dual token system

The Solve.Care platform has two tokens in use:

Care.Coin. This is a programmable currency paid to providers for services rendered (e.g. physicians). Care.Coins are stable in value and backed by the financial reserves of the issuer (e.g. insurance company). They can be denominated in any currency, have no fixed supply and are not publicly traded.

SOLVE. The native utility token required to participate in and transact on the platform. SOLVE is an ERC20 token on the Ethereum Network. Token supply is fixed and the price variable, as determined by market supply and demand.

Why use a proprietary token?

The purpose of SOLVE token is to measure effectively the performance of the Solve.Care ecosystem and to fuel its growth. All activities undertaken on the platform are transacted in SOLVE tokens. Crucially, this allows for the creation of a compelling business model for Care.Card publishers (see “Marketplace” below) that can clearly demonstrate and measure value and reward publishers for investing their intellectual property into the platform.

The increasing network value arising from adoption at scale, and expansion in scope, can best be captured by a proprietary platform token that is inextricably and uniquely linked to its ecosystem.

Who are the buyers of SOLVE tokens?

Tokens are required by sponsors of Care Administration Networks (e.g. insurance companies, hospital groups, employers) to pay for:

Provider and/or member Care.Wallets;

Care.Card purchases for use in provider and/or member wallets;

Service fees accessed via Care.Cards (e.g. ride fees, prescriptions);

Emission of and payment in Care.Coins.

Non-sponsored individual wallet holders (self-pay) will require tokens to pay for their monthly wallet subscription and any chargeable Care.Card or service use. This category of buyer is not initially expected to constitute a significant proportion of token demand.

Care.Community participants (e.g. developers) will require tokens to participate in the Care.Marketplace, to publish their own Care.Cards, or to provide expert Care.Card review services. This category of buyer could represent significant token demand over the medium to long term, once Care.Marketplace becomes well-established.

Taking a closer look at client token requirements

Let’s consider a client that commits to establish a Care Network. What are the token fees payable and how are they calculated?

Wallet fees

Firstly, the client will need to decide how many wallets it plans to offer. These might be provider or member wallets or both, depending on the nature and purpose of the Network. Each wallet constitutes a “node” and Solve.Care will levy a charge per node denominated in the client’s payment currency. However, all payments must be made in SOLVE tokens only.

Care.Card and service fees

Wallets need to interact with Care.Cards to provide functionality. Should the Network sponsor choose to provide its members with access to Care.Cards downloaded from Care.Marketplace, these may attract one time or periodic fees denominated in tokens (see “Marketplace” below). Should any of these Care.Cards provide access to paid services (e.g. ride services), then tokens will also be required to cover these costs.

Care.Coin fees

Should the client wish to make payment to its providers using Care.Coins, Solve.Care will levy an emission fee based upon the fiat value of the emitted Care.Coins. The fee charged will vary depending on the associated services provided (e.g. with or without post-payment reconciliation reports).

A worked example

By way of illustration only, let’s assume a US-based company establishes a Care Network for the following:

2,000 provider wallets

100,000 member wallets

Care.Coin payments

Ride services

Assumptions:

Provider wallet fee is $120 annually

Member wallet fee is $24 annually

Member wallet represents a family of three

Average cost of a doctor’s visit is $160 net of co-pay

Each family member visits the doctor three times per year (i.e. nine visits per wallet)

Care.Coin emission fee is 1%

One third of member wallet holders are entitled to three paid rides per year

Average ride cost is $15

SOLVE token market price is $0.25

NB: The above assumptions are approximate and for illustration purposes only and do not represent Solve.Care’s actual terms of trade.

Calculation of tokens required by client per year:

Provider wallets: (2,000 x $120)/$0.25 = 960,000

Member wallets: (100,000 x $24)/$0.25 = 9.600,000

Care.Coin emission: (100,000 x 9 x $160 x .01)/$0.25 = 5,760,000

Rides: (33,300 x 3 x $15)/$0.25 = 6,000,000

Total number of tokens required per year = 22,320,000

In summary, the number of tokens required will depend upon the number of wallets and the nature of the services provided. In addition, the token quantity will be influenced by the token market price. An increase in token price will reduce the number of tokens required for a given spend; conversely, a fall in token price will increase the number of tokens required.

Payment of tokens by clients

A client will be allocated a master wallet for its token payments. This wallet must be in credit with a minimum number of tokens (“reserve”). The reserve will be calculated based upon a percentage of the client’s forecast periodic token usage. Top up token payments must be made to maintain the reserve quantity.

Ordinarily, clients will make monthly payments of tokens, although Solve.Care may need to vary this on occasion to align with clients’ revenue models and healthcare plan redemption cycles.

Mitigation of clients’ market risk

Large corporations and government agencies tend to be conservative and risk averse. Most are unable or not permitted to transact in or manage digital tokens and for the majority a fixed cost fiat model will be essential. Solve.Care intends to make paying in tokens as simple as making a funds’ wire transfer.

To accomplish this Solve.Care will lock in the fiat value of deposited tokens at an agreed market rate at the time of the deposit. The effect of this will be to match the client’s fiat cost of purchasing tokens with an equivalent fiat credit. The conversion rate will be held firm for a short period, to allow for token purchase and transfer, ensuring that the client bears practically no token market risk. In the event of extreme volatility in token price, or market disruption, Solve.Care may reserve the right to make mutually acceptable alternative arrangements. Solve.Care treasury will manage its own market exposure as it sees fit.

An integral part of Solve.Care’s growth model is via engagement in partnerships with third party intermediaries. A small number of intermediaries may prefer to negotiate fixed token fees and to manage their own treasury risks. In such cases, when fees fall due Solve.Care will simply draw the requisite number of tokens from the client’s reserve at the prevailing market rate.

How do clients purchase tokens?

Clients must purchase their tokens from the open market and cannot make purchases directly from Solve.Care. Purchases can therefore be made either on exchanges or via Over the Counter (“OTC”) arrangements. Most large client purchases are likely to be executed OTC for reasons of expediency and convenience.

Solve.Care is working to establish appropriate OTC facility arrangements that will meet the requirements of conservative clients both in terms of compliance and simplicity. It is probable that multiple such arrangements will need to be established, to meet with the diverse expectations or preferences of clients in different parts of the world.

The greatest source of token market liquidity over time is expected to be on exchanges. Whilst large clients are unlikely to participate there, at least in the near term, it is highly probable that OTC desks will actively trade on exchanges both to hedge their private order books and in the capacity of market maker.

Treasury management

As mentioned earlier, Solve.Care will manage its token income as it deems appropriate and in accordance with its liquidity and risk management policy. It is however quite likely that tokens paid by clients in respect of forecast use of third-party services (e.g. rides) will be hedged on receipt. Treasury tokens reserved for acquisitions will be used as and when suitable opportunities arise and will be subject to board approval.

Direct pay consumer purchases of tokens

Solve.Care will endeavour to make acquisition of tokens as simple as possible for consumers but will not facilitate direct in-wallet purchase of tokens. Exact mechanisms will be considered later but might include service facilitation between consumer and exchanges, or possibly support via an approved third-party crypto wallet.

Marketplace

Creation of Care.Cards is seen as a key driver in gaining broad platform adoption. The very substantial number of prospective use cases and requirements of different geographies makes engagement with qualified third-party developers an imperative. Care.Marketplace is envisaged to be the go-to place for requesting development and publishing of Care.Cards. As with other app stores, it is possible to envisage thousands of bespoke application cards. Care.Marketplace will be hosted directly on the Solve.Care platform and is scheduled for soft launch in Q3/Q4 of 2019.

Solve.Care has still to work out the specific detail around shared revenue models and more on this can be expected later this year. It is most likely that there will be options for publishers to charge one time fees, per use fees, periodic subscription fees, in-Card service charges and possibly even freemium models. Care.Cards will fuel platform adoption and drive network growth. This in turn will drive increased demand for SOLVE tokens.

In conclusion

Whilst presently in its infancy, the SOLVE token economy has been well-considered. As with all emerging systems, some details are yet to be determined and there is ongoing consideration being given as to how best to structure some elements. It’s a work in progress that will be refined and developed over time based on real experience and user feedback.

The size of the market opportunity being addressed by Solve.Care is very substantial. Should the platform gain widespread adoption then network effects may well create significant value. At that time, Solve.Care is likely to consolidate its position through well-targeted acquisitions, further driving network value.

Disclaimer: The content of this article is based upon information already in the public domain, prior disclosure in Solve.Care’s Telegram channel and feedback elicited directly from Solve.Care in response to some specific questions. This article is not a solicitation or recommendation for the purchase of SOLVE tokens. Any opinions expressed or conclusions drawn in this article are personal to the author and do not necessarily reflect those of Solve.Care or its employees. Whilst the information provided is offered in good faith, it should not be considered as complete and may contain errors or omissions. The author makes no claims as to the accuracy of any of the information provided and readers are recommended to undertake their own validation or research.