Choon: NOTES Unlock And Valuation

in crypto •  15 days ago

Last night, around midnight (GMT) the Choon NOTES (ticker: NOTES) token was unlocked. A moment artists anticipated on for months, especially after the delay of unlocking September 1st. But, as short as the first sentence of this piece seems to be, there actually is nothing more to it than that. A bit underwhelming it seems, for a happening, most crypto would’ve hyped up to the max.

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The Choon Way

Hyping things up is exactly what Choon doesn’t do, and probably never will. Choon is a musicstreaming platform in the first place, which has to happen to be on blockchain and uses crypto tokens to distribute the share in streams and revenue. But that’s about it. Choon never pretended to be like other cryptocurrencies. If I recall correctly, Gareth Emery mentioned it when announcing his plans for Choon, and even the Choon whitepaper warns to not use NOTES as speculative token for daytrading or trying to get rich quick.

Underwhelming was probably what Choon was aiming for all along. Yes, they had to unlock the token at some point, and after the delay in September, another one would have been really bad for trust. But as excited artists might have been about the unlockdate of December 1st, Choon just announced the token isn’t locked anymore and continues business as usual. Focusing on music and artists, instead of creating a fake or hyped up value for their token.

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What’s an unlock?

The official Choon-Telegram and Facebook group for artists on the platform, got bombed right after unlock. A lot of people wonder how they can trade NOTES, on what exchanges it is listed, what its value is etc. But to understand what happened now, let’s start with the basics. The unlock.

As exciting as it may have sounded in the run up to the unlock-date, unlocking a token is not much more than flipping a switch, Off/On. Technically, It has a bit more to it, but let’s keep it simple. So, the developers activated the contract on which NOTES are running, and that’s it. Unlock means tokens are freely transferable, between Ethereum addresses. So, now the token is unlocked, you can move them to your wallet, to an exchange, or between users. It even is possible to transfer NOTES back into your account on Choon now, as that basically is an Ethereum wallet address too.

Value

But does this give value to the token? The answer is simple: No. Value is based on trades, and as an unlock doesn’t necessarily mean a listing to an exchange, it also doesn’t add value to a token per say. It could, but that’s because most cryptocurrencies unlock because of a listing on an exchange. Most of the time after rounding of an Initial Coin Offering (ICO) and distributing their currency to all investors. Choon didn’t have an ICO. They just started distributing the NOTES-token to artists, based on their streams and revenue percentages. And as it seems now, Choon didn’t apply to an official listing process either for now. However, even if they did, it probably would be a Non-disclosure agreement (NDA) to prevent speculation and it would be announced by the exchange, just hours before the actual listing. At the time of writing, no news on that front. So now the question remains, if there is no trading possible, what gives value to the NOTES token right now?

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Exchanges

Some exchanges don’t need a listing. These decentralised exchanges, or DEX’s, offer the possibility to trade between users. Coins and tokens can be added manually, and this applies to NOTES as well. So, because of the unlock, NOTES are listed for trading. An example of such DEX is Etherdelta. But NOTES are not yet searchable by their ticker. So to see them, and to see the trades, you have to search with the contractaddress. For now NOTES can be found here, and when the ticker is active they can be found here. But does this listing give value to the token? The answer is yes and no. Yes, as there are trades, and whatever someone pays last for NOTES is the current value. And no for several reasons. NOTES aren’t added to CoinMarketCap yet. Volumes on a DEX like Etherdelta are currently awfully low. And the price can shift massively, as it’s easy to make a typo and sell a NOTE to cheap or buy to high.

What does this mean? Well, simply put, if 1 NOTE, out of 2 million circulating NOTES, sells for $1, the marketcap of NOTES would seem to be $2 million dollar. However, it doesn’t mean the other 1.999.999 NOTES will sell for $1 as well, or will be sold at all. With the current very low volume (only a handful of trades happened so far) it’s absolutely useless to base the NOTES value on that. So, unless volume picks up massively, or NOTES get listed to an official exchange, in my opinion they don’t have monetary value at all right now. Why? Because if you want to sell your car for $10.000, as you feel it’s worth that, and nobody wants to buy it, you lower the price to a point you don’t want to sell it anymore. If you cannot or will not sell your car, it’s not worth $10.000 to the outside world anymore. Actually, it’s worthless in monetary value, as nobody bought it. However, to you the car is still valuable. Otherwise you would have given it away for free, right?

Responsibility

The same goes with your NOTES. So volume is low. Maybe you want to lure some buyers in and decide to ask a very low price for the NOTES you offer to sell on a DEX. One of the upsides of DEX’s is that you can set an asking price at any value you want. And as you decide the price, you decide on the value too. So, as a seller of NOTES, you actually have a responsibility. Do you really want to sell low, in the hope someone goes through the trouble of trading via a DEX? Think about the selling of the car. Would you give away your NOTES for (almost) free? Is your music worth nothing? Or do they represent a monetary value for you? If so, and you decide to trade, ask at least that value and stick with it. We are the artists and we are the ones who are responsible for the valuation right now. So be careful with it.

Trading

Maybe you were hoping to see a comprehensive guide on how to trade through a DEX here now. Sorry, there won’t be one. Trading through a DEX is the most complicated way of trading crypto. Even for crypto enthusiasts. So, if you don’t know much about crypto, trading or both, my advice would be, stay away from the exchanges for now. The risk of losing your NOTES by making a little mistake is much higher on a DEX, as it would be on a big centralised exchange.

Also, trading now doesn’t make much sense. Volumes are very low, so it could take days before your order will proceed, if any. If you have faith in your music, and in where Choon as a platform will go, NOTES will be probably worth much more in the future, when the platform is fully developed, and NOTES are listed to a decent exchange. That would be the time to make up the balance on what you have earned, not the handful of trades done last night.

My advice? Be patient, and don’t sell yourself short. Focus on music. On new collaborations. On creativity. Don’t put your dependency on NOTES value yet. When NOTES are worth something you’ll probably notice through socials or Telegram again. Don’t worry about today. Don’t be frustrated by today. The time in the sun will come, the question is, do you have the patience to wait for it…

© 2018 Marco Svarda / Arkroom

Sidenotes:
  • I am an independent artist on the Choon-platform. I hold a significant amount of NOTES. However, I am no official part of the Choon team.
  • This article is not meant as investment advice, and shouldn’t be treated that way.
  • Unlocking was the only thing promised on December 1st, so please don’t blame it on the Choon-team if there is no listing in place yet.
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Very well said however it is written from a very optimistic viewpoint.

I think Choon could have been more clear about what they actually meant by "unlocking". It inferred that you would be able to sell them and they didn't really explain it. I know a lot of musicians thought this and many are not up the their waists in crypto so don't really understand much about how to trade tokens.

It just feels like all the wind has been blown out of Choon's sails at the moment and although NOTES will undoubtedly be worth more in the future that is only the case if the platform survives. I wonder how much of the original funding they have left and whether they plan another round any time soon?

I do feel for them as it's a great platform but the market downturn has really had a negative affect as we can see from the Steemit layoffs recently.

Let's just hope they can make it through to the new year and the market starts to recover as it would be a huge loss if they closed up shop.

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Well they are certainly not closing down. As opposed to most other blockchain+music companies, they are primarily a music platform company more than a crypto business. They cancelled their ICO and don't seem to agree with all the crypto mumbo jumbo that happens to be the industry standard for crypto projects. They are building a music service that happens to be fueled by blockchain technology because it makes sense.

As for wind blowing out of sails, that seems to be the case with all of crypto at the moment. And seeing how they are a music platform company more than a crypto business, I don't think anyone should be worried about platform survival at all yet. They also didn't even plan on getting any revenues before next year according to the WP either. (paid streaming packages, and advertising)

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That's good to hear if it's true; do you have details of their investment & burn rate?

Yes I agree about all crypto projects having the wind blow out of their sales however if they are primarily a music business then the correlation to the decline in crypto should not affect them that much surely? I would have expected increased marketing and momentum as a fledgling platform that needs to build brand awareness rather than the radio silence that seems to have descended. I haven't seen any mention of media coverage for months. The early enthusiasm just seems to have waned and communication has dropped off too.

As I said I love the idea where's all the excitement gone?

Thank you, thank you, thank you @arkroom!!
Your very well put article helped me to clarify a few things.
I agree with @atomcollector more transparency on the Choon side would have been welcomed, nevertheless it i what it is & now I know thanks to you!

excellent article!

Really good explanation. Everyone should read this.

Well written in simple language, just the way I like it. The way I see it, NOTES is more of a loyalty scheme to unlock features on the platform so you can do more with it rather than having a price.

Let's face it, none of these crypto sites are made to be easy to get money out and used in real life and so the masses will not come because it is far easier right now to send money by bank transfer or PayPal. Therefore no real value in taking them out if it's an insignificant amount like less than £100 (plus you have to pay tax in the UK on anything converted from crypto to fiat).

I agree with your advice - keep hodl of notes and focus on why you make music, share your sounds wherever you want, don't get caught up with the money side and most importantly - HAVE FUN!

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Very excellent article.

Thank you for this. I still regard the unlock as a big development.

Thanks for this, it's really helpful!

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Muy bien explicado!

Well written, thanks for the post!!
Afterall, I still can only laugh about the people saying for month now: "I earn so much more with Choon than anywhere else in the music industry."

Great read and info! thanks for sharing this one! learned much!! And i had been wondering about all of this. it is just damn cool that these sites are showing up and things are on the change! and you are right, focus on the music! on it! thanks!

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