Token Redenomination - Crypto Academy / S4W3 - Homework Post for @wahyunahrul
Wow, really nice and interesting lecture s, this lecture will really help me know more about token redenomination which is all about producing old currency to replace the old once but with the same value.
Explain what is Token Redenomination in your personal opinion? What distinguishes it from currency or other assets redenominations?
Token redenomination is the process of exchanging an old currency, with new one with the same value and one of the major reason this occur is when there is an inflation in the company and by this the controller of the currency will want to control the currency to prevent it from devaluation.
Sometimes project might have good success rate which will make the token be of high demand by many investors which will automatically increase in price and makes potential investors not to buy because they don't have enough capital to buy in order to invest in the token. Token redenomination is the solution which the project developer will adopt to solve the problem.
It also helps small investors in entering the market also help in increasing the level of buying and selling in the market.
What distinguish token redenomination from currency or other assets redenomination(eg Coin)?
Token redenomination is used to represent a person's share in a project while Coin is basically used for making payment.
Redenomination has its own distinct use in projects ecosystem whereas coin acts independently.
When it comes to cryptocurrency it is a decentralized system in which you do not need any Central authority but in other currencies you need the central authority who will act as third party
Mention the advantages and disadvantages of Token Redenomination
Attracting of many people to come and invest in the market because when a token is undergoing redenomination, small investors will want to enter the market and invest because the price of assets will be within their buying strength.
.The presence of small investor's in a project will enhance the project and will add more liquid to the market and by this the will maximum buying and selling of assets
It will help trader to be able to maximize profits because when there is increase in the buying and selling of assets there will be enough income flowing and the trader will capiyltalize on it and make profit.
- It will bring about people loosing their fund due to the fact that a look alike application can be created and when you eventually click on it and insert your funds it will automatically disappear and your fund gone.
- The stress related to token redenomination is much and at that investors can lose interest in the project on the long run
- Gas fee charges will always be a hindrance to projects, in the process of that token might be lost.
Do all cryptocurrency projects need to do Token Redenomination? Explain in your personal opinion
Well it is yes they do need it and no they dont.
Yes, because token redenomination is important to some crytocurrency projects . redenomination Every projects needs money to either complete or funds its ongoing projects. Token redenomination attracts potential investors and this will increase the capital of the project, automatically the market capitalization increases and also improve the growth.
No, not all because investors are condition to the project developers proposal concerning token redenomination, but the ratio of redenomination is determined by the investor.
Secondly, token redenomination is only considered if it has lost it value but it happens rarely. Crytocurrency project over the years has being going smoothly, so redenomination will not always be necessary for those kind of crytocurrency project.
Choose a project that has or is currently doing Token Redenomination and show how to convert old tokens into new tokens. (Screenshot Required)
The project I will be using is NPXS to Pundi X
Here NPXS is the old token while pundi x is the new token
For us to change from NPXS to pundi X the first thing we will do is to go to the sitepundi x. That is what will display in the opening lf the page
We will see information that NPXS is now pundi x and it started on 30/may/2021
Below the write up about the day the token will be swap, you will see swap now.after the swap now I was redirected to another page where I saw features like to Download fx wallet or I can connect to the following wallet of my choice like metamask,walletconnect etc
I clock on wallet connect and I saw a place to click on so that my wallet will be connected. I clicked on it
After clicking on it, I was redirect to my trust wallet for approval and for me to approve I have to click on connect.
After I click on connect, I saw an address and that I wanted to swap the pundi x
After I leave my wallet to the page again, I was provided with a space for me to swap my NPXS to Pundix but I was unable because I do not have the old token which is NPXS.
Analyze whether the token from the project you chose in question number 4 is worth investing in. (Screenshot Required)
Pundi x is worth investing in, the token has a utility token which help in covering fee and a card that their trader can use to make purchases in any part of the world both online and in offline.
The token has a wallet in which their user can used for storing funds, one of the aim of the controllers of this token is being able to to make purchases in any part of the world using the digital token which makes it very interesting
It works on the ethereum blockchain.
From the screenshot above we will see that the coin price as at when this assignment was done is $1.28, circulating capital of 258,491,637.23pundix, it also has a volume of 0.08452 and a market cap of $329,589,397 and rank 234
Though as at the last 3 months it witness a downtrend in price but currently we are experiencing uptrend meaning the future is bright for those that invest in the token.
Token redenomination is key to projects that wants to grow, this gives potential investors reasons what they should invest. It means the project has the society at heart, because retail investors have more numbers than big investors. Retail investors investing in any project makes the project to increase it value of crytocurrency and that of market capitalization. Tokens can be lost at anytime through maintenance of the project and also from gas fee in the process of redenomination.
Thank you professor @wahyunahrul