SMTs will increase the value of Steem

This post is aimed at speculators and traders. There are no romantic theories of how SMTs can change the world, is just simple math on why the price of Steem should increase.

Why will SMTs increase the price of Steem?

To answer this question, we need to look at the concept of “Automated Market Makers”:

“Automated Market Makers are smart contracts, largely based on the Bancor Protocol [2], that may be constructed during the initial ICO setup of an SMT for providing perpetual liquidity to an SMT community.” SMT White Paper

The liquidity mentioned on the whitepaper is obtained by a reserve in the form of Steem that is locked away so that trades can buy and sell custom tokens immediately. This means that a lot of Steem will be locked away and taken away from the exchanges.

Everyone who creates an ICO or a custom token with the feature of Automated Market Makers will be contributing to the scarcity of the Steem Token, which should in time increase the value of Steem (if demand stays constant).

There are other factors that should contribute to the increase of Steem's value, however the implementation of Market Makers is for me the most compelling reason to invest in Steem now.

If you wish to analyze other reasons why Steem is a good buy at the moment, you can check out @ned last post, where he states 5 reasons why SMTs will contribute to Steem's growth.