TOKENIZATION of Internet has arrived, but now the question is how to provide value to your TOKEN?

In Steem's heyday, TOKENIZATION of Internet was heralded in bold ways by then CEO of Steemit, Ned Scott (@ned). He released a posh white paper. Speculations on Steem's future based on SMTs were strong. However, even after 1.5 year, STINC is noway near to release SMT.

However, SMTs has arrived but in different ways, through @steem-engine. It is called SCOT. SCOT has cunstomizable DApp frontend for blog, vlog and TOKEN with staking and voting capability. It is very similar to the rosy version of SMT. Now there are dozens of successful SCOTs called Tribes, few of them have over one million dollar of marketcap.

Unfortunately, the underlying blockchain's token Steem has suffered double bottom in this severe altcoin bearmarket. Its marketcap ranking is hitting new lows in 80s from the dream beginning at number three.

Why on earth a coin with such amount of activities hitting all the lows. There could be couple of reasons: ineptitude of STINC, the largest stakeholder (e.g. huge disinterest in Marketing to bring back speculation), altcoin bearmarket, or simply bad economics.

Speculation is the main driver for most of the top cryptocurrency such as BTC, BCH or LTC. They were supposed be fast and friction-less currency. However, they are not, they are more like speculative vehicles. Their best use case is personal store of value. Since they have declining inflation rate (i.e. at some point lower than inflation in fiat), they can work as better than cash or other medium such as Gold or Silver to store wealth. However, the main driver of their price is simply speculation that more people will buy the coin for store of wealth or more speculation, the coin's price will go up.

There are other coins that are partially backed by profit model such as Binance Token. @binance-hot regularly buybacks BNB and burns them out. Moreover, BNB also work as trading pair for lots of other coins such as EOS or Steem.

TOKENIZATION of Internet has arrive, but now the question is how to provide value to your TOKEN?

In case of SCOT or SMT Tokens, creating a new token is as easy as opening a bank account in local bank, may be easier than that with 100 ENG token and 1000 ENG token for front-end.

If all these tokens are driven by speculation, they may suffer similar faith as Steem. Relative higher inflation along with programmatic selling by STINC made the worse case scenario for Steem's price. Steem lacks speculation. In case lack of marketing, Steem has more mis-information than any other top coins.

One of the strategies, is to burning new token to reduce the supply. However, there should be net positive demand due to speculation even burning to be worked. The best strategy is to find external income source to buy back tokens to burn them. Days of hot ICOs, IEOs and speculation is almost dead. And, not everybody can build @binance model and sometimes Ad-sense can be overkill. Therefore, it is million dollar question is to how to monetize a DApp.

May be DApps have to think like real business to solve real world problems. For example, @actifit can build their own tracker in collaboration with a Chinese farm. They can sell them to regular users to encourage to post in @actifit social media to monetize their activities. The selling point is that tracker's price will be earned back with few months of posting. Then @actifit can collaborate with sponsoring businesses to advertise their products in @actifit social media (DApp) and even send targeted Ad to trackers similar to Amazon subsidized tablet models.

Therefore, next step for the DApps is to find a monetization model to provide value to their token since speculation cannot send them to moon anymore. They need source of income from external source to provide value to their tokens.

@steem-leo's recent efforts to burning LEO through several sinks is a great start to provide value to the LEO token. However, we need more innovation and creativity to monetize. Here are my few ideas:

1. Provide ninja power down option with 5-10% burning of LEO. If someone wants immediate power down of LEO, it can be done with 10% burning and 5% within 3 days. It will also prevent sudden pump and provides stakers fair chance to participate any swift bull run and also reduces LEO circulation.

2. Ad support at Steemleo.com. Most of the revenue (except the maintenance cost) can be used to buyback LEO and burn them permanently.

3. Paying LEO to be in featured post similar to Steemit's recent implementation.

4. Though complicated but LEO-STEEMP bot for liquidity can be used. Profit from the bot trading can used for buying back LEO and burn it.

5. Though controversial, but companies do buy back their shares. If @steem-leo is able to sell some LEO when market price is much higher, then hedge them in fiat for future buy back. However, recent market condition does not even let the option for ICO like sells since sell wall is never reached due to low demand.

6. Consultancy business: for example, @steem-leo founders can peach their top writers to Investment outlets (e.g. ccn, coindesk) to work as intermediaries. @steem-leo will reward writer with LEOs and earn fiats from the outlets. The idea is very similar to @oracle-D

7. Collaboration with other Steem/crypto friendly business such as @niffler.co (a cryptocurrency simulator). Simulated trades with good explanations can be posted in @steem-leo for LEO tokens. @niffler.co will advertise @steem-leo to their audience

8. Stretching heads for more ideas.

Since tokenization of Internet has arrived, the speculation and adsense money are not sufficient enough to provide value to a TOKEN in sustainable ways. DApp and token developers have to find innovative ways to monetize their TOKEN.

Disclaimer: This opinion is not a financial advice, it my personal perspective and opinion. Please seek professionals for financial decisions.

Image sources: Most images are open sourced (e.g. Pixabay, Wikimedia etc.) with Creative common license. Some images are used with due courtesy to respected owners.

Thanks for reading.
@dtrade
Cryptominer since 2013, occasional trader and tech blogger