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RE: SMTs, SCOT, Tokenization, and SBI

in #weedcash5 years ago

Artificial floor is a potential issue, but if the token issuers have a value proposition and don't over-issue their token, it's not an issue.

One way of looking at it: the 'market cap' of any token/project is based on a present estimation of discounted future value of the project. Market cap equals tokens issued * token price. So if the estimated value of the project is only 100 STEEM right now because it's an unproven (or untrusted) team, but the team issues more than 100,000 tokens, the price floor becomes a real issue. On the other hand, if they understand that and only issue 10,000 tokens, then the token may find an equilibrium around 0.01 and not be limited by the price floor.

Biggest issue I have seen with these tokens selling at 0.001 and no demand at all is because people think that if they just issue a token they will somehow get STEEM.

(Actual question I have seen in steem-engine discord: I issued my token and listed on market, when do I get paid?)

It doesn't work that way. It may feel like magical internet money, but crypto prices actually are driven by fundamentals (estimated probabilities of world-changing properties), with occasional madness causing deviations from fundamentals-driven prices.

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I agree and this is part of the problem. People simply issue too many tokens, then it is somehow my faukt for daring to suggest they may be over valued.

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Most tokens are overvalued, and I'm pretty sure it's hubris on the part of issuers. Definitely not your fault.

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