STEEM/PAL/LEO will be the target for most airdropped Tokens in Future? LEO, BYTEBALL, PAL, HUNT and many more tokens have shown that it is quite possible.
Airdrop is a kind of coin distribution technique that is applied to many altcoins. One of the most notorious in the history was Auroracoin. It was one of the first airdropped coins that was given to Icelanders for free. With initial hype Auroracoin once reached top ten coins by marketcap. Since then it went to oblivion due to better coins/projects. In fact, 90% of startup dies, for altcoins rate could be higher than 90%.
Airdrop is an alternative to other coin distribution techniques such a Proof-of-Work (PoW) where coins are awarded to miners (i.e. a computer hardware), or Proof-of-Stake (PoS) where coins are awarded to coin holders.
Problem with PoS is that initially coins have to be distributed fairly. Some coins such as PeerCoin started as both PoW and PoS. Some coin are sold in a crowd-sale and then moved to PoS. For example, NextCoin (NXT) is one of the first coins that began PoS after crowdsale. EOS recorded the largest crowsale as ICOs in the history of Cryptocurrency and then moved to DPOS, delegated version of POS.
Steem went through PoW for beginning then switched to hybrid DPOS and Proof-of-Brain (PoB).
However, airdrop can make rich richer. For examples, the most coins are airdropped on rich (large) bitcoin holders. For example, any hardfork of Bitcoin can be considered as airdrop since BTC holders get free hardforked coins (e.g. Bitcoin Cash- BCH) proportional to their BTC holdings.
Recently, BTC holders are the beneficial of getting BCH, Bitcoin Gold, Bitcoin Diamond and numerous other hardforks. Other notable airdropped coins that related to BTC are Steller Lumen, BitCore, ByteBall etc. However, in case of some airdrop coins BTC has to lend for a period to get airdropped coin. Examples are ByteBall, BitConnect etc.
Other favorite coins that are frequently targeted for airdrop are Litecoin, Ethereum, EOS, DOGE. Recently, EOSDac airdropped on EOS holders, it achieved $110M, 1/6th of STEEM's marketcap.
Already, Byteball has airdropped upto $200 worth of Byteballs to active Steemians. HUNT coin by @steemhunt has airdropped on STEEM holders with 1:1 ratio, almost 100M tokens. PALcoin airdropped on active Steemians but capped the highest distribution at 2500 PAL to make up for inequality which is a very intelligent idea.
LEO is a more special case. It took the page from the PALcoin and distributed 1:1 LEO to staked PAL. I would stay it is a very intelligent idea. The devs tried to distribute LEO to most active or dedicated PALians who may be frequent contributors in @steemleo front-end.
Interestingly, content creators can now earn LEO, PAL, Steem for the same content with just inserting the tag.
There will be big question about the sustainability. As in recent popular discussion between @neopch and @starkerz, we come to know that every upvote in Steem or any token will be sold in the market. Therefore, investors have to buy them from the market to keep Steem/token price rising or stable. Investors should have incentive to buy the token. In case of BTC or LTC, it is the scarcity and FOMO, but in case of token where inflation is relatively higher it has to put forward some solutions. For examples, investors can buy tokens to attract attention for their business and products.
Another idea is the advertisements in front-end. For example, steemleo.com can use advertisement profit to buy back some of the coins and burn them to increase the demand for LEO. Or, they can hedge by selling during bull run and buying during the bear run. The wealth sold during bull run can earn money by investing in safer investments such as annuities.
Let us do the backward thought experiment. STINC had sold 5M Steem at $5 during the bull run and withdrew $25M from the market. They invested this $25M in safer REIT, Annuity stocks which easily earned them $200K per month. With little bit cost cutting STINC could run the whole company with annuity and still keep $25M as hedging. Or, they could start buying Steem now from the advertising.
STEEM blockchain has recently reached 1.3M userbase including all DApps such as Palnet, Steemleo, Steemhunt, it can rise to 10M pretty soon due to network effect. Already, Steemit platform is using advertisements for new businesses such as ICOs or projects similar to Bitcointalk.org/CoinMarketCap for profit.
Therefore, it could be a lucrative option for future ICOs/DApps to airdrop on STEEM/PAL/LEO holders through SMTs/SCOTs due to their active participation and understanding of crypocurrencies and DApps.
I hope that @steemleo founders will put strong thought on the sustainability of TOKEN's price through other income generation processes other than coin emission.
Disclaimer: This opinion is not a financial advice, it my personal perspective and opinion. Please seek professionals for financial decisions.
Thanks for reading.
@dtrade
Cryptominer, trader and blogger since 2013
The #Newsteem is awesome!! With scot and smts airdrops, the possibilities are limitless. And to think this is just the beginning.
Thank you for a very insightful post. A lot of people forget how small the overall STEEM community is compared to their non-blockchain peers.
It will be interesting to see how significant onboarding (powered by both advertisers and dAPPs) will change the ecosystem and ofcourse, supply vs demand. We should never forget that airdrops are efffectively gifts. you can do with them whatever you want. I decided to stake my PAL and LEO from the airdrops and see what will come from it in the future.
Exciting times of everyone here! thanks again for your post.
edgar.
"Or, they can hedge by selling during bull run and buying during the bear run."
That has nothing to do with hedging since it doesn't reduce risks but only makes the volatility less. Hedging would mean they go short while also being long to get a neutral position.
"Let us do the backward thought experiment. STINC had sold 5M Steem at $5 during the bull run and withdrew $25M from the market. They invested this $25M in safer REIT, Annuity stocks which easily earned them $200K per month. With little bit cost cutting STINC could run the whole company with annuity and still keep $25M as hedging. Or, they could start buying Steem now from the advertising."
You could also use your own money and invest. Most fund managers underperform the market, there is no reason to trust the people managing this fund. Unless there is a >10 year track record of outperformance that has been audited by a third party big law firm.
"STEEM blockchain has recently reached 1.3M userbase including all DApps such as Palnet, Steemleo, Steemhunt, it can rise to 10M pretty soon due to network effect."
Are those just registered accounts or real active people? Because there are a lot of people here who have multiple accounts and there are lots of bots also. + not everyone is very active on steemit, some left this place long time ago.
I bet in reality only 20% of that number are real active people. If it's even that much.
Definitely there is no 1.3M users, I must say 1.3M accounts.
Shorting is not even possible for most altcoins.
As said, it is just a thought experiment. They could do better by shorting $25M on BTC or LTC near peak.
Yes, mutual funds are dinosaurs. We are in ETF era. Even a tech or Semicon ETF will probably perform 10-15% growth in a year. But a real-estate reits are good enough for 8-10% dividends in all sorts of market scenarios.
Thanks for visiting!
"Shorting is not even possible for most altcoins."
Yes that's a good point you are right. And you want to know why that is? I always wondered why Binance doesn't allow margin trading but apparently the real reason is because it would make 51% attacks profitable. Because you could fairly easily 51% attack the smaller altcoins but there is simply not much money to be made with that because it creates a liquidity crash and the cyber criminals can't sell all their altcoins on the market at a good price. But if you can short then those things become profitable. That's the reason behind it.
"Yes, mutual funds are dinosaurs. We are in ETF era. Even a tech or Semicon ETF will probably perform 10-15% growth in a year. But a real-estate reits are good enough for 8-10% dividends in all sorts of market scenarios."
Not even mutual funds are underperformers. That reminds me of an advertisement i saw back in 2017 in the bull market while we where going parabolic. I don't remember the website it was on but they where saying something in the line of: "check out our amazing performance of the bitcoin trading bot. Up 400% this year." And when i did the math they actually underperformed a simple buy and hold strategy at that time.
What's then the point of paying fees for a trading bot that's even not better than what the market is doing. You could say this for 99% of wall street, they are like car salesman. I have been trading for a long time, you know how guys like goldman sachs call their clients? Clients are muppets, you have to sell the most complex product to the least sophisticated investor. That's how they make money.
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