RE: Hidden potential. CanYa coin
Good question. So I think you nailed it. The value of the token increases as their adoption / user base increases. The use of the token is to ease the process of matching service requesters and those that will perform the service especially when the match crosses international borders.
There are 3 uses the team have outlined:
The first two are to give service requesters a means to promote their listing and for rewarding users through things like referrals, registration and new user rewards. These two I believe are intended to help with the platform adoption.
The main use is as a payment from the service requester to the fulfiller. There is a fee around 1% for this of which 30% goes to the reward pool, 30% goes to the platform to support maintenance and further development, 10% will goto designated charities the first of which they chose giveth and the last 30% will be burnt. The burning will over time reduce supply and aide in the increased demand.
The value of a particular token doesn't always increase just because their is an increase in platform adoption. I think this is a common misconception in the cryptosphere at the moment.
That being said, I think the first use you've described - where the coin is a means of promoting listings - is a good example of the potential appreciation of the coin over time. I'm less convinced about the other uses resulting in an appreciation in coin value.
Still, a great project and I'll follow the success of the app. Thanks for the post!
I would think an increase in adoption would create a decrease in supply. So if the demand even just stays level wouldn't that alone cause the token value to appreciate? I think the other piece is there is a token burn mechanism through their fee structure which over time would decrease supply to the same effect and an increase in adoption would accelerate that.
If you don't mind, I'd love to read your thoughts on this. Thank you for taking the time to read and comment!
It comes down to what some people refer to as 'token velocity' - the speed at which tokens change hands, or conversely the amount of time people typically hold tokens. The structure of a platform has a huge impact on people's desire to hold tokens.
For a good overview, check out: https://multicoin.capital/2017/12/08/understanding-token-velocity/
So back to your examples for the CanYa coin - the desire for people to hold tokens to use to promote listings gives reason for token value to appreciate, so does token burnoff as you say.
Whereas in the example of the token underlying payment for services, this just results in lots of tokens changing hands lots of times, which alone wouldn't necessarily increase the value of the token, it would just increase its velocity.
If you're not planning on using a platform, then you're typically an investor wanting to hold tokens. I suggest thinking about token velocity and the reasons that a particular project has for people to hold tokens long term. As discussed in the article I linked, the lower the token velocity, the greater the network value, meaning greater growth of each token on that network.
Very interesting. Thanks for sharing.