CoinJanitor -- Project's Methodology and Operational Model
CoinJanitor is a blockchain-based company that seeks to retrieve and recycle the value trapped in dead or failing cryptocurrency projects.
With more than 4,500 cryptocurrencies in circulation, there are bound to be many that are functionally dead. This presents many challenges for cryptocurrency markets, as well as for the users of those currencies. Those users have their money locked in a network that doesn’t allow them to transact, or a currency that is not tradeablesrc/
The failure or supposed death of a blockchain project inevitably leads to the mass devaluation and the loss of value invested in its crypto assets. With the crypto space still relatively new and highly competitive already, the competition between similar projects and services for the attention of the media and venture capitalists is really stiff and would eventually lead to the demise of less-sophisticated projects from the race for dominance in their respective niches entirely.
Naturally, this would leave the crypto space with more dysfunctional and redundant tokens and coins than there is right now in the coming years, denying the market of the value trapped up in these projects as they lose traction, liquidity and ultimately, exchange listings.
CoinJanitor steps in at this point to offer a way out for these "bagholders". A chance to restore a part of the value stuck in those crypto assets back into the market or at least give these crypto investors a part of their portfolio's value once again. They will do this by offering to buy out such crypto assets and the entire technology and data that comes with it using their JAN tokens (an ERC20 based token). Communities that reach consensus with CoinJanitor will receive JAN tokens in exchange for their devalued cryptocurrency. It is a win-win solution.
Briefly, let us take a deeper dive into methodology and business model of CoinJanitor.
Methodology and Economic Model
The idea behind CoinJanitor's business model is most often criticized as "somewhat destructive" because blockchains that are bought over will most likely be decommissioned and their tokens completely burned. However, the entire crypto space would be glad to know that this rids the space industry of unnecessary coins and tickers. Morever, the CoinJanitor team has spent months researching and considering possible alternatives to their solution (including putting in more money to develop a redundant project again), and have concluded that this is the best possible solution yet.
Throwing more money and resources into redundant and outdated projects, seeking to revive them, is very capital intensive and might not meet the marked-out targets. But dissolving these projects or amalgamating them with better similar projects will go a long way to supporting growth and development in the general blockchain sector. The data and information and smart contracts retrieved from amalgamated communities will definitely prove very useful and beneficial to related communities.
Thus, the reasons we have to focus on the economics first before promising on the delivery of revolutionary technology to achieve the task at hand. Just like a mop and a bucket are the elemental tools that a janitor uses them to do his/her job, economic forces are the fundamental pillars on which any blockchain or cryptocurrency project rests.Pg. 11, CoinJanitor Whitepaper
The whole business model and methodology of the project places a huge emphasis on the JAN token, as CoinJanitor believes that economic conditions and the token economics (also known as Tokenomics), is very crucial to the success of an innovative technology in the cryptocurency sector. Hence, they are focused on the JAN token and its economics first.
Do we really need CoinJanitor
Following the conceptual description of the methodology, it is very clear that the main component of CoinJanitor is rather purely economic than anything else. although there will be several technical requirements from the team in order to stick to the plan, they will mostly be involved in seeing just how much value they can restore from outdated and redundant cryptocurrency projects; An economic task that no other asset or tool in cryptocurrency markets has tried yet.
However, as far as blockchain-based solutions go, we've seen one too many projects that promise innovation and end up not delivering over the past 3 years, leading critics to question the viability and need for CoinJanitor.
Do we really need CoinJanitor, seeing that the general trend and hand of the free market would obviously force some projects and their tokens into oblivion?
I'd say yes.
Critics are right but to an extent. With the slow decline in the demand of cryptocurrencies of redundant blockchain projects, it is only natural that this has a negative effect on, and leads to the demise of such projects. Thus, reducing the noise and rancour.
However, this is just one perspective. CoinJanitor does a better job at getting rid of unupdated blockchain codebases and cryptocurrencies. They realize that with every failed cryptocurrency project (good-intended projects, that is), there is an amount of money trapped in that may never be recovered. The value trapped in these low-cap, dwindling crypto projects can be really substantial when combined and calculated. Which, in the long term, bleeds the market and takes away value from it.
Moreover, according to several sources on Google's search, It is estimated that over 90% of the current overall blockchain projects might fail within the next 2 years, with over 92% of the projects launched this year having failed already. Should nothing be done to recycle or retrieve the value that will be trapped in, the combined loss in monetary terms could be just as large as the current market cap of the cryptocurrency industry today. This runs into billions of Dollars.
This further buttresses the need and importance of CoinJanitor. Thus ensuring the company a unique name and a niche amongst blockchain projects in the future.
If this project interests you, I'd love to discuss it in the comment section below. Questions, contributions and general observations are welcome.
Do not hesitate to look-up the official links to Coinjanitor's social media handles and materials below. Also, see the explainer video for a quick overview of the project. Thank you.
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