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RE: Hidden potential. CanYa coin
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.