CATS milestone

This week I reached the milestone of 20 CATS on steem-engine. I bought 1 CATS back in October with spare STEEMP from selling other meme tokens, then I bought my third and fourth CATS after selling more meme tokens in November before beginning of my first week-long s-e tokens experiment. All the other CATS I made by exchanging KITTENS for CATS.

Off-chain cat (Collie) - love-heart paws

Why is 20 CATS a milestone?

CATS is a token that produces 1 KITTENS each day - CATS is a ‘mining’ token and KITTENS is the ‘mined’ token. Users can exchange KITTENS for CATS at the exchange rate of 20:1 by sending KITTENS to the steem account @catsmakekittens with a memo detailing what you expect in return - for example, sending 20 KITTENS in exchange for 1 CATS. It takes a day or two for you to receive your CATS as it’s a manual process so bear this in mind when calculating expected returns. I could have just bought 20 CATS to begin with but what would have been the fun in that? Pretty much everything I ‘invest’ in crypto is in very small amounts so I can learn more about how the technology can be used and also how markets work. Funnily enough, my heart skips a beat even when I am making trades for pennies!

So now I have 20 CATS these cuties will produce a combined total of 20 KITTENS each day - yes, I can trade them in for another CATS!! I won’t be doing this every day because I don’t want to bother the CATS elves behind the trade that have to manually process it so I will save my trades for once or twice a week. The point is that I can increase the size of my CATS bags much faster now. This means I can periodically offer some up to the market for STEEMP and know that they will still keep multiplying fast! Even if I sell CATS significantly cheaper than what I initially paid on my initial investment, it should not matter because they multiply so fast!

Why would you want to hold CATS tokens?

Because CATS make KITTENS. And you can trade your KITTENS for CATS. And then you will have more CATS to make KITTENS. You can sell them for STEEM and power up.

I have read that the @catsmakekittens project is associated with the @neoxian.city project. A benefit of being a CATS holder is getting a more generous reward of NEOXIAN tokens which is pretty cool. I still haven’t figured out why one would want to hold NEOXIAN tokens but I know that smart people on steem are big holders of NEOXIAN so I am happy to earn more by holding CATS.

Watch for arbitrage opportunities

—> if ((highest bid CATS) > lowest ask KITTENS * 20)
BUY KITTENS and/or SELL CATS

—> if ((highest bid KITTENS * 20) > lowest ask CATS)
BUY CATS and/or SELL KITTENS

This. Sometimes it makes sense to sell KITTENS instead of CATS or vice versa. For example, if I wanted to take profit and the price I can get for CATS is 0.1 STEEM and the price I can get for KITTENS is 0.01 STEEM. Don’t sell CATS, sell KITTENS instead because in this scenario the value of CATS is only 10 times the value of KITTENS and you can trade 20 KITTENS for 1 CATS! Capiche?

I did this. The other day I had 17 CATS and 60 KITTENS. I was about to send 60 KITTENS to @catsmakekittens with a memo to say that I expect 3 CATS in exchange. Instead I noticed that the highest bid for CATS (0.1 STEEM) was greater than the lowest ask for KITTENS (0.00484 STEEM) * 20. So instead I sold 5 CATS for 0.5 STEEM and bought 100 KITTENS for 0.484 STEEM. Just because I could and I wanted to test the waters. I then sent 160 KITTENS off to get the last 8 CATS to get me to 20 CATS in total, which is where I am today.

Learning about how markets work ...

The value of 1 CATS is greater than ...

20 KITTENS!!

What do I plan to do with my CATS and KITTENS?

Hodl for three weeks out of four. At the end of the fourth week I will sell all the CATS/KITTENS I made during the week. Rinse and repeat. Maybe if I end up with a crazy amount of CATS I could do this more often. I will decide if/when I get to be a crazy CATS holder.

The risk

CATS have no intrinsic value. Let’s be honest, they’re meme tokens. I don’t expect the novelty to last forever. I could end up holding big bags of CATS and their value goes to near-zero. That’s why I plan to periodically sell some CATS to ensure that I get some return on them. However, if everyone else is thinking the same we will have more sellers than buyers which will bring the price towards zero.

As an aside, I have noticed that witness @untersatz appears to have close ties with @catsmakekittens :-)

TLDR: In my experience, trading CATS and KITTENS (@catsmakekittens) is a fun way to learn about the power of compounding and markets.