RE: Hidden potential. CanYa coin

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Hidden potential. CanYa coin

in cryptocurrency •  7 years ago 

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.

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Very interesting. Thanks for sharing.