Token redenomination in my personal opinion has to do with dividing a token such that it has smaller units and can be afforded by smaller investors. It is the act of converting an existing token into a new one in order to gain more investors without the value of that token being changed. There are various cases in which project developers consider token redenomination. One of such case is when they (developers) seek to increase the user base of that project.

Token redenomination may be said to differ from other asset and other currency redenomination in slight ways. Both has to do with dividing or simplifying an asset or currency. The slight difference that exists between them is that token redenomination is concerned with simplifying a token, in order to increase investments in that project, after investors have gotten a letter from the developers of that token. In currency redenomination, the central bank and other monetary authorities redenominates a currency in a bit to combat inflation and protect the purchasing power of money.

No. 2 Mention The Advantages and Disadvantages of token redenomination

The Advantages of Token Redenomination

There are various advantages that accompany token redenomination, these are;

1. Liquidity: Token redenomination helps in keeping the market in a liquid form. Once there are many investors, demand and supply will increase and consequently, liquidity would be enhanced.

2. Project Growth: It is inarguable that redenomination helps in advertising a project and making it popular. Such popularity will help grow the project.

3. Increased Investors: Token redenomination as mentioned earlier, boosts the number of people that would be attracted to that project.

4. It also increases the market statistics of that token like price, market capitalisation, etc.

Disadvantages of token redenomination

1. Token theft: Various fraudulent activities often accompany token redenomination like stealing of tokens by hackers, etc.

2. Reduction in the value of token: A token may lose its value due to charges in the conversion process.

3). Do all cryptocurrency projects need to do Token Redenomination? Explain in your personal opinion

I think all cryptocurrency projects at some point would need to undergo token redenomination to keep the project in shape and gain more investors. Apart from gaining more investors, there are other advantages such as keeping the token market liquid and making that project more developed. This will help enhance the performance of that project and token.

However, project developers should be cautious about token redenomination in order to protect investors from incurring losses in the process.

4). Choose a project that has or is currently doing Token Redenomination and show how to convert old tokens into new tokens. (Screenshot Required)

Pundi X

There are two ways to convert or swap NPXS (old) to PUNDIX; through functionx (fx) wallet and through the official site of pundix. I am going to show how to use Pundi X official site for the swap.

Step 1: Login to the official swap site of Pundi X.

Step 2: Click on connect wallet in order to connect the wallet you have the token (There must be ETHER in the wallet for gas fee). There are provisions for various wallets like metamask, walletconnect, etc.

Step 3: Approve the NPXS that you want to swap to proceed to the swap process. You will be shown the gas fee.

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Step 4: Place your swap order.

Step 5: Token will be successfully swapped.

5). Analyze whether the token from the project you chose in question number 5 is worth investing in. (Screenshot Required)

Image reference

PUNDIX is a good investment. The token has soared and is currently doing very well after the redenomination. It has a circulating supply of 258,491,637.23 tokens.

PUNDIX market capitalisation as at the time of writing is $317,526,277, and a fully diluted market capitalisation of $317,569,273.

It has a current price of $1.23 and is ranked #235. PUNDIX 24hour trading volume is $27,554,565.

The market capitalisation, trading volume and supply of tokens has proven that the token has a high liquidity.

Hence, I would say that PUNDIX is good for investment.

6. Conclusion

Token redenomination is a great idea often conceived by project developers to grow their project and increase investments. As reviewed, it has some great advantages that cannot be concealed by the few demerits involved. Developers should try to improve on their projects once in a while by initiating token redenomination. However, investor protection should not be overlooked.

Thank you so much for your time.