Far too often, the tokenomics of certain projects is approached with unlikely disinterest from their investors. A piece of data that is nevertheless essential since it allows to estimate the actual upside potential – outside of all fantasy – of his favorite cryptocurrency.
And the best example of this type of cognitive dysfunction remains the Shiba Inu token (SHIB) whose investors were constantly shouting at a price of $1, when that would require its capitalization alone to represent more than 500 times that of the entire cryptocurrency industryBitcoin included…
Because the real strength of this digital economy is based on effective and (almost) total transparency. Indeed, the distribution of the funds involved in the creation of a new project is subject to an official distribution and a timetable set within the framework of a road map. And in some cases this may involve the implementation of successive releases in the form of procedures called “token unlock. » A spill that, mechanically, can imply a significant drop in the price of certain cryptocurrencies.
Optimism – A quantity in circulation multiplied by 2
It should therefore be understood that not all projects automatically distribute all of their cryptocurrencies at once. Sometimes, some launch even before officially having one and then proceed to the famous airdrops intended to reward their effective users. And others set up release procedures in successive stages. This most of the time in order to protect the price of their cryptocurrency from an excessive resale campaign carried out by the famous resellers of airdrops (dumpers).
A strategy favored by layer 2 Optimism. This is part of a period of “vesting” which comes to an end at the beginning of the week. That is, a staged payout of OP tokens to its investors (182.5 million units) and development team (204 million units). But this desire to protect the market of its cryptocurrency comes up against a fact impossible to ignore for its current holders. She alone represents an amount greater than the amount already in circulation (335.38 million units). Whoops !
« Optimism will unlock 9% of the total OP supply on May 30. It will be unlocked first for the main contributors, then for the investors. The potential selling pressure will be around $600 million. »
As a result, the quantity of OP cryptocurrencies will simply double at the start of the week. And the impossible question to ignore is whether its market is able to absorb this spill of 386,547,056.64 additional units without collapsing, even in the short term. Of course, it is not in the interest of the beneficiaries of this distribution to lower the price of this token that they have just received. However, the latter – like the famous Andreessen Horowitz (a16z) – are already performing more than 500% at its current price. There is therefore room for doubt…
June – The month of the release of cryptocurrencies
A procedure carried out by the Optimism project which onlyannounce more for the month of June. Indeed, several cryptocurrency blocking periods are coming to an end in the coming weeks, or even the next few days.
And while the impact will undoubtedly be smaller than for the OP token, in terms of the percentage of the available quantity involved, these spills need to be considered by investors. Especially in the case of the 1INCH DEX aggregator which performs the largest operation of its kind with an amount equivalent to 16.65% of its supply (249.8 million 1INCH cryptocurrencies), according to data published by the CryptoRank platform’s Twitter account.
But again, these figures must be observed with the principle of tokenomics still very much in mind. Because some of these releases seem anecdotal. Yet they still imply amounts that can be counted in hundreds of millions of units, or even in billions for the Hedera “blockchain” and its HBAR cryptocurrency (1.27 billion to be precise). But after all this only represents 2.55% of its quantity in circulation already estimated at… 31.45 billion units. Suffice to say that this can (largely) explain the low price of HBAR ($0.05).
It is therefore very important to be familiar with the tokenomics of cryptocurrency projects before deciding to invest in them. As much as it might be worth waiting for these kinds of spills to get in there. In particular in the case of even a temporary drop in its price triggered by the drowning of its market. But there again, the game remains risky and quite random…
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