The Digital Assets Power Play (DPP) Crowdsale tokens
a distributed economy made right Part 1/2
Current state of Crowdsale tokens — ICOs
As we have seen a tremendous influx of the crowd token sales (ICOs) over last several months, we believe that most of these companies are bypassing opportunity given to develop a distributed economy and are just going after fund raising, without consideration of how to build a distributed self-sustaining economy based upon tokens issued and stakeholders.
Most of these companies are building a service within blockchain/krypto space without considering all stakeholders and their requirements, usually limiting token as service provision to a single stakeholder, limiting token utilisation and mis balancing supply and demand of the token itself, excluding speculative trading on the exchanges. Without balance of token supply and demand, either inflationary or deflationary pressure will decrease the value of the token or services themselves, thus greatly impacting many of these crowd sale tokens, leading them to a flop.
Additionally many of the crowd sale tokens are not clearly stating to the investors what their intrinsic value is and what exactly do tokens represent within company’s balance sheet.
In our opinion a set of guidelines should exist when one designs a crowd sale token:
· All stakeholders need to benefit by the provided services of the distributed economy.
· Self-sustaining economy. Economy should be made a self-sustaining even without any external influences, by means of token utilisation and value transfer between stakeholders. If that is not the case it is questionable if companies should issue tokens as a means of fund raising.
· Directional or bidirectional token utilisation. One needs to consider will tokens be utilised by each stakeholder. Whether they will be a buyers or sellers only and if both.
· Transparency, or lack of thereof. We propose that all future token crowd sales transparently communicate use of their proceeds and allocation of digital assets and at any given time a total digital assets and fiat currently owned by the company. Companies should publish relevant KPIs.
· Burn-out rate. We propose that companies publish on a monthly basis their burn-out rates and transparently communicate them to the community. The best way would be through a monthly P&L.
· More precise definition of what does a token represent within company’s balance sheet structure and communicating financial statements back to the community.
· Blockchain, smart contract, ethereum, DAO, … — better definition of how these technologies will be used to provide services and will be related to the token itself.
As such we will try to address these issues when designing our tokens and the distributed economy around it and communicate set out guidelines.
Designing a token for the stakeholders benefits
Within Digital Assets Power Play (DPP) we are striving to build a new self-sustaining economy, providing the services and the solutions to all of our potential stakeholders; strategy developers & owners (including digital asset managers), investors and software developers.
Vision is to provide all stakeholders with direct benefits by being a part of the distributed rather than traditional economy.
Within the traditional economic model transactions were conducted between two parties, where one party always had an upper hand over the other in the resources, knowledge and the operational excellence, thus benefiting in the long run and generating a profit when dealing with the counterparty. In the distributed economy stakeholders are organised in the distributed manner with an equal distribution or access to the resources, knowledge and the operational excellence, with an understanding that they will all benefit from a mutual cooperation, enabling upper hand over other (traditional) market participants.
By having the DPP tokens as both underlying asset value and a means of payment and the value transfer between the stakeholders, the proposed distributed economical system becomes fully self-sustaining, whilst increasing value of its assets and thus token value.
We can claim that platform will be self-sustaining, as algorithmic strategies will be backed by the Public Wallet, profits shared with the strategy owner and returned to the public wallet, increasing its assets size and importance. Additionally developers and strategy owners will charge fees, receive payments in tokens and be able to reinvest these tokens.
Our competitors are not other blockchain market participants, but instead the Wall Street, the City and other traditional financial institutions, as we are striving to democratise the Wall Street.
In a current market state and especially in the traditional investment economy, upper hand is with the large investment banks, algorithmic traders, asset managers and the market places, not with the small participants including smaller investment assets managers, individual investors and the traders & developers.
By providing digital assets automated (algorithmic) trading to the masses alongside assets and platform services we will enable a level playing field and enable smaller shops, asset managers and developers (strategy and software) to compete with the big boys.
We anticipate that the stakeholders require following benefits and corresponding token utilisation:
· Investors — will be able to invest DPP tokens into different strategies, alongside other ERC20 tokens and Ether. All other kryptocurrencies will be acceptable and converted by the platform into tokens and paid into strategy wallets.
· Software Developers — will be able to charge and receive payments in DPP tokens, and reinvest DPP tokens.
· Strategy owners — will receive assets in DPP tokens from investors, will receive funds from Public Wallet in DPP tokens, will charge their fees in DPP tokens, will make payments to software developers in DPP tokens and will be able to utilise DPP tokens as a means of direct ERC20 token conversion whenever made available by the platform (tokens will be utilised to pay fees)
The DPP tokens will fuel such a distributed economy, and be utilised as:
· Tokens can directly be invested into strategies and investment products offered on the platform
· Tokens will represent underlying asset value of the platform representing a true intrinsic value
· All fees stated on the platform will be payable in tokens. If no tokens are available they will be automatically converted from other krypto currencies, ERC20 tokens or Ether, and enforced by the smart contracts. Fees will be payable both between different stakeholders directly and between stakeholders and platform itself.
· Tokens will be used as a means of FX between other krypto currencies, ERC20 tokens and Ether.
When designing the distributed economy and the digital tokens one has to look carefully into the supply and demand of the tokens, not having it either too inflationary nor to deflationary.
As such we have designated that tokens are to be both bought and sold by all the stakeholders including platform itself leading to a self-sustainability.
Part 2/2 is published, read it here.