How LockTrip made sure your trust is well placed
In this blog post, we want to look a bit into the past and see how LockTrip conducted its Token Generation Event (TGE). More specifically, how the team made sure that the risk for participants is as low as possible.*
- Low Market Cap
Many projects in the crypto world aim for very high market caps, often surpassing $100M. They even advertise such things like “$50 Million raised already, don’t miss out!”. In contrary, we decided to have a smaller target of only a few millions ($4 million was the endresult).
But why?
Every project has a potential maximum market cap it can reach. So while the total potential is fixed, the only thing that influences your individual potential reward is the percentage of that market cap that belongs to you.
When you buy tokens, you buy a certain percentage of the total market cap. The bigger your piece of the cake is, the better.
Now: If a project aims for a high market cap at the beginning (in form of funds raised), you will only get a small share of the total market cap.
In addition, the project puts you at high risk, because the market cap has to be supported by the value created from the project development.
It’s easier to support a small market cap, which reduces risk and increases upward potential.
The company is never at risk, as they have raised a fixed amount of money.
We believe that the community should be part of the project, and therefore not be exploited. That’s why we chose a small target compared to other projects.
2. Rationality vs. Hype
Hype is a great tool to boost the amount of money raised, by exploiting the emotions of potential participants. This can increase your financial result during the TGE by a few times.
But it comes at a cost.
Instead of an interested community with great quality that adds value to the project, you get daytraders or other mostly project agnostic people who are in for quick money and thus don’t care about the vision or idea of the project.
For us, the TGE marketing was a direct investment into the long term value of the project.
We actively avoided hype based marketing in an environment where the market went crazy and reached new records on a daily basis.
3. Own Investment and MVP
Many projects do start with the development only after they raised money. This increases the risk for investors, as they are forced to value the project based on nothing more than a whitepaper.
Our management however decided to risk their own money instead.
The work on the project started months before, making it possible to launch the marketplace during the TGE. That way, people could base their decision on a real and working product instead of betting on a whitepaper (or relying on luck).
Those three reasons reduced the risks for investors significantly, which probably contributes greatly to the fact that the token price never went below the base price of the TGE.
LockTrip is the first marketplace with 0% commission where you can save on average 20% on your hotel and rental bookings compared to anywhere else. Learn how to buy LOC tokens to enable access to our marketplace and its lower prices here!
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*This article was written by a team member who was not part of the team at the time of the TGE. It is based on observation and gathered information, which can and should not be taken as company statements.
