Token Metrics Comparison
Innovators In The Game
With the market for cryptocurrencies suffering currently, and the number of projects increasing, certain projects have upped their game when it comes to token metrics and tokenomics. For now it looks like the era of simple private sale and public sales with instant releases are dead.
BGogo, PundiX, and Gamechain all made or are making improvements to the ICO process in the form of superior and innovative token metrics. Below I will briefly outline their strong points.
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PundiX was one of the first to change the game in token distribution methods. Instead of all tokens coming onto the market at once, or large scheduled bonus payouts, the PundiX distribution is simply done every month over a 3 year release program, with each holder getting around 7% extra tokens on their current balance. The aim of this was to smooth out price swings and reduce supply in the early days.
The tokens used to pay on the network, are held by POS operators, and offer price discounts in real stores when paying. Pundi gave a lot of thought to their tokenomics and distribution and were ahead of the time in what they did here, while most projects were simply releasing most tokens on day 1, with huge bonus dumps coming in 6 months or 1 year.
The idea of this was to entice holders to keep on holding. And this obviously worked in the early stages, allowing for the token price to run 10x. However the problem with the approach is that anybody buying the tokens on exchanges will get these rewards, and they are not exclusive to early buyers, meaning that the earliest buyers at ICO did not have enough reasons to hold. It was more profitable to sell the tokens high and buy them back low.
GameChain is an interesting project aiming to build an entire ecosystem for gamers and game developers. It’s a protocol with smart contracts, atomic swaps and toolkits to help developers build and distribute their games.
Gamechain seems to have taken inspiration from PundiX but they’ve made some interesting changes. The distribution is over a 2 year period instead, with huge holder rewards at the beginning and gradually tapering out as more supply comes onto the market. From this alone, someone buying 1,000,000 tokens at ICO would own 4,000,000 after 2 years. Anyone who buys tokens at any point will get these airdrops based on their wallet balance.
On top of this they have added a separate reward structure, which rewards only those who buy at ICO and do not move any tokens from that wallet, known as the “Last Man Standing” program.
There is a pot of 10% of total token supply allocated to this, and it uses monthly airdrops to reward ICO buyers who have not sold. If anyone sells then they no longer get these rewards, and furthermore anyone else still holding since ICO then gets these rewards instead.
What Pundi did was great but it wasn’t enough. This method actually makes it competitive, and it rewards only those who are most committed to holding the tokens.
All of the bonuses given at ICO time also come in the form of this “Last Man Standing” reward program. For those with a higher tier, they get more rewards in the form of a multiplier on monthly payments up to 1.5x. This means there are no large bonuses being dumped on the market, because in order to get their bonus, each participant must continue holding!
All in all, if someone bought at ICO, got a tier 3 bonus (1.3x), and continued holding, then they would get: 1) Basic holder rewards, 2) Last man standing rewards and 3) 30% extra last man standing rewards, all given monthly. All of these combine to provide a very big incentive to hold, and therefore should greatly reduce the number of sellers. With all this, in my opinion, GameChain have innovated in the token metrics space in their own way.
Bgogo is planning to be a next generation crypto exchange, but most interesting are their tokenomics. First of all they will have a whole bunch of tokens locked up in their supernodes, which receive 20% of all trading fees and get voting rights on who is listed to the exchange. These nodes will change every 90 days or so, but it is important that they will have to hold and stake tokens.
Every 24 hours Bgogo will use all of the trading fees accumulated from a trader to repurchase BGG tokens. In addition to this, traders on the platform using the BGG token will actually have negative trading fees for a set time (a 105% rebate). 50% of the total supply is reserved for this process of “mineable” tokens, and there will be regular BGG buybacks added in every 24 hours.
The idea is that users trading on the BGogo exchange will pay trading fees to BGogo (in the form of ETH, BTC etc.) and in return they are rewarded with BGG tokens, which will be mined into existence by the users’ trading activity. The team will then be regularly buying back these BGG tokens on the exchange.
So the only way for the public to get the BGG tokens is to either trade to mine them, or to buy them. The rate of BGG reward can change, but will always be equivalent to at least 100% of the trading fees paid for as long as the tokens are being mined. Once all the tokens are mined, it looks as if the team will continue doing buybacks of BGG.
This obviously creates a great incentive for traders and market makers to get onto this exchange and create volume, but most of all it gives a very real incentive to hold BGG, given the extremely regular buybacks of the token. The only issue is, it is unclear how long the team can continue buying back tokens, because they might end up taking a loss.
However at least for some period, this is basically a token for which someone has all but guaranteed to buy it and to hold up the price, which makes it a no-brainer and a clever method of enticing people to hold. And as more people are enticed to hold, there will be less supply on the market and the team’s buybacks will be easier, pushing the token price further. Nobody so far has been this in-depth and clever about incentivizing holding.
It is clear that the crypto bear market is forcing innovation as projects attempt to make themselves look more attractive. We are seeing new tokenomics that look like great deals, and are very enticing opportunities for buying and holding. If the markets do turn around, tokens having these kind of incentives will be the ones that do the very best.
The three projects mentioned have certainly been creative with their incentives program in this bear market. However, if you’d ask me, I am looking most forward to Gamechain. Given the fact that there is no clear ICO date yet its absolutely under the radar. Their formula so far gives the most value for tokens bought and held for a continuous time. This can be especially beneficial in such a bear market, as nobody is looking forward to invest into ICOs right now.
The projects reaping the most returns after token release were ICOs in the short September bear market when bitcoin went from $5,000 to $3,000. Biggest gainers were of course Icon and Wanchain, but also many other projects like Salt, kyber network etc.
The explanation is very simple. ICO’s have a hard time to reach their hard cap during a bear. Most projects burn unsold tokens and therefore reduce the total circulating supply, while not many people are interested. Once the bear is over, people start to fomo into projects again and market buy way above ICO price after token release. That’s what we have been seeing in 2017 all year long and it will happen at some point again.
I am not sure yet if I will invest into any of the upcoming ICOS, but I suggest you join their Telegram Channel to keep yourself informed and make a decision based on future update and market conditions.
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Disclaimer: This review is published for information purposes only, not an invitation to invest. Please consult an expert before investing.