Our Ecosystem Detailed: Demand & Supply
Episode 4 of an on-going series of articles
A deeper look into the workings of Tael and Techrock.
Tael is on the verge of a new phase focused on adoption, sales, and real-world usage. For you, as a Tael (ticker: WABI) token holder, it is important to know how Tael and Techrock each play their part in the ecosystem and how our real-world sales and partnerships translate to you.
Over the coming weeks, we will publish several articles on major aspects of our ecosystem, detailing how things work.
Creating a system of naturally positive demand.
Tael’s usage as a loyalty token opens the door to unseen levels of mainstream adoption due to the fact that no technical know-how is required of the user. The concept of loyalty tokens/points is ingrained in the spending habits of most consumers today, and the Tael system of accumulation and redemption has been made to be as user-friendly as possible, placing us on track to become one of the most adopted tokens in the world.
For Tael to thrive as a token, however, it must exist in a healthy system of demand and supply.
We’ve created a model in which the circulating supply of Tael decreases through general usage (holding Tael until next purchase) while at the same time encouraging the demand for Tael to continually increase.
This article focuses on how we allow the Tael token to prosper.
The Tael token in action: a brief recap.
To understand the demand and supply economics of Tael, it is first necessary to understand the flow of Tael in the ecosystem. The graphic below shows one of the ways Tael is already being used, from the moment the consumer acquires Tael until the moment they spend it in the ecosystem.
What drives the demand for Tael?
There are four main forces driving the demand for Tael:
- Our product category demand.
The Chinese market for infant formula, nutritional supplements, premium cosmetics, and high-end alcohol products totals well over $100 billion.
- Size of the target market.
The total amount of consumers in our target market measures up to over 250 million people, which covers almost 20% of the total population of China.
- Combined e-commerce spending.
In China, 53 percent of cross-border e-commerce shoppers spend more than 10,000 yuan ($1,468) on goods a year. Furthermore, 15 percent spend over 20,000 yuan ($2,936). Spending power is increasing and consumers are comfortable with the concept of cross-border e-commerce.
- Marketing budgets of brands & merchants.
Through the usage of Tael, brands & merchants are able to deliver superior targeted sales and marketing messages to consumers. Usage of Tael would fall under their marketing budgets, which generally accounts for 20%-30% of annual sales.
On the consumer side, we are tapping into a massive guaranteed market of e-commerce savvy consumers with an established demand for the products we provide. By offering verifiable authenticity, we gain the edge on competitors, especially given the sensitive nature of critical goods such as infant formula, supplements, alcohol, and cosmetics.
On the brand & merchants side, the unique data benefits, the ease of integration, and the enhanced opportunities for direct brand-to-consumer communication spur the usage of Tael.
What affects the circulating supply of Tael?
The total supply of Tael is 100 million. There will never be more than that in the circulating supply. The circulating supply of Tael is reduced when Tael are held (or even permanently lost) in the wallets of consumers.
There are three ways in which Tael’s circulating supply are reduced:
- General customer usage within the ecosystem.
Customers purchasing products in the Techrock marketplace are rewarded with Tael. These Tael are held until they are redeemed during a future purchase. Until that time, these Tael are effectively ‘locked’. This will be a major driver in reducing our available supply.
- Customers leaving the ecosystem.
If consumers leave our ecosystem, their loyalty tokens remain unspent, effectively rendering these tokens ‘lost’. In essence, this makes the users lifetime Tael holders.
- Customers engaging in the ecosystem’s gamification.
We expect that a percentage of our consumers will hold (and accumulate) loyalty tokens for the express purpose of seeing the value change. This will be a minor driver in reducing our available supply.
On a consumer level, the intended everyday usage of Tael affects the circulating supply. New users are constantly brought into the ecosystem and rewarded with tokens. This accumulating, redeeming, and holding of the tokens organically reduces the circulating supply.
On a value holder level, the gamification aspect of loyalty tokens with a fluctuating worth will encourage some to hold their tokens for extended lengths of time.
High demand for Tael + declining circulating supply = naturally positive demand.
Due to the demand for Tael and the inherently declining circulating supply, we’re guaranteed a naturally positive net demand, regardless of speculation on the cryptocurrency markets. The model we’ve created all but assures a bright future for the Tael token in a healthy ecosystem of organic growth.
And all of that… by simply touching to authenticate.
[Note: for simplicity and understandability’s sake, the terms Tael & Shijifen are occasionally used interchangeably. Please read about the specific usage of both terms in the linked article to avoid confusion.]
Stay tuned for more episodes detailing our ecosystem.