According to the Token Report
Of the 226 analyzed completed ICOs, only 10% of the tokens are actually used in the internal ecosystem.
The vast majority of ICO projects collect revenue via speculators who excite the market without real economic value.
Under these conditions, it is impossible to make a long position investment, which is why ICO is perceived by the public as an extremely questionable mechanism, often identified with a financial pyramid.
Token booms (hype), promising incredible revenue, much higher than provided by traditional investments, form the current price of the tokens, which is tens of times higher than the fair price. A financial bubble is created, inflated, and it subsequently bursts. In such circumstances, some investors who managed to sell “empty” tokens in time gain profit, the rest suffer losses.
In this situation, tokens which have real economic value become even more lucrative for the investor, as having the real economic value causes a smaller gap between the current and fair prices.
These tokens should be embedded in the project’s internal ecosystem and provide benefits with real monetary value available to the clients when used in this ecosystem.
Here is an example of several ICO projects out of the 10%, where the tokens are not only traded but also used:
- Storj project — you can pay for the volume of cloud storage used with the project tokens;
- TenX project — token holders receive an interest bonus on transactions made in the payment system;
- Augur project — token holders increase their reputation and thereby increase your share of the platform’s trading fees;
Tokens of these projects allow platforms’ clients to receive real benefits for using tokens in the business model, which means they promise long-term benefits that have nothing to do with speculation. Such tokens have an economically justified fair price, based on the holders’ future earnings.
These tokens are utility tokens, they are meant for users and long-term investments, and not for speculators and short-term arbitrage.
Bonum Team
