Meta Tower burning mechanism

In this article you will get to know another mechanism (apart from MT staking) in the Meta Tower ecosystem, that ensures the growth of MT tokens price (V1 token). At the same time, it gives you an interesting opportunity to get MTFi tokens early (V2 token). We get to know about this feature from an official article and document about a huge ecosystem update — be sure to read it too! As always, remember that this is only my unofficial analysis and in any means financial advice.

Convert V1 to V2

One of the features that the new ecosystem offers to MT holders is the possibility to exchange your MT tokens to MTFI tokens directly through Meta Tower’s launchpad. Bullish news for MT holders is that the converted MT is being burned! Any MT converted to MTFi ends its existence, lowering the supply of MT token. This of course increases the scarcity of MT token and as a consequence — its price.

As one of a few other methods of getting an MTFi token, this option has a limited pool — it will run out at some point. The max amount of tokens to be exchanged this way is 25M, which is 10% of MTFi max supply. Every method that enables you to get MTFi before its public launch has its own vesting. If you decide to swap MT for MTFi you will not get all of your MTFi right away — 20% of tokens are released at TGE. There is a cliff of 2 months followed by 5 months vesting. The tokens of such early investors are unlocked with time, to lower the sale pressure and prevent the price drops.

This is a great option in several cases. For example:

• If you have already invested in MT, you don’t want to spend more money, but you would like to have MTFI as well — you can split your investment and exchange some of MT for MTFi. You don’t need to sell the MT and then buy MTFi — you can swap directly. This way you will not affect the price of the MT token when selling.
• If you are late for the presales of MTFi tokens and there are still tokens available in “convert V1 to V2” pool — you can buy MT token and then swap it to MTFi.

The exchange rate

There is one catch though — which is super bullish for MT holders and a bit less optimistic for people that want to convert MT to MTFi as fast as possible. It’s the exchange rate at which you convert MT to MTFi. The exchange rate is 1:1, but it’s expressed in USDT! The price of an MTFi token is fixed at $0.144 per 1 MTFi. MT token is already on the market and its price changes. This makes the exchange rate dynamic as it depends on the price of the MT token. At the moment of writing this article (beginning of April) the price of MT token is around $0.0001. This means that to get 1 MTFi token you need to convert 1440 MT tokens. Max supply of 250M for MTFi and 1.5B for MT makes the MT supply 6 times bigger. You can see at first glance that something is off — you must convert 1440 times more MT tokens than you will get MTFi, but the supply differs only 6 times? With this price of MT — yes. I’ll tell you more — it is not possible to empty the MTFi token pool with this MT price. There is 25M MTFi in the pool. If 1 MTFi = 1440 MT, then to get all 25M tokens from the pool you need: 25M * 1440 = 36B MT tokens. Yes, you need 36B MT tokens to empty the pool, but the max supply of MT token is only… 1.5B!

MT price must grow

Why is this bullish? I believe that the Meta Tower needs this MTFi in the circulation for the system to work as intended. Even if some people will convert MT tokens to MTFi at the current very bad rate — it is simply not possible to get all these tokens out of the pool now as there are not enough MT tokens. The price must grow. The team must do whatever it takes to get the price of the MT token higher, because as for now the simulated system will not work properly. The news that the team is highly motivated to rise the price is great news for MT token holders.

What price makes sense then? 25M of MTFI with a price of $0.144 are worth 3.6M USDT. If all of the 1.5B MT were about to be converted to 25M MTFi then 3.6M divided by 1.5B gives us the price of $0.0024. The price of MT needs to grow 24x so that the pool of MTFi can even be emptied. Of course not everybody wants to convert MT to MTFi. Some want to stake MT for its amazing “MT price rice loop” and rewards (read article), some want to trade etc. Assuming conversion of 0.5B, so ⅓ of all tokens, MT needs a price of $0.0072 to empty the pool. I don’t think that this much will be converted, so assuming 200M converted $0.018 is the price target for MT token to get all tokens from the MTFI pool. One last logical question is: “at what price am I gonna get the same % of supply after conversion” — so if someone is holding 1% of MT supply, and wants to change that for holding 1% of MTFi supply. Then all 250M of MTFI max supply at a price of $0.144 is worth 36M USDT. By dividing 36M USDT by 1.5B MT token supply — we get the price of $0.024 per MT. Which means 240x for the MT token!

Conclusion

I hope that after reading this article you understand my point of view why this mechanism is so bullish for the MT token price. Not only during the conversion the MT token is being burned, lowering its supply, but the price of MT needs to get higher so that MTFi from the pool can be unlocked. Both tokens are important in the system. MTFi needs to be unlocked for the system’s success which will motivate the team to ensure the MT price growth.

See you in the next articles!