Supply and Demand: Examining the Potential of the Safex Token

Some of the most famous words of all time from a great entrepreneur and one of the founding fathers, Benjamin Franklin, were “time is money.” Franklin was right, since 99% of everyone around us makes this very exchange, as when we work, we are exchanging our time for money. However, what if you could have money without exchanging your time just to make a few bucks? This is what is known as passive income. Passive income is, as obviously stated, income that is earned without putting any or very little amounts of effort. Examples of passive income can be rental income, property appreciation, even slowly gaining Aeromiles or cashback rewards on a credit card. However, one of the most popular forms of passive income is incentives paid out by companies, which are paid out in the form of cash or additional shares by companies to shareholders on a quarterly or monthly basis. For those of you already familiar with the Safex project, you understand (hopefully) how the incentive system works. For those of you who are new to Safex or maybe just don’t fully understand how incentives work with Safex, there are plenty of articles, especially this one by Safex’s lead economist, Ivana Todorovic, that explain how they work. The whole point of this article, however, is to explain why Safex’s nature in terms of the market it’s tackling and based on its competitors statistics, as well as other factors, give it the raw potential to become a leading power in cryptocurrency and international E-Commerce alike.

Token Value

The token is the first part of Safex’s dual currency system. They act as shares in a company would; they are what distribute market generated incentives to investors, allow for accounts to be created on the Safex Marketplace, and serve as the payment for locking and unlocking your tokens to take them out of cold storage and make them active trading coins again. At the time of writing this, the token currently sits at a price of $0.00757 USD. Now, this price may look bleak to new investors, since a quick glance may cause them and even experienced Safex investors to feel down and out. However, I believe the current price of the project can be attributed to three factors.

• Low visibility/Low demand: As of right now, the Safex OMNI Token is only listed on Trade Satoshi, while Safex Cash is listed on Instant Bitex and Coindeal. This is causing a lack of knowledge about the project, which will be corrected once it gains more listings over time.
• Lack of clarity regarding supply: As of right now, CMC displays our circulating supply as just over 1.5Bn tokens, which is not only inaccurate but also not fixed as the supply will decrease dramatically post migration and over time.
• Marketplace & Incentives: An obvious reason, we need the marketplace and Safex Cash Incentives to be initiated in order to see demand increase and supply decrease as tokens get locked in.

Normally, you would multiply the price per share by the number of shares a company issues in order to give you a market capitalization of the company, which is essentially a value of the company. However, for the sake of comparison, we will change the formula up to find the possible price per token based on what the possible future supplies of Safex can be and based on the current and ATH Market Caps of other companies in the current E-Commerce sector.

Safex currently has a total supply of 2,147,483,647 tokens. This supply is precisely why the Safex token is so low currently. However, if you take a coin such as ZCash the price would be much higher. If the Safex token had a supply identical to that of ZCash, 5,493,506, 1 Safex Token would be worth around $2.04 USD. However, Safex has a much bigger supply, and much less demand at this point in time due to the above three factors, which is why the price is so low.

Now that we have established how to calculate token price, we can calculate, based off future supply factors, the current statistics and future predictions of E-Commerce Market Caps as a whole, why the Safex token can be valued at so much.

First: Initial blockchain migration will cause our 2.14 billion supply to drop quite a bit. Dan and the team estimate around 5–20% of the current supply will be lost and based on these predictions that will leave us with a total supply of anywhere between 1.6–1.9 billion. That’s already a huge drop in supply. Furthermore, we have to keep in mind that every unlocking and locking of tokens burns 1 Safex token each time, and every title market created burns 200 tokens. This will also continuously decrease the total token supply over time.

Second, and arguably the biggest impact: Locking in. As with most cryptos, there are two types of supply, available and circulating. When tokens are LOCKED, those coins are not trading on exchanges, and therefore will NOT be incorporated into the calculating of Safex token price (Read: Circulating Supply Section 7), meaning that when tokens are locked in, only whatever is trading on exchanges will be calculated which will further reduce the already cut down supply dramatically. If for example, 90% of tokens are locked in, and only 10% are actively trading, that means that our supply at whatever given time that that amount is locked is 90% less of our total supply, making the price of the token skyrocket purely due to scarcity. I will expand on this specifically below.

Third: Current E-Commerce markets caps, those of Amazon, Alibaba and even smaller ones like Kijiji and Shopify, are in the high billions, and are only projected to rise higher, as the current top 30 companies total E-Commerce MarketCap is around 3.4 trillion dollars USD, which represents the majority of the market. E-Commerce is only predicted to grow more, and with the fact that trade is only growing, it is natural to assume the market will grow. To quote Patrick Curtis, “Clothes, shoes, glasses and just about everything we thought would never move fully online will all be online. The reason is simple: why leave the comfort of your own home when you can get something custom made to your exact size for less? I believe this is the future.” Because Safex is planning on taking on every aspect of commerce, plus the fact that it pays out daily incentives (passive income) it gives us an even better chance of becoming a true economic powerhouse.

Example equation: Let’s say that the post-migration total supply of Safex is around 1.9 billion (1,900,000,000). Let’s say that in three years after MP, there comes a time where 90% (1,710,000,000) of those tokens are locked in, leaving only 10%( 190,000,000) trading on exchanges. This means that our new available, circulating supply is 190,000,000. Let’s also say that Safex has reached a market cap of half of Ebays current market cap. We now have a circulating supply of 190,000,000 and a market cap of 44 billion USD.

$44,000,000,000/190,000,000=$231.4

So if at any given time, 90% of tokens are locked in with a total 1.9 billion supply, and a market cap of a mere 44 billion USD, one Safex token at that time would be worth $231 USD. Because the general sentiment of Safex tokens are to HODl and collect dividends rather than sell, it is evident that we will see long periods of time where the supply of tokens may be in the tens of millions, if not millions. This would be due to prosperous incentives and a bustling marketplace which would cause token-holders to lock down tightly on their bags.

Further Case Studies:

Safex Market Capitalization: $1,000,000,000

CIRCULATING Supply: 150,000,000

Total Supply(Post Migration End): 700,000,000

Token Value (USD): $6.67

This example shows what the token value would be if Safex was only valued at $1,000,000,000 USD with a circulating supply of 150,000,000 meaning that 550,000,000 tokens are locked in while the 150,000,000 are trading on exchanges.

Safex Market Capitalization: $26,950,000,000 (Approx.)

CIRCULATING Supply: 1,717,000,000

Total Supply: 1,717,000,000

Token Value (USD): $15.69

This example demonstrates what the token value would be if Safex because as popular as a mid-range, average Market Place such as E-Bay, but with a very high supply which assumes that nobody locks in their tokens, which we all know is the farthest from what will happen.

Safex Market Capitalization: $362,000,000,000

CIRCULATING Supply: 750,000,000

Total Supply: 1,950,000,000

Token Value (USD): $482.67

This example demonstrates what the token price of Safex would be should we accumulate a Market Capitalization of only half of that of Amazon’s current market cap, while also assuming that nearly 2 billion tokens migrate and that of those nearly 2 billion, only 38% (750,000,000) are not locked in.

Now from all of this, you can hopefully see the raw potential behind the Safex token and that it’s not as impossible as it may think for it to be so valuable. I encourage you all to do some more research into the potential of the token, but this article was a summary and comparison of what the potential prices are that Safex can reach based on the companies it is trying to compete with and the market it is taking on. But then again, my sentiment is like the rest, I’m HODLING for incentives.

DISCLAIMER: I am not by any means a financial analyst, certified crypto analyst or any other professional certifications. This article is simply a comparison based on the companies that Safex is competing with and an analysis of what the token can be valued at assuming the marketplace succeeds.