The Value of a Cryptocurrency and Additional Issuance
Summary
- UAICO is a new ICO model that allows additional issuances of a currency.
- Since all invested funds are used as the underlying asset, any additional issuance of a currency is less likely to cause the price to fall. (It may even cause the price to increase)
After the ICO, the price of a newly issued cryptocurrency is determined by the market. The invested capital will gradually be consumed, and ICO businesses use the invested funds to pursue technical development and generate revenue.
Many ICO investors tend to seek out for cryptocurrencies with high usability and high probability of getting listed on the top exchanges so that they can maximize capital gain. Naturally, they prefer to avoid an increase in the total supply of a currency from additional issuance because it most often leads to a sharp decline in the overall price.
UAICO safely stores all the invested funds within the smart contract and utilizes them as the underlying asset of a newly issued cryptocurrency. This model allows companies to start out with a relatively smaller budget and carry out additional issuance as the business grow bigger.
Compared to the current ICO models, UAICO is less likely to experience a steep decrease in the price (after its supply has increased) because the underlying asset of the currency will increases as much as the inflow of the invested funds. In addition, depending on the conditions of the additional issuance, the incumbent investors may be able to gain further profit.
The table below is an example of UAICO, carrying out multiple issuances of a cryptocurrency.
Table 1: link
Additional issuance has a direct impact on the price of a currency. While UAICO can control and manage most parts of the currency, it cannot guarantee a full control. However, depending on certain conditions, as demonstrated on table 1, incumbent investors are capable of increasing their capital gain by increasing the underlying assets.
UAICO aims to reduce profit gained from an issuance and focus more on a gradual but consistent growth of a currency. This model returns the profit gained from an increase in the supply and maintain its stability by increasing the underlying asset. In the long term, investors can anticipate an increase in the overall value as well as some dominance in the competitive crypto-market.
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