Analysing the Token Sale Rewards

Harith Kamarul
Aug 22, 2017 · 4 min read
We’re talking about the top-right quadrant

As the actuarial grad in the house (NB: not the same as Actuary), it has fallen to my remit to be the “numbers” guy. In this post I unpeel the various numbers to do with the HelloGold Foundation Token Sale.


Background

Before getting into the numbers it’s important to highlight the basis of HelloGold’s ambitious plans.

  1. Precedent. In Robin’s previous life as CFO of the World Gold Council, he was responsible for the world’s largest gold fund with US $30 billion in physical gold. He also worked with ICBC to build a gold business from 0 to 11 million customers and US$6 billion gold sales within four years. This idea has legs.

A quick recap on the HelloGold reward structure is also useful (you should, however, always check the documentation yourself):

  1. HelloGold charges a 2% annual management fee, calculated daily and charged monthly (in gold). On a side note: the 2% actually works out to ~1.98% due to the magic of compounding — to be explored in another blog post.

The HGT holder will benefit in two ways:

  1. The speed at which HelloGold’s AUM grows

NB: we do plan to expand to other asset-backed tokens (eg silver, platinum) as shared in our roadmap, but as we don’t have those products in place right now we decided not to model any rewards from them.

Roadmap for reference

Sources & Assumptions

In coming up with our financial model and subsequently HGT projections, we used data from these sources:

  1. World bank data

We also made assumptions as below:

  1. HelloGold customers’ gold savings as a % of cash savings

Results

I’ll spare you the number crunching

A quick calculation of potential rewards is by simply dividing the maximum cap of 3.8 million grams by 1 billion HGT. The maximum amount given to each HGT can then be determined as 0.0038 GBT. At a gold price of US$ 40/g and HGT price ranging from USD 0.024263–0.02921, the absolute return would be 5–6x for one (1) HGT.

Another example of erring on the conservative side: in the above calculation we ignore any potential increase in gold value. Below, we list down two results based on whether gold price stays flat over time or increases by an average annual return of 5% (historical against USD over the last 20 years).

  1. Flat gold price
  • the maximum cap of 3.8 million grams is reached in Year 8 of operations

2. 5% annual increase in gold price

  • maximum cap is reached in Year 8 (but closer to year-end)

An important thing to note: for many of our supporters from the ASEAN region, the historical increase in gold price against the local currency is even higher. Over the last 20 years it has had an average annual return of 9.4% against the Malaysian Ringgit, 8.0% against the Thai Baht, and a whopping 15.9% against the Indonesian Rupiah.


As always, we welcome further discussion on the numbers and hope by sharing this post it’ll be a step forward for best practices in this space.

hellogold

Buy & Sell Gold. Anywhere. Anytime.

)

Harith Kamarul

Written by

hellogold

hellogold

Buy & Sell Gold. Anywhere. Anytime.

Welcome to a place where words matter. On Medium, smart voices and original ideas take center stage - with no ads in sight. Watch
Follow all the topics you care about, and we’ll deliver the best stories for you to your homepage and inbox. Explore
Get unlimited access to the best stories on Medium — and support writers while you’re at it. Just $5/month. Upgrade