Benefits of Dynamic Pricing Model in Public Token Sale
Rowan Distribution| Bonding Curve | Price Discovery
* Note: The official token sale start date is Friday, February 19, 5:00 AM GMT. The official token sale end date is Friday, February 26, 6:00 AM GMT. The official token sale page is https://purchase.sifchain.finance/ and it’s the only official page for registered participants to purchase eRowan. This announcement is effective February 17, 2021.
Looking forward to our public token sale, community members have been asking:
“How does the token distribution model work — particularly the bonding curve and dynamic pricing of Rowan? How does this affect individual investors?”
Read on to see our detailed plans for the public token sale and Sifchain’s long term crypto-economics.
Who will the greatest demand for Rowan come from and how are they incentivized to hold instead of sell?
In short, people will buy Rowan to stake or pool it. They will hold Rowan to keep earning rewards.
We’re launching a product at the same time as our public token sale which means that Rowan has utility value from day one. You can monetize your Rowan at this point through 1) earning validator income 2) earning liquidity pool rewards.
Validators and liquidity providers will substantially and quickly increase demand. Learn how you can set up a validator and create income through your Rowan. Since Continuous Liquidity Pools (CLP) yield higher rewards when trading volume increases, liquidity providers are incentivized to add Rowan to CLPs and to encourage usage of Sifchain by crypto-currency traders.
How do rewards work for staking or pooling Rowan, ETH, or ERC-20 tokens?
We have a call-to-action for public sale purchasers to immediately stake on a validator of their own, to delegate to a validator, or to add liquidity to a pool. We also have a call to action for anyone who supports Rowan to pool their ETH or ERC-20 tokens on Sifchain immediately after BetaNet to receive Rowan as validator subsidy rewards (paid in Rowan) in addition to the standard liquidity pool rewards (paid in Rowan and the other token as swap fees).
How does a rapid increase in Rowan price benefit everyone and why will a price crash not happen?
During the public token sale, we anticipate an initial period of price discovery. Price discovery will be affected by a great deal of demand to acquire Rowan.
In general, price discovery tends to happen well after a token sale. People who make money are usually those who bought in early. Usually, when price increases substantially in a token sale, it crashes because the token has no utility value.
While we expect the price of Rowan to rise potentially tenfold or more during our token sale, we expect the price to stay high instead of crashing. Due to the utility of Rowan in validator and liquidity pool rewards, people are incentivized to hold instead of dump and to purchase instead of sell.
Therefore, a price spike in Rowan is beneficial to the whole of Sifchain’s community — SifDAO (decentralized autonomous organization) — it increases the treasury of our DAO and allows us to have liquidity in a multitude of assets.
What is the goal for the public sale in terms of creating a long term crypto-economic system?
SifCore (core team of Sifchain) is targeting 10 million USD of external capital to come into liquidity pools. That requires 10 million USD worth of Rowan on the other side of such liquidity pools. This means that validators would be staking 20 million USD. Currently, the fully diluted market capitalization of Sifchain is 30 million USD. We are trying to get that number up to 200 million USD. As such, the price of Rowan must rise substantially above 0.03 USD, which was the price for investors in our previous round of funding.
Recent Ethereum-based decentralized exchanges (DEX) have had no problem hitting the 10 million USD number, and several have reached 20~50 million USD. We set a conservative goal back in August of 2020, when we founded Sifchain, but the crypto-currency market has greatly strengthened in early 2021.
How is dynamic price determined in the token sale and how does the bonding curve work?
[Edit: Check https://medium.com/sifchain-finance/sifchain-token-sale-updates-28d6ce9f67ea for new details]
