How to Enhance the Value of Streamr’s DATA token

… And increasing the level of Marketplace participation at the same time.

Maverick Chow
Jan 19 · 6 min read

TL;DR: Convert DATA tokens into a security token. Trade data with ETH instead.

Most new ventures don’t tend to survive past the first year. So it’s to its great credit that Streamr is one of the few companies in the crypto space that has proven itself to be a very legitimate venture worthy of reaching greater heights.

  • Using the token to facilitate data trading also indirectly competes with ETH. This is a very significant point. Generally, a person may be more inclined to earn ETH than to earn a third party token that comes with a myriad of risks, e.g. paltry liquidity, very minimal use case beyond its dApp, uncertainty surrounding the team’s future, uncertainty revolving around the project’s development. And that’s not to mention an added layer of hassle to swap out for other coins/tokens leading to user experience friction and lower participation. (No offense to the team or the project, but I’m trying here to express all the possible general perspectives from a third party perspective).
Technically, no dApp requires its own distinct token to run just as no software program needs a special token to install and run. In a world of tokenized assets and securities (i.e. fractional ownership), tokens may be needed only for accounting purposes on who (John) owns what (shares of ABC Inc.) on what date (January 18, 2020) for what amount (USD 10,000).Many ICO projects introduce their own tokens primarily only for the purpose to have their own separate (albeit independent) economic circle for control and financial self-enrichment, which unknowingly to them only lead to restrictions and hurdles for mass adoption and growth of such ICO projects within a superset network that is Ethereum. The restrictions and hurdles come from having to build an unnecessary technical layer of functionality (and the complexities that come with it) whereby the token is made to have a use case in order to justify having it in the first place, despite the fact that it was initially created for attracting fundraising. The same can be said with having the same separate economic circle in other networks like Bitcoin, EOS, or NEO.Maintaining one’s very own blockchain network (be it public or private) just to run a dApp or out of financial self-interest would be even worse and unsustainable and this will play out in the future. Provide a selfless service, and you will have everyone on your side. Provide a selfish disservice and you will have everyone opposing and competing against you. Many projects chose the latter option when they decide to launch an ICO or even a new blockchain with claims of better tech than Ethereum only to turn out to be a for-profit private organization. The future is not a matter of “I am better than you and so I deserve all the money and be the king of the world” in which there will be opposition, but rather, “let’s work together to build a better future for everyone” in which there will be support and assistance.

A Solution!

Disclaimer: This is not to claim that there is only one solution or that the solution given here is the best one on offer. Rather, I’m putting it up here for consideration by the wider community.

  • The general appeal of earning ETH over a third party token with very limited scope is significantly higher, just as it would be more appealing to earn USD over a “gift card” or loyalty points. And such an appeal will attract higher adoption and participation over time.
  • User experience is enhanced as Marketplace participants no longer need to exchange DATA with any other coins/tokens (for paying tax, spending, etc). They can have the convenience that comes with using ETH directly.
  • A combination of having higher Marketplace liquidity, the appeal of earning ETH from trading data (an alternative to being a coveted PoS stakeholder), and a more streamlined process that will attract higher participation. And when fees are introduced, that will results in a solid income stream for the project.
  • Finally, converting DATA token into the company’s securities will allow the now-converted securities holders to have a share of ETH earned as a source of income. Converting the token into a security is also in line with the direction and intent of regulators to classify tokens as securities, and as such, I believe it is a matter of time before such classification becomes a compliance requirement. Taking a lead in this direction may lend further legitimacy to Streamr and its project and make DATA a serious institutional investor proposition.
  1. Another ICO project by the name of Power Ledger is also taking similar approach by converting its POWR token into a security. This may be a trend as more legitimate ICOs monetize their projects through such an approach.
  2. As a security, DATA would be investible and open up further to investment potential and public scrutiny, which if done correctly, will lead to greater opportunities. However that does not mean all ICO projects should take such path of securitization. Only legitimate projects with huge commercial value should.

News from Streamr

Data done differently. The open source, blockchain-powered Network and Marketplace for real-time data. #Ethereum #Web3 #SmartCities #IoT. Follow us on Twitter, join our sub-Reddit, or chat with us on Telegram.

Maverick Chow

Written by

News from Streamr

Data done differently. The open source, blockchain-powered Network and Marketplace for real-time data. #Ethereum #Web3 #SmartCities #IoT. Follow us on Twitter, join our sub-Reddit, or chat with us on Telegram.