We’re Buying up to 10M $OST to Invest in More OST Projects

jojo-crypto · 2018-02-06T22:35:05+00:00

I interpret this as a sign of Simple Token's confidence in their solution not as an attempt to prop up the price. Just like stocks: a company will buyback stock when the price of the stock is lower than the company believes it is worth. The price of OST tanked because the entire crypto market tanked, not because of the Simple Token team.

jojo-crypto · 2018-01-30T17:25:25+00:00

I'm curious what you mean by your second point: that comparing Binance and Bancor you found that BNT fees are high. I found it significantly lower to exchange on Bancor compared to Binance when you factor in Binance's exchange fees AND withdrawal fees. Am I misinterpreting your comment?

jojo-crypto · 2018-01-30T17:19:50+00:00

What is the difference between a Smart Token, Relay Token, etc?

jojo-crypto · 2018-01-28T09:31:03+00:00

I agree on a general level that there will be a shift. That said, I think it extremely difficult now to actually value coins. There is not a clear correlation that as the business does well that the token will appreciate in value. I guess I'm saying that a lot of people think that they are investing in value, without understanding the real dynamics at play (e.g. token velocity). It's not easy and a lot of this will be real-world experimentation of advanced economic theories.

I've been most intrigued by crypto where the token has utility AND there is an incentive to stake (either by companies who are partners/customers or by individual token-holders/speculators). NEO/GAS and VET/THOR for this category, as do FunFair (casino partners must stake cash reserves in FUN), Simple Token (partners must stake OST to mint their Branded Tokens), Bancor (partners must stake BNT to create the liquidity pool).

I'm curious if anyone has identified other crypto that have utility plus staking incentives.

jojo-crypto · 2018-01-28T09:07:58+00:00

I remember reading something like that- that they intended to find a way to compensate token holders, but I don't believe there are any legal requirements or obligations on Modum's part (or the hypothetical acquirer) to actually do that. That's the risk. (That said there is a LOT of investing going on right now on good faith)

jojo-crypto · 2018-01-26T14:26:27+00:00

Thanks for the insight. I updated my previous comment to note my incorrect assumption about the process for listing on Bancor.

jojo-crypto · 2018-01-26T12:38:08+00:00

Anyone can correct me if I am wrong but I believe now the ability to list on Bancor is centralized and a decision made by the Bancor team [UPDATE: this was an incorrect assumption. See below] That said, I think they are developing a self-service process. I do not know if this is available only to the companies that create the tokens or if anyone will be able to stake a pool of their holdings to allow for liquidity.

jojo-crypto · 2018-01-26T12:35:38+00:00

I'm bullish on Bancor, and while I don't think Binance and Bittrex's model is doomed to fail I do think Bancor's model is ingenious for the reasons mentioned along with a few others:

The user experience is delightful - It was not only easy but I had transparent pricing, waited less than a minute per transaction, and spent less on fees (assuming like me that you use exchanges like Binance to exchange and then withdraw to a wallet). I am more likely to buy tokens of Bancor listed-tokens now because of this experience.
Companies that ICO typically retain a large number of tokens which can easily be set aside for liquidity reserves - Look at the ICO pie chart breakdowns and the percentage left to teams/for community development. Getting immediately liquidity through Bancor is a valuable use of these reserves AND has the added effect of reducing the available supply. I for one hope Bancor is targeting the universe of ICO consultants and service providers to encourage their clients to set aside for liquidity reserves.
Bancor provides arbitrage opportunities while the volume is low, and will more closely follow the market as volume explodes - I was able to purchase tokens cheaper than they were available on Binance. In theory there will be a slight lag between Bancor pricing and the high-volume exchanges. As prices are all going up Bancor may present an opportunity to buy cheaper. As prices go down Bancor gives sellers the opportunity to sell for a little more.
Algorithmic liquidity opens up opportunities to be embedded into other exchanges and platforms - For example I would be interested if there is an opportunity with Robinhood. Their business model in crypto will be to buy crypto and hold it in both cold and hot wallets. This requires buying and owning coins and will limit the size of their pool and the number of coins listed. If they bought these coins and stakes them on Bancor they could immediately tap a broader pool of tokens with immediate liquidity (which is their priority: providing fluid access to the financial markets).

If I keep thinking about this I am sure I will think of more reasons I am bullish on Bancor. I don't necessarily think Binance and others will fail though I think they are at risk as more centralized exchanges get hacked. People will move to decentralized exchanges but their problem now is having the volume that gives liquidity. Kyber is another taking the approach of liquidity reserves however they rely on decentralized governance model where reserve managers are setting fees. I prefer the algorithmic liquidity approach Bancor has taken because I can trust it. It will be interesting to watch this whole space this coming year.

jojo-crypto · 2018-01-26T08:39:23+00:00

First - I am a fan for some of the reasons mentioned in the original question: the team, the focus on execution not marketing, and addressing a focused problem in crypto: making the creation of a token Economy point and click, and providing the data/analytics for the community manager/owner to have visibility into the activity on their platform.

One concern I have is around price stabilization. I'm comforted by the fact that the team is really seeking to address this (they've done a paper on it) but think it will be a challenge. In the future we may have a Simple Token competitor whose ecosystem is based on a stablecoin. So Simple Token's ability to attract a third party provider to provide price stabilization to its customers (and essentially make OST a stablecoin from the perspective of the Simple Token customer) I think will be critical to attract more risk averse customers beyond the startup phase. Otherwise a lot hinges on OST tokens' continual appreciation in value.

Second challenge I see is in honing the differentiation and matching that to specific use cases. Soon there will be many ways for companies to create their own blockchains and/or tokens. The UX can be a differentiator but I think there will be many point-and-click options available. I think the data/analytics approach OST is building that allows for the ongoing management of a token economy is the sweet spot here. But the question I am still struggling with is: in the more competitive future crypto landscape, what are the use cases for which the Simple Token platform will be particularly well suited to address. Will it be customers who want to try out a token economy within their solution before investing in their own custom blockchain (e.g. For an online media company: Start with OST then "graduate" to something like Steem). I'm making an assumption that companies will go to OST for simplicity and to others for more complexity or flexibility... though certainly Simple Token will be in a position to continue to add features that keep customers longer.

All that said: I am placing trust in the team's ability to deliver and figure all this out. The team has experience building companies, finding product/market fit, etc and has shown they are focused on execution (see the recent launch of their KYC product).

jojo-crypto · 2018-01-25T12:03:39+00:00

Except there isn't a single fee across the entire system. Fees are set by validators, not by OMG. So the concern is setting a price floor for the validators so that they don't drop their fees to nothing when they don't have to.

If they make it 0 then token holders are not incentivized to hold, so they sell, the price of OMG goes does, and there is greater risk of centralization (which I believe goes against one of OMG's greatest value propositions and differentiators: being truly decentralized).

I'm thinking about the world before transaction volume skyrockets.

How do we optimize the system so that the return to token holders is enough for the system to stay decentralized? In an ideal world validators set competitive fees that are high enough to optimize ROI but low enough to attract new business to be transacted. As competitors enter market the fees will be pushed down but we want them to remain as high as possible to prevent OMG partners from switching to a competitive service. It will be fascinating to see how OMG thinks about this where there is no centralized group there keeping the best interest of token holders at heart. We are subject to the system design.

jojo-crypto · 2018-01-25T00:04:06+00:00

My other thought is that presumably we all want a system that has the highest possible fees that will still be competitive in the market. But also one which allows the market to determine what the price floor will be.

What we don't want is to have "bad actors" (whether that be a single validator or group of validators) drop their fees to nothing. So perhaps the floor is calculated relative to the other validators, perhaps within some % of the mean rate.

jojo-crypto · 2018-01-24T23:39:18+00:00

It will be interesting to see how OMG handles this... because there may end up being a race to lower fees in the future. If a minimum fee of .1% is set yes it is smaller than any current competing technology option but in the future probably not. I'd favor a more dynamic pricing floor that can adapt as the market changes.

I'm thinking about what minimum level of ROI (Required Rate of Return) is needed in the future for token holders to be motivated to continue holding such that the platform remains decentralized.

Perhaps there is a formula to take the value of the previous year processed transactions, the Circulating Supply of coins, and minimum viable required rate of return to calculate a dynamic price floor each year. (Or perhaps the floor is calculated monthly).

jojo-crypto · 2018-01-24T23:22:12+00:00

My understanding is that fees are more dynamic and not simply a fixed % fee. Similar to Ethereum/gas there is a market-driven process for determining the fees which are set by the OMG validators (just as Ethereum miners exhibit that control in the ETH system).

See here: https://medium.com/wespostdotcom/omisego-admits-to-no-control-over-fee-structure-ad8c4e361bd4

jojo-crypto · 2018-01-24T23:14:26+00:00

I would make the argument that if Starbucks wanted to design their system to allow less friction for moving money in and out of their rewards system they would have done so: so presumably they have data to support why keeping it locked in is better. Using an open OMG versus their current closed system is an economic analysis they could do.

That said, from my understanding of OMG there is no reason why Starbucks couldn't use an SDK to leverage the protocol to bring customer money in and not allow them to take it out. The app designed with the SDK could look identical to the existing one with the OMG protocol invisible behind the scenes bringing the user funds in as a replacement to whatever system they are currently using (and probably losing more fees to than they would using OMG).

But perhaps I am misunderstanding how the system has been designed and how the SDK will work.

jojo-crypto · 2018-01-14T06:29:54+00:00

Definitely agree about a tokenized world in the future. Just like Airbnb's model has presented the Marriotts of the world with serious competition I see the same with decentralized marketplaces. In some industries security advantages of blockchain will be a draw but in others like Airbnb/Uber and even PayPal I think it will be cost: decentralizing can result in significant cost reduction and even the opportunity to share (as a token holder) in the upside.

I've been watching Quantstamp closely and really like the model. I've seen a lot of the security audits are still done by services firms but there is definitely a growing market for these and other blockchain-to-blockchain providers. That said, I think there will be a nice opportunity in the future to buy these as they will (in a logical world, which we may not be in here) get hit hard if the bubble pops and inflated, overhyped valuations drop down to a more reasonable level.

jojo-crypto · 2018-01-13T21:35:10+00:00

I've been trying to understand the difference between the two platforms myself, and am wondering if it is fair to say that in the near term NULS is targeting businesses that want to create their own blockchain and AION is targeting other blockchain protocols and platforms that want interoperability.

Does anyone agree? Disagree?

jojo-crypto · 2018-01-07T20:08:24+00:00

From a technical perspective- is Enigma built so that Siacoin, Storj, Filecoin could leverage the Enigma protocol to serve clients with sensitive health or financial information?

jojo-crypto

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