Apr 14, 2021
What is the token of the Muso blockchain?
The veteran cryptocurrency investor, Andrew Kong recently shared his views on the issuance of project tokens on Twitter. He believes that when the project party issues a small number of tokens during the beginning of token issuance, it may bring a short-term market boom, but this will have a negative impact on the long-term development of the project.
Why do so many projects choose to release only a small number of tokens when they are issued?
First, the early venture investors and the team have locked positions to ensure the long-term development of the project. During the last round of the bull market, many projects were hardly locked. As a result, early investment institutions quickly smashed the market after the tokens went online on the exchange. In this respect, this is a good change.
The issuance of YFI token adopted a new model, creating a new trend. It uses zero pre-mining, zero distribution, and zero fundraising. It is regarded as “the fairest issuance since Bitcoin.” However, compared with the general token issuance, YFI can be said to be an exception. It distributes all the tokens in the first week of issuance, while the entire token distribution process of a project may take several years in general.
However, there are many problems with releasing a small number of tokens from token issuance. Because the crypto market is inefficient, coupled with the shortage of supply (strong market demand), it is easy to cause the token price to rise too high. In fact, we will also see that many projects can easily achieve dozens of times increase during the first time when they are listed on the exchange. However, with the increase in circulation, the decline in token prices has almost become an inevitable trend.
As locked-up tokens are unlocked, the selling pressure continues to increase, token prices continue to fall, investors and coin hoarders will suffer a lot of losses. Besides, the community morale will decline, and many retail investors “surrender” from the loss during the decline, and silently remove the tokens from the watch list. The project party lost many supporters and contributors.
At the same time, the project team had to spend a lot of energy to deal with the large number of negative reactions brought by the price drop. After all, many retail investors think “price is justice”. Under the huge interference, how can the team concentrate on research, development, and product production?
So, how to increase the initial circulation?
1. Issue airdrops to product users. The NGK has conducted several rounds of large-scale airdrops, including BGV tokens and SPC tokens;
2. A larger proportion of the public sale, which allows the market to seek better price discovery;
3. Use tokens to reward the project contributors;
4. A larger proportion of tokens are used to initiate and provide liquidity. Unlike the MUSO blockchain, under the liquidity mining project of the NGK project, a total of 60,000 BGV tokens are issued, of which 10,000 units are used for airdrops, and the remaining 50,000 units are produced through liquidity mining.
