What Gives A Crypto Asset Value?

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2 min read

What Gives A Crypto Asset Value?

Liquidity / Swaps / Fees | DeFi

DeFi opened up a whole new way for companies and platforms to earn revenue. The fees collected from these DeFi platforms are much in the same as a centralized exchange taking a fee for each trade. However this fee is injected back to those providing the "exchange" or "liquidity" which pumps the value of the token. However with that comes a balancing game of making sure your own tokens emissions are not too high (inflation) while market conditions and liquidity, trading dry up. But then provide a high enough emission when markets begin to steam roll again. Looking at a DeFi platform is like looking at a successful centralized exchange.

Use Cases

If no one is using your token it has no value! Yes Zippo! If someone is not willing to do or trade something for those millions of tokens you have it's essentially worthless. Use cases is critical to the success of any currency which is what crypto is. We have seen fully platforms launch into crazy high values based simply on play2earn. Take Splinterlands for example and how many systems and revenue generation methods that have and how it's warming up into being a pool type system that gets paid back to its players while also paying devs.

But what if a token had many use cases?

The biggest example I can think of this successfully done is yet again Ethereum. DeFi, NFTs, trading, soon staking and so on this token does many things including supporting layer 2 assets like polygon(MATIC) and many others. All of this provides value back to the core token.

Ads | Business Mindset

I know many here will tell me it's pointless to run ads on things like 3speak, hive and so forth. But flat out ads are the single best thing that provides a core baseline of value to any current social business model.

For example Youtube basically ran ONLY off of ads and built a massive empire. It wasn't until recently they started to incorporate things such as paid memberships, donations etc in which they take a rather large cut of. These same things could be applied to 3speak, hive and LEO already does some of this with great success.

One of the biggest things I learned in business and creating a successful product is you don't want to be the first. You want to take what is already successful and mimic it. Your costs will be far less and your chances of success much greater. Taking successful web2 models and building a tokenized version of it where those generated fees, ad rev, sponsors etc all goes back to a governance pool and divided out to stackers and those actively contributing to the social platform is what I personally believe is the holly grail of what a web 3 application would look like. Don't get me wrong it's no easy task.

Posted Using LeoFinance Beta