True passive income. We all love it and we continuously search for it. Unfortunately, most passive income opportunities have proven to be unsustainable, especially in a bear market. This hasn’t stopped me from looking for good investment opportunities, but it has made me more critical.
One project I recently found out about is The Momentum Project. In this article I will describe the project, share my thoughts and reveal if I ended up investing.
The Momentum Project
Momentum is a project that pays dividends to the holders of their MASS token. These dividends stem from the taxes that get charged when the token gets bought or sold. So the higher the trading volume, the higher the dividends will be.
Those of you familiar with Elephant Money, may see similarities with the ELEPHANT token. That is for good reason, because both tokens are reflection tokens. But while ELEPHANT holders get rewarded with additional ELEPHANT tokens, MASS holders get rewarded with BUSD.
Besides earning dividends, MASS holders also benefit from the price appreciation of the token itself. The team uses a stabilizer technology called The Momentum Mechanism (TMM) to achieve this. TMM keeps the price in a specific range, but also increases this range as liquidity increases over time.
Tokenomics
Momentum has an elastic token supply that fluctuates based on the health of the liquidity pool. If there is buy pressure, the token supply increases and the liquidity grows. When there is sell pressure, the token supply in the liquidity pool decreases by the amount that is required to maintain the price point.
Buy & sell tax
MASS has a buy tax of 15% and a sell tax of 18%. These taxes are distributed as follows:
- 50% is used to increase liquidity
- 35% is distributed to holders
- 15% is used for development and marketing
Bonding
An alternative to buying MASS, is to buy bonds. These bonds take either 7 or 14 days (dependent on your choice) to fully unlock, but prevent you from having to pay the 15% buy tax. The 14 day bond has the added benefit of rewarding an extra 25% of MASS tokens.
Let’s compare the three available options with an example. For simplicity, we will assume the price of MASS is $1.
Buying from an exchange
User buys 100 BUSD worth of MASS tokens. Because of the 15% buy tax, he will receive 85 MASS tokens. The tokens are unlocked and will start earning dividends immediately.
7 day bond
User bonds 100 BUSD into 100 MASS tokens. After 7 days, all 100 MASS tokens will have vested and be unlocked. The user will not earn dividends until he claims his MASS tokens.
14 day bond
User bonds 100 BUSD into 125 MASS tokens. After 14 days, all 125 MASS tokens will have vested and be unlocked. The user will not earn dividends until he claims his MASS tokens.
Dividends can be claimed without taxes, but can also be compounded into new bonds. Compounded bonds will vest over 24 hours and do not come with a buy tax.
My thoughts
I love the concept of reflection tokens, because they allow me to benefit from the impatience of buyers and sellers. That alone does not warrant an investment though. Without good fundamentals, even reflection tokens are bound to fail. So how do I rate The Momentum Project?
The decision to reward holders with BUSD instead of MASS gives me two attractive options:
- Taking profit without having to pay taxes
- Compounding to further grow my dividends
Elephant Money rewards holders with additional ELEPHANT tokens. But because there’s a sell tax on ELEPHANT, I’m less inclined to take profit. Holding MASS enables me to take profit, without being penalized. This gives me the opportunity to gradually take money off the table.
Another thing I like is the price stabilizer, which reminds me of HORDE’s Liquidity Manager. Unlike HORDE, the price range will increase as the liquidity grows. As a result the token price will continue to increase as time passes.
In theory, this sounds amazing. Who doesn’t want to earn passive income through a token that only increases in price? There’s one key part in that sentence though… in theory.
The Momentum Project has only been live for little over a week. The market cap is just 86K and the daily volume is no more than 3K. As a result the dividends will be minimal at this point.
I like being an early investor, because that’s when the potential upside is the biggest. At the same time, I am well aware that being early also brings the most risk. The concept has not yet been proven to work, so if you want to play it safe, you might be better off waiting another month, to see how everything progresses.
Personally, I have decided to make an investment. The combination of a reflection token, passive income in BUSD and an increasing token price is just too much for me to ignore. If everything works as planned and if enough people hear about the project, the potential is big. REALLY big. ELEPHANT currently has a market cap of $107 million. That is 1,244 times bigger than the 86K market cap of MASS! 😱🤯
I’ve bonded my investment for 14 days, to get the maximum amount of MASS. This is done using the website. If you want to buy MASS you will need to use PancakeSwap or Bogged. Remember that buying comes with a 15% tax though!
At the time of writing, I haven’t claimed any tokens yet. For that reason I do not yet know how much dividends I will earn from my investment. If you want me to do a follow up about the yield and my general experience with the project, please let me know by clapping or leaving a reply.
