In this article I want to approach the fundamental value of STRAT and why exactly I am so optimist about its future. I am going to dive into pretty much all the factors that are going to make an impact on the underlying value of STRAT. I suggest you read this carefully as it could provide you valuable insights and knowledge about the tokenomics of this cryptocurrency that I like to call the "blue chip" of crypto industry.
The first factor is of course staking. The Stratis blockchain uses a Proof of Stake (PoS) algorithm to validate transactions so you can actually gain around 1%/year by staking your STRAT. Actually at the moment you earn around 2-3%/year as not so many people are actively staking.
Network Weight at 19:45 PM 17/03/2019: 17,361,118 STRAT - this would traduce in 17.49% of the total supply of 99,252,353
Take into account that the above amount vary from day to day. On average there are more than 20 million STRATs being held up in wallets and used to secure the network.
I expect this rate to significantly increase once cold staking will be implemented. This feature will actually allow STRAT holders to stake without having to keep their coins in an "hot"(online) wallet that could be susceptible to attacks or security breaches if it is well maintained.
You can check out the Cold Staking Activation Progress on https://stratis.guru/coldstaking-progress
Stratis has already announced the two lower tier masternodes that will support the Cirrus sidechain:
- Cirrus Chain Federated Masternode: 10,000 STRAT collateral
- Cirrus Chain Multi-Sig Masternode: 50,000 STRAT collateral
"A Cirrus Chain Federated Masternode can produce blocks on the Cirrus chain, earning transactional fees and GAS costs for smart contracts executed on the chain."
"Similar to a Cirrus Chain Federated Masternode, a Multi-Sig Masternode can also produce blocks on the Cirrus Chain. In addition, these Masternodes form the multi-signature address that secures the chain."
A notable fact is that the number of Masternodes that can operate on the Cirrus sidechain is currently limited to 101 members to ensure a level of decentralization as multiple entities will be producing blocks on the chain.
If we suppose that 30% of the 101 masternodes will be Multi-Sig ones that will result in 2,210,000 STRAT locked up as collateral. Don't forget that masternodes owners can also stake their coins at the same time.
CRS tokens will be 1:1 pegged to STRAT and Cirrus will be the first sidechain where Smart Contracts in C# will be deployed.
This is the first sidechain created on top of Stratis technology. I'm being pessimistic here and let's suppose that only 10 companies will create their own sidechain this year. Let's say each one of them will lock up 1,000,000 STRAT. That would be an additional 10% of the current supply locked up from circulation. In my honest opinion we will see a lot more entities start using Stratis products until 2020.
Powered by STRAT, a smart contract uses gas when it is running, and on the Stratis platform, gas is supplied by sidechain tokens, which are pegged to the STRAT. This way there is a certain degree of demand created. More smart contract executions = more demand for STRATs!
Stratis Platform is the first to offer smart contracts deployed in the C# programming language which will most probably make them the first choice for entreprises as C# is the logical way to go for most corporates.
With the rising trend of STOs ( Security Token Offerings ) more and more parties will be looking for a solid platform to launch their tokens and get their funding. They will be able to accept contributions in STRAT, BTC or, via Changelly integration, in more than 50 other cryptocurrencies and fiat currencies.
First of all the contributions made in STRAT will be locked up at least for a time until the crowdfunding is finished. Moreover there is a high probability that projects will first liquidate their BTC and other coin holdings before STRATs.
"The Privacy Protocol service allows organizations to obfuscate business to business Bitcoin transactions securely on the blockchain. Using the Privacy Protocol service, the coins in a payment make a journey from the “receiving” wallet to another “fresh” wallet. During this journey, the transactions that are executed serve to tumble (scramble) each coin. When the coins arrive as a series of transactions in the destination wallet, they cannot be traced to the coins in the original transaction."
Needed collateral: 250,000 STRAT
As it has been recently announced by CEO of Stratis, Chris Trew on Twitter:
"1% of Mediconnect tokens will be airdropped to $STRAT holders."
So this will be another strong reason to hold your STRATs as you will likely receive airdrops from ICOs on Stratis platform and/or projects that want to create ecosystems around Stratis community.
The Stratis team is always at work developing and planning even bigger things. Chris annonunced that there will be new products that he didn't even mentioned before. Now let's make our calculations:
Current Supply Lock Up:
- ~20,000,00 STRAT = 20% of supply ( at the moment without cold staking)
- ~2,210,000 STRAT = 2% of supply ONLY ON Cirrus Sidechain ( VERY SOON )
- 250,000 STRAT = 0.25% of supply ( 1 Breeze MN running)
STRATs on Bittrex: 10,080,250.01
STRATs on Poloniex: 3,796,383.74
+ a considerable amount on Binance so I'll take my chance and assume there are around 25M STRATs on exchanges. That is 25% of supply.
Only 25M Stratis on exchanges? Guess what happens when multiple companies need millions of STRATs for their sidechains? I'll let you imagine.
So: 22.25% locked up, 25% on exchanges. Where is the other ~50%? Probably staying idle in large investors' wallets who are long term believers in the project who don't want to risk them by staking in a hot wallet.
Now think about the buy pressure that will be created on exchanges once smart contracts and sidechains will start being deployed and actually used. Add the ICO platform, Breeze masternodes lock-ups and don't underestimate the speculative value of STRAT that could skyrocket in anytime. The orderbooks are pretty thin now and if a large investors will pour its funds into STRAT it would create quite some waves among the crypto community. I'm not even speaking about what is going to happen once we officially enter into a bull market again. ;)
Thank you for taking the time to read this article and I hope you now have a clear picture on the future of Stratis!
P.S. If you're feeling generous and want to buy me a beer or coffee: SX87aobdPmGRx4AEHRxKXJXSnk1khodKpV