According to CoinmarketCap, platform token is one of the most obvious conceptual sectors in the recent crypto market uptrend. TT ($1.43) and DYDX ($3.04) are two leading platform tokens with the highest weekly gains of 20%. Besides, at the end of February, most platform token prices also hit new highs in 2023. Led by the high rise of platform tokens, the price of mainstream tokens such as BTC and ETH kept steady amid volatility as well and ushered in a monthly increase of 3%. The spring of the crypto market seems to be on the way. The leader in decentralized exchanges (DEXs) is MetaTdex's TT while the leader in centralized exchanges (CEXs) is OKX's OKB. Although the monthly gains of DEX and CEX platform tokens are generally consistent, in the latest week, the rise of DEX platform tokens was significantly higher than that of CEX platform tokens. TT, in particular, has a strong growth momentum. At the beginning of February, the price of TT was $0.8. On the morning of February 28, it rose to $1.43, reaching an increase of 77.5% in a single month.
The Token Economics Logic Behind TT Price Increase
What is the token economics logic behind TT, DYDX and OKB, three leading platform tokens? Token economics involves multiple kinds of content, including mathematics, supply and demand, incentives, value accumulation, behavioral psychology, as well as game theory. Among them, the core is the supply-demand relationship. Taking TT as an example. First, let's think about several issues from the supply of tokens:
- What is the current supply of TT on the market?
- What is the total supply of TT?
In theory, the total amount of TT issuance is 1 billion, that is, the maximum supply. However, due to the simultaneous existence of mining and burning mechanisms, the burning has begun before mining out entirely. Therefore, the TT supply will always be lower than 1 billion at any time .
- What is the current market cap of TT?
Market Cap = Current Price * Circulating Supply The current market cap of TT is approximately $319 million ($1.43 * 223,049,412).
- What is the fully diluted market cap of TT?
Fully Diluted Market Cap = Price * Maximum Supply Fully Diluted TT Market Cap: $1.43 *1 billion = $1.43 billion We need to predict how the supply will change over time. This is determined by the following factors:
- Who owns TT?
TT holders come from multiple industries. With the construction of the meta-asset bridge, TT holders will be more dispersed.
- When and how can holders sell their TTs?
TTs are circulating in various crypto fields and can be disposed of by users as they like. Since there is no mandatory lockup for key clients, it is rare to see a sudden influx of TTs into the market and break the supply and demand balance.
- Will some policies such as deflation and burning mechanisms change the supply of tokens?
The production cutback and burning mechanisms will change the supply of tokens. The output speed of TT is reduced by 20% per year, slowing down at a constant rate. In addition, there are several modules for TT burning, including the mining pool, trade mining, secondary market repurchase, etc. As of March 1, 2023, more than 104 million TTs have been burned. In the long run, accompanied by the burning mechanism, the output speed of TT will slow down year by year. Furthermore, TT users will also tend to be diversified. In general, the demand for TT will remain greater than its supply on the market.
Underlying Logic of TT Price Growth —— Supply Stability + Good expectation
After understanding the supply mechanism of token economics, let's consider what factors will affect the expectation of TT demand?
- Liquidity Enhancement:
In early February, MetaTdex decentralized exchange (TT issuer) launched a trade mining service on the Polygon blockchain, increasing TT liquidity with a high turnover rate.
- Liquidity Injection:
After nearly 100 community campaigns around the world, TT-DAO has brought TT higher holdings, consensus and liquidity.
- Value Accumulation & Rising Expectation:
The strict KYC restrictions and tightened policies in Hong Kong have made it more difficult to invest in Hong Kong stocks. However, crypto-stock interoperability and meta-asset bridge, two innovative conceptions proposed by MetaTdex, provide a new way to invest in RWAs (Real World Assets) in the form of Web3.0 assets, building a liquidity access for the two capital markets. In the meantime, the release of MetaTdex's roadmap to Hong Kong stock market, as well as the steady progress of listing in Hong Kong and asset securitization, further increases the circulation value of TT, resulting in stable and universal rising expectations.
Liquidity Guarantee Mechanism —— "Earn", Earning-Guaranteed TT Investment Strategy
"Earn", launched by MetaTdex, is a 7-day unconditional refund service. This kind of service is unprecedented in the crypto market, especially the crypto exchange market. At present, MetaTdex has provided the 7-day unconditional refund service for TT, ETH and SHIB. When buying crypto assets through the Earn conversion pool, users no longer need to worry about the asset shrinkage caused by falling token prices. The daily quota of Earn conversion pool is 8 ETHs, 20,000 TTs and 1 billion SHIBs. Generally speaking, users have to the bear risks for platform token investments. But "Earn" offers users a robust investment strategy which is guaranteed by on-chain smart contracts. If TT price rises, users can get corresponding yields; If TT price falls, users can refund at the purchase price to avoid principal loss. This platform-based liquidity guarantee mechanism is able to further expand the value growth space of TT. TT Acquisition Methods
- MetaTdex decentralized exchange. TT is the value carrier of MetaTdex ecosystem, while MetaTdex is the core channel for users to conduct TT investments.
- secondary market conversion. There are multiple TT trading pairs in the spot trading market of MetaTdex, which can be utilized to convert for TT.
- trade mining. Users can obtain TT incentives via USDT/TT and MATIC/USDT transactions. If users trade on the Polygon chain of MetaTdex, they can split a daily prize pool of 27,000 TTs according to their trading volume proportion.
- Turbo Staking. Users can enjoy multiple yields by putting their TTs in the sharing pool of Turbo ecosystem.
- Token-Held Mining: The larger the quantity of TT is, the higher the computing power will be. When mining out 5,000 TTs, the computing power will be increased by 20% on the original basis.
- Time-Based Computing Power: The longer the mining time is, the higher the time-based computing power and yields will be.
- Build a mining farm and enjoy much higher yields. For example, if the token-held mining amount of a user is 500 TTs, he will get a 70%-250% yield generated from the mining farm.
Exchanges are the core gathering place for Web 3.0 users. Considering the wide user base and variety of platform tokens, it is essential for users to understand the deep logic and have a scientific cognition and judgment on platform tokens.