Maidsafecoin equals around 10% of the supply of Safecoin. Currently it is the only tradable fraction of Safecoin.
The problem is that upon a relase with Safecoin integration, an additional 10% of the supply will be introduced (that is set aside for early investors/ friends and family [5%] and open source developers [5%]) plus an additional 10% for App developers.
So effectively the currently available supply will double or even triple upon launch, which is surely not going to please speculators/ investors. The only question is how fast the additions are released, does anybody have an answer to that? I suppose at least the 5% for early investors will be tradable immediately at launch.
I think the real speculators and investors are the ones who make applications, and farm the Safe Network, and I think the influx of those coins is going to please many of them.
Well that is unfounded speculation. What if some of them will need the money that has been locked for so long?Just look how many people already sold Maidsafecoin after a much shorter holding time (not all of them can be lucky Mastercoin holders).
If it is a fact that the additional 5% of Safecoin will become immediately tradable (I am not sure of this) then this makes it economically absolutely unreasonable to buy Maidsafecoin now.
The current safecoin value would be around 1/20th of their equity value, so you are 100% spot on here. Over time if/when safecoin increases in value, many of the equity holders of maidsafe will have the chance to sell their equity to the foundation (who holds the 5% fro this purpose specifically) and cash in. So that 5% will not be making much of an appearance and some may even burn (if an equity holder chooses not to sell).
It is these reasons that make me comfortable it’s not destructive. So on launch the coins that appear will be earned/farmed etc. and there should not be a pile getting dumped anywhere that I can see. So I think we are OK.
I also think the 5% for equity folks will circulate anyway so gradually get back into the network, which is good. I think the same for the crowdsale folks, as they cash out the coins do what they are best at, and that is running the network etc. I feel somehow it all balances out as long as we keep it super simple.
Thanks for your reply. Just for the record, I fully support this awesome project and will through farming. I am just unsure if an investment in Maidsafecoin now would make sense and I think (somewhat) harsh critique is the best way to find out.
Doubting is a healthy behavior but i don’t think the price are going to fall because we are next to an increase of liquity. In fact, we are leaving a kind of “cryptocurrency pet” to replace that for a wonderful token with a huge intrinsec value.
The idea is to increase the size of the pie, so everyone’s slice is worth more in total even though it is a smaller slice relative to the whole pie, the pie is bigger so the slice is bigger.
If the network launches, and has app developers earning coins, and farmers earning coins, then the value is going to be more than 3x the value of a project that everyone agrees would be great if it worked, but isn’t working.
Also, as others have said, the supply increase is not “upon launch”, it is over time as computational resources and working apps are contributed to the network. By definition of the rewards compensation, the amount of safecoin paid for these resources can be made less than the value they add to the network, so each increment of safecoin issued will increase the total value of the network enough to account for the issuance.
The other thing to look at is that, as the network goes live and functional, masses of more people will be moving into the space, creating a demand for safecoin to both buy network services and use it to trade otherwise. So even if some crowdsale investors and equity holders decided to offload their share, there would be A LOT more participants to absorb them. Yeah, any time somebody dumps a huge chunk at once, you see a price slump, but who wants to erode their own value by doing it that way? Even if somebody wants to liquidate a lot, it can be done in such a way as to maintain a reasonable price by not shocking the market. Moderate rate of dump, or do off-exchange trades privately.
Don’t see a situation here, because if the network delivers anything like what’s promised, the influx of users and developers, and thus investors, will be the biggest factor.
I agree with @fergish and @lowry_jim that when the network is proven and operational that instantly increases it’s value considerably.
As a result, current purely speculative valuations of the network are likely to increase, and new investors are going to snap up coins that at this point look cheap until the price rises enough to reduce that demand. No guarantees, but that’s what seems more likely to me.
@dirvine are you saying that equity holders effectively have a rolling option to sell their coins in forfeiture of their MaidSafe Ltd. shares (in proportion), or to sell their shares to the foundation while forfeiting their coin (in proportion)? It’s hard to describe let alone to tie up legally!
But demand will not increase instantly. Demand will take time to build.
As I understand, the network itself regulates the Safecoin issuance by reacting to increased demand. But what it cannot react to is the additional supply that is introduced via the lots that are set aside. Ok they won’t be released ‘upon launch’ but it will still increase the supply drastically, perhaps much stronger then the initial demand that will take some time to develop. (perhaps years)
@Felixx what you say is true - both those kinds of demands (buy/sell for network use) will build over time. But I was talking about speculative demand which can, and I suggest would, move very fast. If there’s an undervalued asset around, it quickly gets bought until it reaches a fair price. My point is that this will dominate any effect from new coins being released, from all the sources mentioned.
