Place/Date: Birmingham, United Kingdom - March 15th, 2018 at 9:29 am UTC · 5 min read
Source: Hamster Marketplace LLP
Token is the main element of each ICO, because it is the instrument for funds gathering. But frequently this is just a speculative element and project developers don’t pay a lot of attention to it after the ICO comes to an end. As a result — token buyers are not gaining what was promised.
Two main models of token usage — bounty-program payment and free trading at crypto exchanges exert pressure to any project and the whole ICO ecosystem. It is important to remember that the token is the main instrument of interaction between project initiators and token byers.
All token types could be divided in two main categories (it depends on provision models):
Both could freely be traded on crypto exchanges but their reliability, volatility and types of interaction with financial flows and crypto society are totally different. Almost all crypto investors currently considering their tokens as a tool for profiteering. The idea is simple: purchase at low cost and then sell at high cost. Pretty simple but effective.
Bounty-program participants exert additional pressure because they want to convert their tokens to fiat currency as soon as possible. And the token rate falls. In this situation ICO founders become hostages of their own instrument of investment promotion. Reputation and trust level fall together with token rate. But note that token rate dynamic is very important indicator of project “health” and its reputation. From now the token rate protection is a critical measure. So that is what makes Hamster Marketplace project unique — we are doing everything we can to support our token, HMT.
HMT is not only important investments promotion tool. It is an integral part of the Hamster Marketplace. Let’s see how it works. First of all, Hamster Marketplace is a non-profit platform. So all the funds will be used to protect the token rate after ICO completion and implementation of the commitments undertaken before ICO. The decision to make the token an integral, organic part of the whole ecosystem is a crucial one.
All the funds collected will be used to buy back of tokens with their subsequent “burning”. The main aim of this algorithm is to protect and withhold the token rate. We are ready to use all investors funds and vendors commissions for buying back of tokens and its subsequent elimination. We will continuously reduce tokens quantity in free circulation.
This mechanism has no signs and elements of a financial pyramid, where obligations to its earlier members are fulfilled by the funds of those who came to the system later. In our case, the financial flows are organized from the outside, due to vendor contributions, and the tokens purchased by them will be excluded from the project economy through burning.
Payment for a number of site services for vendors (advertising, promotion within the Hamster Marketplace) is possible only for HMT. Yes, this is another way to burn token. Hamster Marketplace vendors will have to use just their HMT as a payment for their products promotion. To get the tokens they have to buy them for fiat currency.
We are going to transfer the whole Marketplace to the members of Hamster ecosystem – to vendors. But the transition of main business will be carried out only after active development phase completion. All the funds raised will be used for buying back of tokens which will remain in free circulation.
Tokens spreaded during bounty-program exert a pressure on a future token rate. As it was mentioned above the so-called “bounty tokens” are pretty dangerous because their owners are not interested in further participation in the project and they usually try to sell their tokens as soon as possible. Thus, it leads to the sharp fall of tokens rate. If it happens it is almost impossible to return rate on its previous positions.
In many cases ICO initiators could use 0,5–10% of general tokens quantity to implement bounty-program. And this would lead to chaos and collapse of the whole system.
So that’s the reason we have chosen the following model: all the participants of bounty-program could get their payments in fiat currencies if they are not ready to wait for buy-back and want to get their money immediately. In the other case the participants will get their tokens only after platform private tests in 6 months. This moment is very crucial for the project and could raise the trust level in project’s community.
We hope that this way will provide possibility for seamless future development of the project.
It is not a big secret that some tokens are spreading among project founders. Sometimes those founders try quickly sell tokens at crypto exchanges. In some cases this helps them to become a millionaires.
But we are different. We want to show our plans to all participants of the project. Founders shares will be frozen for up to 9 months. And this will allow to exclude pretty substantial part of tokens from free circulation. This decision, as we see it, will help to support token’s future.
Guaranteed redemption was already mentioned before. The plan is the following: we will create the platform, develop it, support tokens rates. After the end of active development cycle we will sell the platform to our investors.
Raised funds will be used to buy back tokens (as well the parts of founders). We promise that all HMT owners will get the fixed income from this bay-back.
By doing so we are trying to do our best to support and protect the whole project. Our main aim is to make the Hamster Marketplace successful. We think that HMT is unique possibility for any experienced crypto investor as well as for electronic products makers, sellers and buyers.