Strategies for the MyBit token distribution

What is the MyBit Token Distribution?

The yearlong MyBit token distribution began on January 1st, 2019, and carries through till December 31st, 2019. This blog shares some opinions on how you can maximise the value you receive by contributing to the distribution.

The MyBit token distribution follows a staggered distribution model consisting of 365 individual 24-hour distribution periods. Each period takes place every day from 12:00UTC to 11:59UTC. After each 24-hour period is complete, 100,000 MYB is allocated to contributors at a rate determined by the amount of ETH contributed in the respective period.

Full details of the MyBit token distribution can be found here: https://medium.com/mybit-dapp/mybit-token-distribution-phase-2-b938ee231496

Example: let’s say that 65 ETH is contributed on day #137 of the token distribution. At 11:59 UTC on that day, the contribution window will close, and 100,000MYB will be distributed to contributors at the effective price described below.

i.e 100,000MYB / 65ETH = 1538.5 MYB per ETH = 0.000650 ETH per MYB on day #137

Strategy

The MyBit token distribution is an equal opportunity environment. It’s a great place for investors to put their thinking cap’s on and explore the various strategies they can use to help them acquire the most tokens for the lowest price.

Dollar Cost Averaging

Dollar-cost averaging is a great strategy for investing in anything. It reduces risk and balances out the volatility that investors can experience in a market over time. However, in the instance of the MyBit token distribution, dollar-cost averaging serves another important function, as it minimises the degree to which your own contributions compete with themselves.

Example: Alice and Bob both decide to contribute a total of 100 ETH to the MyBit token distribution.

Although Bob knows the distribution is yearlong, he elects to contribute his entire budget of 100 ETH on day #145. Let’s say for example that at the end of that distribution period a total of 115 ETH is contributed. Bob’s 100 ETH will entitle him to 86,956MYB (87%) for which he paid the effective price of 0.0016 ETH per MYB.

i.e (100,000 MYB / 115) = 869.6 MYB per ETH = 0.00115 ETH per MYB

Alice on the other hand, decides to follow a dollar-cost averaging strategy.

To implement the strategy, Alice calculates her approach by dividing the 100 ETH (amount of ETH she wants to contribute) by 365 (total number of distribution periods) to find out how much to contribute each day-

i.e 100 ETH/365 = 0.273 ETH

This means Alice will contribute 0.273 ETH to the MyBit token distribution -per day, every day.

Now, let’s look at what would have happened on day #147 if Bob was following a dollar-cost averaging strategy like Alice:

Instead of contributing the whole 100ETH on day #147, Bob contributes only 0.273 ETH, which combines with the other 15 ETH from other contributors.

i.e (100,000MYB / 15.273) = 6547.5MYB per ETH =0.0001527 ETH per MYB

Provided that day #147 is an average daily contribution rate, the dollar-cost averaging approach would equate to an 88% price saving for Bob over the course of the year!

Buying the Dip

Although dollar-cost averaging may technically be the best blanket strategy Alice or Bob can apply during the MyBit token distribution, there are certain scenarios which open the door for profitable adjustments to be made in real-time based on new information becoming available.

By investing more on days where the amount of ETH contributed is lower than average, Bob can acquire more tokens for a cheaper price than by strictly adhering to a dollar-cost averaging approach.

Example: Bob has closely been following the MyBit token distribution and notices that on day #177, only a fraction of the average daily contribution has been made. Using this new information, Bob makes an adjustment to his dollar-cost averaging strategy by contributing more ETH on day #177.

Ideally, the more extreme the deviation down from the average, the more Bob would contribute. However, it is important that he balance this decision with the opportunity cost of contributing more now rather than in a future period which may be even lower.

Timing

Now that strategy ideas for an overall approach have been introduced, it’s time to address strategy that is minute-to-minute.

As mentioned, the MyBit token distribution is conducted in 24-hour blocks (12:00UTC — 11:59UTC) every day in 2019. Because no-one can absolutely predict the behaviour of contributors ahead of time, a lot of valuable information only becomes available during each distribution period itself.

The closer to the end of each distribution period, the more complete the information, the bigger the advantage.

This reaches a pinnacle at the end of each window, where the effective price of MYB can be calculated more accurately than any time before for that period. This means that contributors can be more certain about the price, and therefore more able to capitalise on low price opportunities while avoiding paying high prices.

Arbitrage

Due to the MyBit token distribution being a completely separate entity from the existing exchange market for MYB, arbitrage opportunities are created wherein people can purchase MYB through the token distribution and sell it for a profit.

Arbitrage is the act of exchanging the same item in different locations in order to capitalise on the price differential between markets. It’s a common role that anyone can profit from by balancing supply and demand.

The lower the price of tokens are sold for in the MyBit token distribution in relation to the exchange rate, the more profit that is available to Arbitrageurs. By applying an optimal strategy to the MyBit token distribution, the more profit is available to arbitrageurs.

Research

Last, but certainly not least, research is a critical part of investment strategy. It’s extremely important to understand what you’re investing in, why you are doing it, and what the best way to do it is. When researching, make sure to utilise as many reputable sources as possible to make sure you have a balanced view.

MyBit has an extensive library of content that explains in detail all aspects of the MyBit vision and what the company is trying to achieve which can be viewed through the Website, Transparency Portal, and Gitbook.

Also understanding the problems currently faced in the mainstream financial world can help put into context the value of the products offered by MyBit and therefore the potential value of the token.

Also, don’t forget to do some research on yourself and your own situation. This includes understanding your own goals with your investments and how much is sensible for you to invest. Make sure that you don’t put yourself or those who depend on you in an uncomfortable position unnecessarily, this includes making sure that you to research the best strategy for ensuring your tokens are stored securely.

Conclusion

MyBit is a company built to empower everyone with the ability to participate in the financial world. Staying true to this idea, the MyBit token distribution provides equal opportunity to anyone with no entry barriers or disadvantages to any size contribution.

Contributions to the MyBit token distribution can be made with Metamask.

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