[Steemhunt] How to protect the value of your token

Hi, @jayplayco here.

As we have the first IEO for a Steem and SMT based project, it will be interesting what kind of mechanism has been implemented to protect the value of HUNT tokens.

0. Repository

https://github.com/Steemhunt/web

1. Private Sale and Advisory Qty.

Source: Austin Distel
A lot of ICO's have a huge board of Advisors to impress investors. Unfortunately, it is not sure that they actually "advise" or are only selling their name value and getting Tokens in return. Additionally, private sales are a mechanism to give investors access to tokens with huge discounts. Together, these groups are one of the risks to dumb their token when a token get listed on an exchange. As an example, at the beginning of Tron, there was a FUD alert because a single account sold 11.2 Billion Tron tokens. For Tron, it was at the end a market maker trying to increase the liquidity. Having big quantities distributed to investors who are looking for really fast profit is difficult to handle when trying to protect the value of your token.

For Steemhunt there are almost no tokens distributed for this kind of cases so it will have no direct effect on the token price.

2. Minimize the effect of Timing

Source: Amanda Jones
ICO's tend to launch their tokens much later on an exchange then the actual date of ICO. It is also related to the fact that at the beginning a lot of projects didn't have a working product but only a whitepaper. Between this time the risk for the investors participating at an ICO (IEO) is getting higher, as the possibility for liquidity is limited. Also, it can (it had happened) that a project does not work out at all and a token does not get listed at an exchange nor shows a working product. Steemhunt's strategy is that their IEO is going to have a minimum delay (within a month) between the IEO and the listing at the first exchange.

3. Realistic Market Cap

Source: Coingecko
Based on the IEO price of 0.02USD we have a current market cap of 10 million USD. This is due to the changing market situation in between of place 230-250 based on @coingecko and at place 250 based on coinmarketcap.com. On the other side, Steemhunt is ranked between place 9th~21th at StateOfTheDapps, which gives it enough room to move itself up in market capitalization volume.

4. Higher bounty but also higher loyalty from hunters

Source: Kony Xyzx

As first mover Steemhunt decided to airdrop 50% of their tokens and use it as accelerator to increase their userbase. This has of course also a direct impact on the token distribution. But we have to look into details how this tokens have been distributed.

Compared to other projects, where it is mostly required to join a telegram channel or gathering enough referrals, Steemhunt concentrated to distribute the tokens to users who contributed to establish and build up the community. This is increasing the loyalty of Hunt token holders to Steemhunt.

• Sponsors : Without sponsors there would be no rewarding directly possible until SMT had been implemented correctly. Most of the sponsors are highly interested in the success of Steemhunt as a project, not only for Steemhunt but also for Steem. This comes with the specific situation that a delegation of Steem brings to the Steemhunt environment, as successful Steem based projects will help to increase the value not only for the project but also for Steem.
• SP Holders: This part was essential to increase the attention for Hunt tokens and also the number of holders. This airdrop has been completed already in the middle of last year.
• Contributors (promotion and voting), Daily activity: reward for active users at Steemhunt
• Social Shares: Social contributors getting the message on a daily base out to increase the userbase outside of Steem
• Role contributors: community-based roles for daily operations.

With a total 13% of the Qty distributed at the moment, the bounty qty is indeed not small, but Steemhunt had also implemented a few measurements to protect the value for all Hunt token holders.

a. Abusing

All token holders who got their tokens with abusing methods have been canceled last October 2018. Also hunters who are blacklisted (due to different abusings) don't get any tokens distributed.

b. Staking

To be able to further use Steemhunt and get rewarded it is crucial to have enough Hunt tokens kept in your current off-chain wallet. Based on your stake your User Score is directly effected. This means that if you have more Hunt tokens, it is better to keep them to have higher rewards and gain more Hunt tokens.

c. Withdraw limits

A lot of small token holders or a few whales could effect the market with dumps. To avoid these effects there is in the moment a minimum of 100 and a maximum of 10000 tokens per day withdraw limit from your off-chain Hunt wallet implemented. (Withdraw is not opened yet) As far as I am informed this can change based on the market situation.

5. Conclusion

Source: Clarisse Meyer

In the end, the market will decide what the right price for a token is and nobody is able to predict a number. But we can see here, that Steemhunt has prepared a lot to avoid typical errors that could affect the value of their token in a negative way.