The bull case for Travala ($AVA)

empoderat (72)in LeoFinance • 6 years ago (edited)

A few days ago I got engaged in a conversation about one of my favourite projects, Travala and the $AVA token.

Seeing that a few comments on the post (originally authored by @revisesociology) draw a lot of positive attention, I decided to make an analysis of the main points of the AVA tokenomics.

This isn't a 'general' post about what is/ whatnot Travala. You have plenty of these on the web. The best place to get started about Travala is their website and of course their whitepaper.

If you don't know anything about the project, please start there.

A quick recap of AVA Use-cases:

Most tokens have at least a few use-cases. Not all of them are equally important and Travala isn't an exception. Let's recap!

Payments into the platform
Givebacks
SMART Program
AVA Repurchasing Plan
Best Price Guarantee
INVITE Program
Review Rewards (Soon®)
TravalAds (Soon®)
Listing Fees
Community Voting (Soon®)

From all of these use cases, and with the information that I have right now, I can say that the most impactful ones will surely be the 'Givebacks', 'SMART Program' & the 'AVA Repurchasing Plan'.

In the future, I'm sure that the 'Smart Reviews, the TravalAds & the Community Voting will also have great relevance, but because they're not live yet, I'm not dedicating them time as it would be 100% speculation and I don't know the details, I'm only an (old) community member.

Let's analyze the Token Metrics, shortly after I'm analyzing the 3 'core' usecases.

$AVA Token Metrics

Total Supply: 61,125,269
Circulating Supply: 46,241,517 AVA (~75% of the total).

The Travala token is a BEP2 asset in the Binance Chain and a BEP20 asset in the Binance Smart Chain (check links for explorers).

3# Core Usecase: AVA Repurchasing Plan

Although, I see it as an extension of the 'Giveback' use case (which I'll comment later). This alone doesn't make the AVA Repurchasing plan ('Burn') less relevant.

The premise is simple.

20% of the NET revenue of the platform is being used to buy back & burn AVA tokens from the token market. We had like ~5 burning events in the past (you can check them there.

From the whitepaper: ''the AVA Repurchasing Plan will take place every quarter until 21,571,086 AVA are permanently destroyed''.

This equals to 35% of the Initial supply of ~61M tokens.

More revenue --> + tokens burned forever --> + scarcity --> + price appreciation.

2# Core Usecase: SMART Program

This one is my personal favourite because it drives up by orders of magnitude the incentives to buy&hold AVA.

The Smart Program is a tiered system built into the Travala Website where you can 'lock' your tokens for a minimum of 30 days and receive a lot of advantages Vs regular customers.

Main advantages are

up to 2-5% discounts on bookings/accommodations.
up to 2-5% givebacks.
bonus payment of 24% APR ( 2% paid monthly in AVA & Travel Credits)
Extra discount of an extra 3% if you pay your booking full in AVA.

smart levels.png

All these tokens are locked there:

https://binance.mintscan.io/account/bnb1p0pjxe84wcpygy8esulksqtljyp8ljhvk0k3p6

It's cool because you can track in real-time new users becoming Smart.
Don't you think the same?

IMO this is how you build a hybrid business with the best of both worlds (efficiency of centralized models; trust/transparency of decentralized models.

Outside of that, AVA locked into Smart are tokens out of circulation and currently, they account for 11,06M tokens.

Yes, it's almost the ~24% of the circulating supply.

A few users build amazing information pages around all the verifiable information of what we can dispose of. My two favourite are:

Travala Dashboard. From Cryptonico31.
Travala Platform Growth. From gilcn

Please give those guys a follow because their work is truly worth it.

(And while we talk, more users keep locking up their AVA tokens).

Have you ever thought that if we divide the total current supply (~61,24M) between the Smart5 membership value (5000 AVA), we can have only ~12.250 Smart 5 spots?

If we take into consideration the future supply of 40M, the given number is 8000.

Not counting givebacks, user & exchanges balances, company reserves... real available supply of AVA is very, very limited...

Some people say that the real number of 'realistic top' of Smart5 memberships are 2500-4000 spots. As price increases, it gets prohibitive to become Smart5.

Just to put things in perspective, When the Smart Program was released you can acquire 5K tokens for 500$. Today price is 7400$ for that same amount of tokens.

Think about top tier cards on Swipe or Crypto.com to see where this is going.

1# Core Usecase: Givebacks

In my humble opinion, this is the mother of all the use cases.

What does it mean/imply?

Means that any purchase made on Travala.com carries a 2-5% giveback (according to Smart level) of AVA paid back to you after your booking. Key points:

You DON'T need to pay with AVA to receive this giveback.
You DON'T need to be Smart member to receive this giveback.

That means that every user, Irrespective of their origin, gets AVA even if he/she don't know anything about bitcoin or the crypto industry.

A lot of people are going to discover/getting familiarized with the Crypto industry thanks to AVA. This is going the first token that many will have.

The user just receives an email... saying that he received some money back. Then he discovers about the token and decides to become smart (because he/she loves to travel) ... or not!

Whatever case it's a win-win. You're getting a recurring customer & increasing revenue if the user decides to use the token to become smart/booking. If the user never comes back (would be strange), you'd have some AVA dust locked into a wallet. Given enough time, this only improves AVA distribution as a lot of AVA is being airdropped constantly.

Not 15,77 AVA, but still... (Sorry it's an OG joke).

Let's run some fun numbers assuming that Travala keeps growing at this monstrous pace.

The `Real' Bull case for Travala

I'm going to use this image from the Travala Whitepaper; 'Financial Projection' section.

According to this image (pre-covid I should say, so please take this in mind). Let's imagine for a moment that Travala manages to score the 160M Revenue/Year by the end of 2023.

Booking Holdings generated 15,07 billion in revenue ($) in 2019. That equals to 1,25B/month in revenue. Net Revenue of 4,85B (1/3 of the gross revenue).

1% of that is 12,5M and this is what Travala is aiming for by the end of 2023. Seeing the current rate of growth, pretty achievable If you ask me.

160M year = 13,33M /month.

What would be the Giveback & Burn rate with 13,33M in monthly revenue?

I'm going to use 12M in revenue for the sake of simplicity.

Burns

Assuming that the net revenue of Booking was 1/3 of the gross revenue, let's assume that Travala one is 1/7 (14,28% of gross revenue).

14,28% of 12M equals to 171.361$ * 3 months = ~514K$

20% of that equals to ~102.000$ being bought back & burned every 3 months.

At current prices (~2$/AVA) that would equal to 51.000 AVA or 0,11% of the circulating supply being removed from circulation every 3 months.

Givebacks

Assuming 12M in revenue, 2% of that equals to 240.000$ /month being bought from the open market in a continuous way.

At 2$/AVA, equals to 120.000 AVA or 0,26% of the circulating supply.

The best part about this is that for whatever reason the AVA price drops to very low levels (0,5$ or less, for example). Then (obvioysly) the amount of AVA burned/being given back increases by orders of magnitude.

At 0,5$ AVA, and 240.000$/month, the amount being bought back accounts to 480.000 AVA /month. Or 1% of the circulating supply.

Running the same numbers but with the burn example, we would add 200.000 AVA more.

Which in total would be burning 1,5% of the circulating supply on a monthly basis.

Simply said, there's not enough AVA left in exchanges to satisfy this continuous (magic word here) demand.

Summary

As the revenue of the business keeps increasing, the 'natural' price floor for the AVA token will keep increasing as more & more tokens are being bought & removed from open markets.

I'm not factoring all the other use cases or the current distribution. Also not counting future integrations like Flights & Activities (also coming Soon®).

Seeing this project grow since late 2018 - early 2019, I can say that they have a lot of things in the pipeline. And they are that kind of teams used to overdeliver & underpromise. A lovely combination for us holders.

if I were you, I would pick a Smart membership (the one that you can afford) soon, a friend told me that they're pretty scarce.

In my humble opinion, Travala is a promising business with a lot of value to keep up the value of their token in a healthy way, without shady tactics or pump & dumps.

If you want/require more information or just have any other doubt, let me a comment below. I'll gladly help.

Disclaimer: I OWN AVA, so obviously I'm biased. So please DYOR.

Thanks for reading!

EDIT: typos, couple additions to giveback section

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