We are quickly reaching a state of overwhelm. People are starting to post about what to do with these different tokens. I saw a title that basically said people were idiots to sell the airdropped tokens. Others are taking the opposite approach.
So let us go through it.
Of course, this is the proverbial this is not financial advice.
Tokens = Projects
I will start by saying that a token equals a project. There is a reason the person put it together. That said, there are many different types of tokens.
Some were created just for fun like cookies, beer, and, drama. They are passed around as a way for the community to spread a bit of levity. The goal is not to create a top 10 token nor to have a major project.
We also are seeing some tokens related to some people'e services. This is a way of branding and of transacting with the individual regarding his or her service. @abh12345 put together the Engagement token to pull charts pertaining to the Steem blockchain.
There are ENG tokens which is the currency for the Steem-Engine exchange. We are seeing a lot of exchange across the spectrum bring out their own token.
Then there are, of course, the ones related to the applications. HUNT, AFIT, DLike, etc.. all pertain to the specific application. The goal is to build an ecosystem around that app which will create a use for the token. Some already have basic use cases.
I am sure there are others but it gives us an idea of what we are looking at.
Lottery Tickets
We are in the early stages of this entire industry. The truth is that it is impossible to predict what is going to take place in the future. We can get an idea by trends and what we see unfolding but it is still speculation.
This is magnified when we move away from main tokens into these different projects. Who knows which communities or applications will succeed. Basically, it is all a guess.
That is why I consider tokens to be akin to lottery tickets. Just like the lottery, hit on one and the payoff can be massive. Along the same lines, there are going to by a number of duds in there.
Stronger Hands
Tokens need to be in the strongest hands possible. This usually means those who are active and going to work to assist the project. When tokens are airdropped and dumped, the ones selling are obviously not believers in the project. The selling process is shaking out the weak hands.
There is nothing wrong with this. It sucks in the short term yet can be beneficial in the long run. Nobody likes to see massive sell walls on exchanges for something they are involved in. Those of us holding STEEM know how tough it can be.
Ultimately, the weak hands are cleared out and the resulting token distribution is in the hands of those who are dedicated to that project. On Steem, this is vital since many of the tokens follow the P.O.B. concept which entails the Voting Power. Having the stake in the hands of people who are actually going to use it is a big boost to the community.
Stronger hands lead to less sell pressure.
These are a few of the basics as I see them. So what do we do?
This is, naturally, up to the individual and there are a variety of approaches.
I will start by saying this: just holding a token is helping that project out. Along the lines of the stronger hands, when a batch is staked/powered up, this removes it from the liquid float. That can help the token by showing it is in stronger hands. It also reduces the available liquid supply should buying interest pick up massively.
There are, of course, projects were are more optimistic about and spend time being involved with. This gets us into the "attention limitation" category. How are you going to participate and help these different projects along? How many can you realistically support because of time?
It is here where some of the decision making can take place. Personally, I prefer to load up on those projects I believe in knowing they all are lottery tickets. Typically, the stake acquired can be used to help grow my own holdings while also providing a collective benefit to the project. Since many offer delegation, I can help out by putting my stake's use in the hands of someone else who is going to utilize it.
Tokens are a great way to introduce people to a project. For this reason, I expect airdrops to continue. Also, we are seeing different applications starting to partner up meaning people are getting paid in multiple tokens. The stacking of them is spreading the distribution out to a lot more people. Unfortunately, even that is creating the same situation where people have a lot of tokens for projects they are not involved in.
The bottom line is each of us has to do what he or she thinks best. There is nothing wrong with selling tokens you just received. Nor is the choice to hold all the lottery tickets that come in any less optimal. Personally, a blend of the two might be the best.
No matter what is decided, this is going to continue so it is best to determine what works for you. If having tokens in 100 different projects in hopes that a handful of them take off is to your liking, go for it. However, if you are one who prefers to keep your holdings "neat" only concentrating on those projects you personally are working on, then have at it.
The point is there is no right or wrong way to approach it. Personally, no matter what the approach, one who is keeping the holdings within the Steem ecosystem are helping out. Swapping out one token for another is still supporting the ecosystem We are not going to get around the fact that there are certain projects we are going to feel more confident about, which might provide greater reason for holding that token.
The only thing I can suggest is, after watching investors for years, to find a system that works for you and stick to it. Warren Buffett is considered one of the greatest investors of all time yet his investment style has not changed in half a century. He remains committed to value which served him well. He does not hop from one strategy to another based upon whim or the latest "fad" trend.
This makes sense to me. Whatever your preference, do what you feel will work best for you and stick to it. If that means selling every token other than the half a dozen or so you are actively involved in, then do that. However, you might be one who prefers to own one of every token that comes on the market. With that preference, buy away.
At the end of the K.I.S.S. works the best. Do whatever you need to so that your approach is simplified to the degree it can be repeated over and over.
Complexity is not our friend on this end.
If you found this article informative, please give an upvote and resteem.
There are just too many tokens. Overabundance is never a good thing.
No offence, but who are you to say that? Who is anybody?
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As stated below in the comments, there is a lack of liquidity and users just like there too many cryptos out there.(over 2000)
Eventually most will vanish. Hopefully Steem and its tokens will survive. We need to attract new users and businesses.
Yes, we do need new users and businesses. But I'm not bothered by the large number of tokens in the least. This is all about free enterprise. Free money, however little, is always welcome. Bring it on. What I'd prefer, though, is better tools to filter the tokens in my wallet and on the markets according to various criteria. But I'm no fussy baby who has to get everything right now on a gold platter or else. It'll take some time to work out the kinks and to refine the resources that very recently came online.
I'll take overabundance in my bank account any day.
Overabundance in my fridge.. no thank you, what a waste. But enough abundance to fill my fridge whenever I want? Yes please.
Me too. But without liquidity, they’re worthless.
There is certainly an overabundance of cryptocurrencies and tokens out there on the market right now. With the introduction of these new Steem-engine tokens I think the market has been proliferated by too many new markets too quickly. Looking at the actual site you'll see that they are all lacking liquidity and users right now which is to be expected but this makes for a pretty rough experience for buyers/sellers. The price spreads are insane on some of these coins with literally nobody there to offer bids.
I forsee a few of these more popular projects sticking it out but for the most part what will happens is many of them will fade out. Their prices will show gradual decline until an eventual flatline happens and the community completely forgets and abandons them.
100% agree. There is a lack of liquidity and users. The issue is that all tribes (including ours) have only tapped into the volume and userbase which Steem provides.
It’s amazing that a tribe can launch on Steem and get such an overwhelming response from the community right off the bat. On the other hand, there are only a couple thousand highly active users on Steem. If all of us tribes only tap into this userbase and don’t attract outside attention, we will all slowly fade into the dust.
The key is to attract people from outside of Steem. Easier said than done, but with time there will be at least a few tribes who will solve the puzzle and get some users onto our interfaces who’ve never used Steem before.
I've thought about ways we could do this but the hard part is that you have to convince them to create a STEEM account somehow and then to buy and use STEEM. Maybe there will be some way to create these light accounts they have been talking about that will be able to transact STEEM but not comment or vote.
Hi @steem.leo
Is there any way to contact you via DM?
Cheers, Piotr
I agree with this and think it hits the nail on the head. The projects that develop a growing community are going to be the ones that succeed and, in turn, see their token have value. The flip side is those that do not, will drift off into the sunset.
It all comes down to ecosystem (community). One that is thriving and active stands a chance. It is up to the community to help bring in new people. Steemleo needs to target investors....actifit needs fitness and exercise people....splinterlands needs gamers....sportstalk needs sports fans.
I think that many tokens and indeed cryptos in general are just a way for the creators to make easy money.
In the case of these new SCOT tokens I think that the main fundamental is community. If you find a strong community around a SCOT then invest in it. This means stake the token, but it also means invest some social capital. Engage people in comments sections. Invest yourself in the community.
And of course the biggest thing here is that we are still invested in Steem while at the same time, spreading out influence on the chain.
This is all still about network ownership. In the end when someone finds a way to onboard normies, the investors get paid. How much depends on stake in th network and the communities that control the network.
Also: this isn't financial advice. To me this is the only possible end game for Steem, but do your own research.
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I'm only tagging hypotribe on my posts.. That and mobilizesteem, steem engine is far too pathetic for me to fool with as a mobile user and I'm finished supporting anything on this chain that doesn't work towards providing a post y2k mobile design..sold em all or in the process anyway
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Dear @taskmaster4450
Very true. I was wondering lately how much would new project could potentially require (financial backup) to buy back those airdrops being dumped. That must be very costly method of distributing tokens and marketing project.
Yours,
Piotr