When UNI stops mining, what impact will it have on the currency price?
In the past two days, many media and investors in the circle have been paying close attention to one thing: the possible impact of UNI’s cessation of mining on the currency price.
The thing is this: As early as more than two months ago, Uniswap launched an event that benefited all early users---airdropped at least 400 UNI tokens to all users who participated in the early use of Uniswap. To start implementing liquidity mining rewards.
The four trading pairs are: ETH-DAI, ETH-USDC, ETH-USDT, and ETH-WBTC.
The liquidity mining launched by UNI at that time locked a large amount of ETH and WBTC in the past two months. And this liquidity mining will end on November 17th. Once the mining rewards are over, what will happen to the locked ETH and WBTC has aroused great concern from many investors.
The main focus of everyone's attention is whether these locked coins will flow into the market to suppress the prices of Ethereum and Bitcoin, and whether they will have any impact on the price of UNI tokens.
To analyze how the prices of these tokens will be affected, we need to look at the changes in their market supply and demand.
From a very intuitive speculation, after UNI stops mining, the supply and demand of these tokens will be as follows:
For UNI, after mining is stopped, the circulation of UNI tokens will not increase temporarily. Theoretically, when the demand remains the same, the supply decreases, that is to say, the selling pressure of UNI tokens becomes smaller, so the currency price will have an upward momentum.
For ETH and WBTC, after mining stops, the supply of these two tokens in the market will immediately increase. In theory, when the demand remains unchanged, the supply will increase, that is, the selling pressure will increase. The currency price of a currency has a downward trend.
Judging from the current market situation, the demand for UNI seems to be mainly for trading and investment. Therefore, after mining stops, if the demand of investors remains unchanged, the possibility of UNI rising is higher.
For ETH, the main demands of the market are in three aspects: trading and investment, ETH2.0 mortgage and mortgage mining of other decentralized exchanges. Among them, I think the transaction, investment and ETH2.0 mortgage will not change much after the mining stops, so the rest depends on whether this part of ETH will be taken by investors to other decentralized exchanges for liquidity mining. mine. This may be the reason that mainly affects the price of ETH currency.
If this part of ETH is accepted by other decentralized exchanges for liquidity mining, the price of ETH may not change much. If it cannot be accepted, ETH may fall.
For WBTC, the main market demand now lies in two aspects: trading and investment and mortgage mining of other decentralized exchanges. Its situation is similar to that of ETH. If it can be accepted by the liquidity mining needs of other decentralized exchanges, the price of Bitcoin may not change much. If it cannot be accepted, the price of Bitcoin may drop.
The above analysis is a very ideal theoretical analysis, the actual market will be affected by many complex and uncertain factors. Therefore, it is difficult to accurately predict how the currency price will go in the future. But basically there will only be three trends: plummeting, small-scale ups and downs, and skyrocketing.
The sharp drop here refers to the drop of more than 20%; the sharp rise refers to the increase of more than 20%. The fluctuations within 20% are considered small fluctuations.
For UNI, a sharp drop seems unlikely, and the high probability is a small range of ups and downs and skyrocketing. At the price as of this writing ($3.57), neither scenario seems to me too attractive, neither for a small profit nor for a A little drop and specifically bought. Of course, there is an exception for investors who have formulated a fixed investment plan, so for UNI, we just continue to wait and see.
For Ethereum and Bitcoin, skyrocketing seems unlikely, and the high probability is a small range of ups and downs and plummets. If it fluctuates up and down in a small range, in my opinion, it is not too attractive. Similarly, we don't need to sell for a small profit, nor do we need to buy for a little drop. We just continue to wait and see .
But if it is a sharp drop, for example, Bitcoin can fall from the current $16,000 to less than $10,000, and Ethereum can fall from the current $460 to less than $400, then friends who have read my articles for a long time will guess what I will do , That is to seize the opportunity to enter the market!
