What kind of platform currency is the most worth investing in? Value-added logic is quietly changing

As we all know, the value of the platform currency can be improved from two aspects - expanding the richness of application scenarios and rights and interests, encouraging purchases, thereby increasing the use value of the platform currency; reducing circulation through lock-up, destruction, etc., thereby increasing the value of the platform currency investment value. However, on the road of reducing circulation, the platform currency has basically peaked. Therefore, the author believes that the way to increase the value of the platform currency needs to be changed from reducing circulation to encouraging buying as soon as possible. At present, the digital currency trading platform is copying the gameplay of the Internet. The author starts from the perspective of the logic of the traditional Internet "human market" and believes thatIn terms of encouraging buying, the exchange can focus on three aspects in the future: "refined user classification", "building a financial chain ecology" and "deeply cultivating platform currency rights and interests".

Before explaining the above point of view, let’s first understand the current efforts made by mainstream exchanges to increase the value of platform tokens.

In terms of reducing circulation, the most common practice is to use part of the service fee or profit to repurchase and destroy the platform currency. For example, 20% of the quarterly income of Huobi Global and Huobi DM is used to repurchase and destroy HT; OKEx 30% of the currency transaction fee is used to repurchase and destroy OKB; Binance uses 20% of the profit to repurchase and destroy BNB. Of course, in terms of burning, Huobi has many other ways. In May 2018, Huobi launched Fasttrack, selling tokens at a discount through the project side, exchanging HT from users and destroying them; recently, a "replenishment ticket rule" was introduced, and users can purchase Huobi Prime (IEO) by spending 20HT. For the purchase share of 1000HT stalls (holding positions are often required to be shorter), the HT earned from ticket sales will also be destroyed on the same day.

In addition, the purpose of reducing circulation can also be achieved by encouraging positions and locking positions. For example, the three companies all have requirements for effective holdings in terms of IEO distribution lottery, in order to minimize the selling pressure during the gap period between the two IEOs; all three companies will conduct irregular airdrops of active currency to users with long-term holdings of platform currency; Merchants, listing project parties, super investors, open exchanges, etc. have margin lock-up requirements.

Of course, based on the deviation of their own business layout, the three companies also have many unique ways to encourage holding and locking positions. For example, the Huobi FastTrack campaign encourages users to continue to effectively hold positions within the two-period time span by controlling the number of votes available; when the project transfers, a certain amount of tokens will be sold at a low price to users who hold HT for a long time to encourage users to hold long-term positions. OKEx encourages Lv1 level users to hold OKB by hoarding coins to enjoy discounted handling fees. Binance encourages users to hold BNB by classifying users and providing more benefits for VIP users—the VIP level of users is divided according to the number of BNB holdings and trading volume. VIP users can enjoy higher loan amounts and lower interest rates. In terms of staking, Huobi provides users with HT staking services based on its own mining pool business.

From the above, we can see that mainstream exchanges try to reduce the circulation of platform tokens as much as possible by buying back and destroying, encouraging positions, and encouraging lockups. Reducing circulation is a very direct and effective way to increase the investment value of platform currency; and by building more application scenarios and enhancing the richness of rights and interests of platform currency to enhance the use value of platform currency, and finally achieve the goal of encouraging users to buy The goal often requires the cooperation of multiple parties, and the effect is relatively long.Therefore, most exchanges will consciously or even unintentionally choose to reduce circulation in the process of building platform currency value. This is a shortcut chosen by the exchange due to its lack of confidence in its own platform currency in enriching more usage scenarios.

The author believes that with the increasingly rich ecology of platform coins, the method of reducing circulation has become less and less suitable for the development model of platform coins, and the author believes that the improvement of the value of platform coins has basically peaked. Moreover, the platform currency, as the underlying Token of each public chain that is about to be launched—a token with practical application value, can even directly pay for items or services that are measurable with legal currency in the future. The currency price will tend to be stable in the long run, so With the radiation of its own ecology and the increase in the frequency of use, the number of platform coins should not be capped and can be issued indefinitely. Of course, at this stage, it is unrealistic for the platform currency to be completely used as a Utility Token.But there is no doubt that the way to increase the value of the platform currency needs to be changed from reducing circulation to encouraging buying as soon as possible. It can be said that the second half of the platform currency competition has already begun.Unlike reducing circulation and causing supply-side tightening, encourage buying directly from the demand side to increase the value of the platform currency.

At this stage, exchanges encourage users to buy platform tokens in a single way. It is mainly limited to specifying the platform currency as the only available token for certain types of marketing activities such as IEO, or using platform currency users to deduct handling fees to obtain higher discounts, etc. Based on the perspective of "market goods", the author believes that in terms of encouraging buying, the exchange can focus on three aspects: "refined user classification", "building a financial chain ecology" and "deeply cultivating platform currency rights and interests".

If there has been no killer application for the C-end, the incremental users of the exchange may have reached a bottleneck in the short term. As users are the most important liquidity resource of the exchange, it is imminent to refine the classification of users and complete the in-depth interest binding to enhance user stickiness. Moreover, the needs and sensitivities of different levels of users are completely different, and the ways to encourage buying will also be completely different."Refined user classification" is the premise of "building a financial chain ecology" and "deeply cultivating the rights and interests of platform tokens".

At present, the user classification of the exchange considers a relatively single dimension, and has not yet formed a complete awareness of the rights and interests of VIP users. In terms of user grading dimensions, at this stage, users are mainly divided into tiers based on the two dimensions of effective positions and trading volume. The author believes that in addition to this, the dimension of currency age weight (different from the time dimension considered by effective holdings) can also be considered to reward loyal currency holders. Everyone should establish the concept that coins have time value and will become more and more important. After the public chain is launched in the future, it can also comprehensively consider the user's on-chain transfer activity, on-chain Dapp participation, Dex transaction volume and other dimensions to finely classify users and form user portraits to provide more financial products on the chain in the future. Lay the foundation for precision marketing.

The binding of rights and interests is completed after fine-grained classification of users, which is also the main purpose of user classification. Different user levels can enjoy different platform rights and interests, which can be related to the participation qualifications of various rebate activities in the platform (old currency discounts, event currency airdrops), various service fee discounts (loan, currency, derivatives), various A variety of rights and interests (Staking, IEO qualifications, lock-up mining, community voting, 1v1 customer service support, tiered invitation cashback, platform revenue dividends) and so on are closely integrated.

At present, individual exchanges have begun to consciously bind high-level user rights and interests. For example, Binance launched a loan quota and interest grading system on August 9, 2019, providing high-level users with higher loan quotas and lower loan interest rates. On the Bibox platform, the locked platform currency BIX can become a "box core user", that is, a VIP user of the Bibox platform. Bibox is more bold in protecting the rights and interests of "box core users". Its Stellar Project (ie IEO) specially allocates 40% of the IEO share to "box core" users.

Even more refined, users can customize and package certain types of rights and interests according to their own needs. If they give up a certain rights and interests, they can get more benefits in other rights and interests. For example, large investors are more sensitive to handling fees, but have no need to participate in IEO, so they can give up their IEO qualifications and get a greater discount on handling fees.

Moreover, like mutual platform coins, multiple platforms can also jointly provide users with multi-platform shared VIP packaging services, so as to achieve the purpose of sharing user depth to a certain extent. On August 1, 2019, Huobi Futures released a VIP sharing plan, and the VIP of other offices is our VIP; Users with a VIP level on the trading platform can apply for a VIP level corresponding to the trading volume on Gate.io.

For an exchange, if it is going to be a public chain, the author thinks that the most suitable one is the financial chain. On the premise of completing user classification, financial services can be personalized for users of different levels. For example, building a mortgage loan Dapp on the financial chain requires different mortgage rates and service fees for different levels of users. In the mortgage lending scenario, the stable currency is borrowed by mortgaging the platform currency, and then the usage scenario for the stable currency is constructed. Among them, stablecoins are debt-type tokens. As long as users continue to pledge US dollars, stablecoins will continue to be issued. The total amount of platform tokens is a deflationary token under a series of destruction rules.In terms of price, the unlimited issuance of debt tokens through mortgage contraction token lending will undoubtedly have a strong boost to the price of contraction tokens.In terms of circulation, the mortgage mechanism can create a large amount of buying demand for the platform currency, and can also cause a large number of platform currency lockups. The mortgage platform currency lending stablecoin model can be said to serve multiple purposes.

In this regard, many exchanges have begun to deploy in advance. For example, in April 2019, OKLink and Prime Trust jointly launched the stablecoin USDK, which provides the possibility to mortgage the platform currency to borrow stablecoins - lock OKB to borrow USDK; similarly, in August 2019, Huobi and Paxos Trust jointly launched the stablecoin HUSD.

On the other hand, the Dapp ecosystem on the public chain will become a natural resource pool for exchanges to list coins. High-level users can be given the right to vote for currency listing, and users who are more active in the Dapp have greater voting weight. The user is equivalent to the brokerage side of the platform. After the currency listing is successful, the initial quota will be distributed according to the proportion of votes cast. This move created a lot of buying demand for the platform currency. What the HCoin platform is currently doing is to delegate power to users and form a "team model" to build its own currency brokerage system.

The platform currency is used as the hard currency of the exchange, and users should be able to do it inside the platform with the platform currency - "buy everything with the platform currency". On this basis, the membership level limits the top benefits you can buy. Consuming more platform currency can buy a higher membership level, and then purchase more rights and interests. As the demand for platform currency purchases increases, its application scenarios are also constructed accordingly.

For example, if you need to grab or rely on luck to win the IEO, you can directly purchase the IEO qualification with the platform currency. For example, in Huobi’s new ticket replacement rules mentioned above, users can use 20HT to purchase IEO qualifications. Memberships that can only be obtained by hoarding coins or swiping transaction volume can be purchased with platform coins to directly enjoy VIP supreme treatment. For example, in the VIP membership system recently launched by ZB, you can obtain VIP membership for free by locking the platform currency ZB, and you can also buy members directly with ZB. Different levels of membership have different prices. In addition, the Bissup membership system even increased prices in stages, hoping to form a FOMO effect.

In the process of encouraging users to buy, in fact, there will always be a sword of Damocles hanging over the user's head-how will the hundreds of millions of platform coins that are still locked be unlocked? When will it be unlocked? Will it have an impact on the currency price?The author believes that on the issue of the release of locked-up platform coins, it seems old-fashioned to buy a point card with a bonus platform coin, but it actually has a deep meaning-the change in user demand for point cards reflects the ups and downs of the platform’s transaction volume to a certain extent, and further reflects the Real-time valuation changes on the current trading platform. Unlocking platform tokens based on point card sales plays a role in dynamically releasing platform tokens according to the real-time development of the platform—if platform point card sales are smooth, the platform has a large transaction volume, and the platform is in good condition, more platform tokens can be released at the moment, otherwise on the contrary. In the Token economic model, only the improvement of productivity, the increase of production factors and means of production will promote the stable rise of the currency price, and dynamically adjust the release of tokens according to the status of the currency price increase, so as not to have a major impact on the currency price. It still reflects supply and demand.

Of course, it is too extreme to judge the release speed of the platform currency based on the user’s transaction volume demand reflected by the point card. The platform fee income can also be considered comprehensively. In the future, the number of active addresses on the public chain, transaction volume on the chain, and Defi lockup can also be added. Etc. This real-time adjusted release mechanism will not cause a large amount of selling pressure on the market.

To sum up, most of the current exchanges have chosen the shortcut of "reducing circulation" in terms of increasing the value of platform tokens. However, reducing circulation is unsustainable in the long run, and does not conform to the positioning of platform tokens as Tokens with practical application value. This method has become less and less suitable for the development of platform currency, and needs to be changed from reducing circulation to encouraging buying as soon as possible. In terms of encouraging buying, the exchange can focus on three aspects: "refined user classification", "building a financial chain ecology" and "deeply cultivating the rights and interests of platform tokens". Whether you admit it or not, platform currency is the "soul" of the trading platform, and the all-round ecological construction around platform currency is the core competition logic that exchanges should always pay attention to. In the future, with the gradual bifurcation of the underlying ecological development of the platform currency, each platform currency in the platform currency sector will gradually step out of its own independent market.

The above is the author’s thoughts on the future development of platform currency. If there is any dispute, please leave a message to discuss.