FDV: A Tale of Two Minds

A Tale of Two Minds

The Rational Mind

  1. Tokens allowed to be issued by the protocol
  2. Tokens trading at the exact price they do today
  • Protocol A has an FDV of $200mm. Its current market cap is $10mm (meaning 5% of the token has been issued). Protocol A plans to issue the remaining 95% of tokens over the next 95 days, and perhaps this plan is unknown to Token holders. Even if it is known, token holders watch their ownership % of floating token supply get diluted by a factor of 20x over this few month period and would have to impute price impacts over that period.
  • Protocol B has an uncapped supply. Its FDV is therefore infinite. But, Protocol B has controls in place to guarantee that its inflation schedule is 5% per year for the next 100 years. Token holders know from day 1 how much their ownership % will be diluted over time and can plan accordingly.
  • Protocol A has a high FDV, and 20% of the Max Possible Supply floats on the market. The protocol details a smart-contract guaranteed plan for issuing 80% of the Max Possible Supply over the next 4 years, so there’s a 100% probability that the supply reaches its cap in 4 years’ time.
  • Protocol B has the same high FDV, and 20% float. The 80% remaining are in a DAO treasury and can only be spent by the approval of existing token holders. This control fact alone significantly decreases the probability that many of these tokens ever see the light of day, as token holders are unlikely to dilute themselves unless there is a good reason to do so.

The Spirited Mind

Trust & Flexibility

Concluding Thoughts

UXD Burn Proposal

  • Burn 30% of UXP Governance Token Max Possible Supply, or 3 billion (3,000,000,000 UXP Tokens).
  • Burned Tokens will come from “Community Fund” which currently holds 57% of UXP Governance Token Max Possible Supply, or 5.7 billion (5,700,000,000 UXP Tokens).
  • Institutional UXP Governance Token Holders (such as Multicoin Capital) that we know have participated in the IDO will be asked not to vote on such a proposal.
  • UXP Core Team members will not vote on such a proposal.
  • Staked UXP Tokens will be able to vote on the proposal (details to follow).
  • Definitionally, this burn would increase the % ownership of all current UXP holders by ~43%, this includes all current holders, Team, Investors, Treasury, Token Sale, and any other UXP Gov token holders (staking rewards holders, discounted bond sale holders, etc).

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