Splinterlands: Will SPS Ever Be Worth 10 Dollars?
In this video I talk about market capitalization and what it means for SPS.
We learn how to calculate market capitalization, and the key pieces of information regarding it. This allows us to find out the total value of a token, and also the potential profit when entering positions.
As well, we go through some simple examples that show the difference between price and market cap, and how the valuations affect these prices. Just because a token price is more expensive, doesn’t mean it’s worth more when you dive further into the numbers.
We can categorize cryptocurrencies into three main categories which help quickly define their value.
Large Cap - 10 billion dollars or more
Mid Cap - 1-10 billion dollars
Small Cap - Less than 1 billion dollars.
It’s also important to understand how the supply affects the value of a crypto currency, so knowing the different between circulating supply and max total supply is equally important. This will obviously affect the value of SPS or any cryptocurrency in the long term.
So what happens when supply increases in a token? To put simply the value will accordingly decrease. However, to find out the exact differences, we use a handy tool to calculate market capitalizations on the fly.
There are popular mechanism and strategies used to increase the value of tokens that are diluted by supply, and that is called burning.
The goal of token burning is to remove a certain quantity of tokens from the circulating supply which in turn increases the value.
Tokens that are burned, are transferred into a frozen private address called a Burn address. It’s essentially a one-way address with no ability to reverse the transaction or withdraw the coins.
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It's an interesting thought experiment - $5 billion sounds like a lot in the context of a much smaller market cap on the cards.
However, Axie is around $7 billion so it's not without the bounds of possibility.
$1 billion doesn't sound at all unreasonable to my mind which actually puts the token price around where it is now once they're all printed.
Having said that, we've got to 'get there' first so I think SPS might well dip down a way before it starts to rise again.
Personally I'm going to start selling half my daily drop now for BNB and stick it in the BNB pool on Cub, takes the pain out of trying to time a buy-back if I sell it all now!
Either way, I'd like at least 500K SPS by the end of 2022. I can't see how value isn't going to flow to the token in the medium to long term.
This video will make me rich. Post more so I can easily be a Billionaire hehe!
Haha! You're already becoming a billionaire from all the giveaways you win! :D
Do they plan on burning SPS?
No concrete plans. I'm sure this will be point of conversation over the next few years though.
Just finished watching the video and all the while in my head was going why didn't you mention "this", then you did :) so vvery descripted and well done keep up the videos
Thank you for the support! Hopefully it was digestible enough for the masses. I just think it's a really important topic to cover and for others to understand.
Nice content
Thank you :)