In a previous article devoted to the issue of development, I spoke about the distinction between the different types of crypto-currencies. In regards to the tokens used in a closed network, this question of value particularly thorny is regularly raised by investors the more conscientious. Some issuers have decided to hear them offering to pay to holders of the tokens for a reward, that might qualify as dividend.
The disadvantage of the token with respect to an action
The problem is the following : when you buy a share, you receive rights, such as the right to vote at general meetings, the right to receive dividends. But when you buy a token, in the vast majority of cases your sole right is to be able to sell it.
If it is an ICO, you fund the development of a business, but you get nothing in return if this is your tokens. Whereas if you purchase securities in an IPO, you get the benefit of the rights mentioned in the beginning of a paragraph. Investors on the crypto-currencies that are quoted before all don’t care : the objective is to buy cheap and sell when a peak will occur. But for investors who believe in the future, companies that develop through these tokens and which are caught as a long-term investment, they want more.
Some argue that the popularity of a service that is paid solely in crypto-currency native will cause an increase in organic demand this token. This application will lead to, according to them, on an increase of its value. Which would offer the return expected by the investors, without the need to put in place a mechanism of redistribution of profits. This scenario remains however to be validated by the facts. Because if the cost of a service are expressed in euros or in dollars (which will be the case, because nobody is willing to pay in a currency volatility), the value of the token does not matter. Specifically, if I have to pay 5 € for a good or service tokens, it has a value of 0.1 or 100 € there was no kind of importance. If it is 0,1 €, I bought a 50, if it is worth 100 € I buy 0.05 and I pay.
And if you up the sub with our cryptos ? Source Pixabay
Only the hoarding of these tokens by the ” hodlers “, justified by the prospect that their value will increase, may encourage investors to come into the market to cause prices to rise. An environment that is highly inflationary, it would encourage this hoarding, but it was currently far away. To obtain this positive environment for the enhancement of the chips, offer performance in any shape or form is the most effective approach. It is found in more and more of ICO.
The crypto-currencies that offer a yield
In addition to crypto-currencies in the strict sense of the term which yield interest (as DigitalNote, Rebellious, and others), you can obtain a reward as a result of some tokens. It is not an exhaustive list, but here are a few crypto-currencies that I know of and that have this feature :
- Caviar : the token in ICO, the value of which is backed by a funds mixed real estate/cryptos, can collect 75% of the profits generated by the fund every 3 months.
- Bankera : this future bank, that incorporates into its payment solutions in the crypto-currencies, redistributes 20 % of its profits transaction to the holders of the chips.
- Taas : investment funds in crypto-currencies. 50 % of profits are distributed each quarter to the holders of the chips.
- DIGX DAO : the holders of the tokens DIGX DAO receive a portion of the costs of storage of the gold which supports the value of the crypto-currency DIGIX.
The problem posed by crypto-currencies for dividends
We are going to attend to the generalization of this model ? Nothing is less sure. Some issuers are reluctant to adopt it, for legal reasons. By offering what can be called a dividend, the token may fall under the purview of the legislation which governs the securities. Personally, I tend to favour this kind of crypto-currency when I make a ICO, but I’m well aware of the legal risk of such an approach. Hence the need for the major nations of this world finally decide on the question of the legal status of crypto-currencies, once and for all.
Other issuers have chosen a method alternative route to deliver performance in supporting the price of the tokens issued, which is akin to the redemption of securities. Instead of directly distribute dividends to the owners of the tokens via the profits, these are used to buy market tokens, which are then destroyed. This causes a mechanical increase of the price of the crypto-currency, according to the supply of law and demand, which will reward investors. Without risk of getting slapped on the fingers by the regulators. In a few days, I will write an article dedicated to these crypto-currencies that can be considered deflationary, and that I particularly appreciate.