If you were a SMT, how would you create value and how would you be traded??

View this answer on Musing.io

I think that the biggest thing that all of the potential SMT issuers need to consider is this: What will attract people to buy these tokens?  I can see a number of Dapps airdropping tokens on their users.  Distribution of a lot of these SMT's that are already in the works is being done quite quickly at the moment.  However, it is one thing to distribute an SMT to users of your Dapp, It is a totally different proposition to draw people to want to buy those tokens.

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Let me explain why this is so important in my view.  If lots of users, and Steemian's in general hold tokens in your future Dapp, then that's great.  But what are those tokens going to be used for.  The Dapp will probably have to keep giving them out to keep encouraging users on their App.  

I will use @dlike as an example.  I think Dlike is a good App, and has great potential.  I would like to see its users put in a bit more effort at times, and provide their own thoughts on the link they share, instead of just posting a link and that's it.  However, it has potential as people on social media like to share articles and things they enjoy.  At the moment, Dlike tokens are relatively easy to earn.  Share a few links each day, and comment on a few links from other people and you can quickly stockpile a bunch of future SMT's.  That's great, but what are you going to do with them? When they are converted to real life tokens that have a trading pair with STEEM and an internal market that is easy to use, how many of those tokens will just get dumped on the market? Who will buy them? Why?  This is not a criticism aimed at Dlike specifically, just a general observation.  I used the case of Dlike purely for example purposes.

I think that many of these Dapp's need to carefully consider the purpose and future use of their SMT's.  What will be the draw-card for people to want to HODL your token long term.  What will make people want to buy more.  If the main draw-card will be that users can redeem tokens for Steem up-votes, then that is just another form of vote buying.  The tokens need a value, they need to have a purpose beyond just distribution and as a marketing tool to get more people to use your App.

Again, I believe there is one Dapp that is ahead of it's peers in this regard.  And again that is @steemhunt.  They are currently distributing tokens, and where one of the first to do so.  They are keen to put their tokens in the hands of Steemians and users of their site.  Terrific, good stuff.  But they have a plan for beyond just distribution.  The tokens they are airdropping at the moment will have utility, and a significant amount of utility I believe.  @steemhunt is just a small part of their plans, 

From their website:

1. Hunters earn HUNT tokens by sharing/up-voting cool new products on Steemhunt community. Makers can also be hunters by sharing their own products.
2. Makers buy HUNT tokens to post bounties or sell products with discounted prices in Reviewhunt in return for quality reviews. Hunters can use HUNT tokens to purchase products or earn tokens from makers.
3. Makers run crowdfunding campaigns in Ideahunt. Hunters can use their HUNT tokens to participate/purchase products.

These are quotes from their site and very illustrative.  Two out of three of their stated plans for the HUNT token are about uses of them.  They are the utility and the reason why people will want to buy and hold HUNT tokens.  

This is the most important aspect I think many SMT's need to put more time into considering, or explain better.  What is your SMT's purpose??? What is the economy that you are trying to create for your token.  I really believe SMT's are going to drive the future of STEEM.  But I also believe many will fail.  That is because it is easy to give people free tokens (or practically free, just requiring a bit of effort on your App).  What is harder and requires a hell of a lot more planning and foresight is building a use-case that people will buy into and drive demand for the token beyond just free supply.

I hope that you find this response helpful,

Thanks for reading,

John.

*This post was created as an answer to a question on musing.io and cross posted to appear on my blog as I was quite pleased with my effort. Please share your own thoughts in the comments.*