Do you think a 100x payout is a good return? I think most people would say this is the case. Anyone investing in the stock market would be thrilled to own a stock that goes from, say, $2 to $200. That is an absolute gem.
When looking in the world of cryptocurrency, even on Steem, how possible is this?
I think there are going to be a number of projects that hit this and provide people with a basis for wealth. I wrote a post about this earlier regarding how cryptocurrency does provide a solution to the inaccessibility of out-sized returns that a few enjoy.
So let us use Steemleo as an example and see what we come up with.
At present the price of LEO compared to STEEM is .19 according to the last trade. With STEEM at .125 compared to the USD, we have a price of LEO at 2.375 cents.
This is our starting point.
One advantage we have is that we are dealing with three currencies in this instance. Thus, we could see exponential returns when converting all the way to fiat. Therefore, when looking for a 100x, we are able to ascertain this in a few ways.
We could get to that end with a 10x X another 10x. If the price of LEO heads to 1.90 STEEM while STEEM goes to $1.25, that would give us our $2.375 LEO in USD. That is 100x the present price.
Perhaps a 10x on LEO compared to STEEM is unrealistic. That can be offset by a larger increase in STEEM. We know that STEEM has been much higher than $1.25 so can we see a price of $2.50? Does anyone think that an outrageous price considering all that is taking place?
If we go with that, we then only need a 5x on LEO, putting it at .95 which also gives us $2.375 per token.
Naturally, fun with numbers tend not to reflect what takes place in the real world. Even though markets have a mind of their own, there usually has to be something to substantiate a move higher when looking at value. Ultimately, a run up in the value of STEEM should be offset by a decline in the token it is paired with, in this case LEO.
That is, unless the value of the Steemleo ecosystem increase. In this scenario, we are going to presume that the development team keeps expanding the functionality of the site with more offerings being brought online. At the same time, over time, we are going to expect more users as they are presented with value through the features offered by the platform.
At present, according to the Steemleo website, there are just shy of 4 million LEO tokens.
Using some fancy math (multiplication), the $2.37 token goal for 100x brings the total value, at roughly 4 million tokens, to $9.5 million.
A $10 million website is a very valuable website. However, we are dealing with more than just a website. Tokenization essentially creates an economy, which is more valuable than companies or websites. Of course, with economies there need to be activity. Larger economies are worth a lot more than smaller ones. Thus, production, in whatever capacity, is essential.
Again, we are having to take some liberties with our forecasting here. However we know there is a lot more to Steemleo than just a simple website for people to add content. There is an exchange (interface) which allows for the trading of certain tokens. This adds a fair bit of value as the tokens are instantly liquid as compared to another currency. This is a much bigger advantage over reward points.
There is also a store coming online. A market place here adds more value than just a store on a website. Under the later, some type of fiat us used which does not add to the ecosystem. Here, the LEO token is enhanced by the use case. The USD is the most valuable currency in the world, not because the U.S economy is the largest but, rather, because it is the reserve currency.
Finally, usage is vital. If there are only a few hundred users of Steemleo, the ultimate value is not going to be great. However, if the platform is able to a fraction of the traffic that Seeking Alpha and Yahoo Finance do, then we could see a serious increase in activity. This would make the entire platform more valuable.
Will Steemleo be a 100x token? Honestly, I believe it can be. Is it the only one in the world of cryptocurrency, or even on Steem? Not likely. There are going to be a lot of projects that follow a similar pattern as I described here.
This is the opportunity that is before all of us. It might take a few years for this to be realized by the foundation is in place. Those projects that are in cryptocurrency and leveraging the benefits that it offers could do very well for token holders over the long term.
Play with the numbers for each project and see how realistic the conclusions are. For many applications, you might find it unrealistic. There could be a few, however, that it all makes sense based upon what is being developed.
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