Yesterday the Steemit team released a new update. This time regarding SMT's here.
What they are doing is building a framework for SMT's and filling it with all kinds of goodies you will be able to use when launching your own token on the STEEM blockchain.
One of these goodies is the Automated market maker (AMM).
I haven't double checked this but my way of understanding the AMM is that it's optional to make a token instantly tradable vs STEEM after launching it. (I'm assuming on an internal exchange on the STEEM blockchain.)
This is cool because no other blockchain can do this.
On the Ethereum blockchain, for instance, you first need to do an ICO, get ETH send to you then sent back the ICO tokens.
Then at some point, these tokens need to be added to an external exchange (Binance, Bittrex) before they can be traded and the price becomes clear.
A lot of hassle for an entrepreneur.
With an SMT it will be so much easier, plus everything stays in the same Ecosystem (Steem blockchain).
Now why anyone would pay STEEM for a newly launched SMT is a cool question. Whatever the entrepreneur is offering needs to be solid and worth investing in.
I can't wait to see what entrepreneurs come up with.
Now again, as a disclaimer, I'm not 100% sure if what I wrote is accurate. I had to detangle this (from the update post) and it's not always easy.
As an example, one piece of meat that we are working on is the automated market maker (AMM). AMMs will enable an entrepreneur launching an SMT to create instant liquidity for their token so that people can immediately begin buying and selling it while also establishing a baseline price level for that token. Leveraging the AMM is an optional feature for an SMT, but those SMTs that do use the AMM will be able to economically bootstrap themselves with a turn-key solution for providing bi-directional liquidity in the on-chain market.
When I learn new things or when I have a mistake I'll let you know.
I talk about it more in my vlog.
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