Fundamentals behind Swissborg

Hi, they say there are no stupid questions so I pull out a question that I have been thinking about. Maybe the answer is super easy. I wonder what do I get fundamentally when I invest in an altcoin that is also a company like for example Swissborg.

If I buy a stock I get a promise to part take in the future gains of that company maybe through dividends or if not hopefully the company reinvests in their business and grow their income which makes them worth more. That is what fundamentally drives the course of a stock right?

So what do I get as an owner of an altcoin? I mentioned Swissborg but it can be any. Do I become an owner of Swissborg? Do I get to take part in the future earnings of theirs??

Hey Julia.
I think, this is very good question and the answer might vary depending on which Cryptoasset/Token/coin you are looking at.
The Swissborg Token for example is a utility Token of the company swissborg. Important to know, if you hold this token you are not holding a portion of the company. That means, the token does not function as a share. But what else gives it the value than? To answer this question you have to dig deeper and find out what swissborg actually is providing. Swissborg is some kind of asset management provider, where you can buy and exchange cryptocurrencies. Therefore the team of Swissborg had developed a quite interesting “exchange network protocol” (I would call it, I think they call it the “Swissborg Engine”), where your exchanged funds are routet in the most cheapest way, which is possible at that time. So for example you want to sell 1 BTC for ETH, the swissborg engine will look for, how you can get the most ETH for it.
Of course, swissborg needs a business model. That’s why there are charging some fees for each exchange. Here they Token economics comes into play. Swissborg offers for each account, which holdes at least 50k of its Token CHSB the Premium Fees, which means that you don’t have to pay any fees or you have some discounts, depends on the Cryptocurrency you want to trade with.
At the end the prices is triggert by demand and supply which can be, more or less easily, regulated by the Swissborg Team itself. So for example, they can lower the entry level of the premium fees or they can provide more value for token holders etc.

This was just a rough overview about the Swissborg Token Economics how I understand this. Please let me know if I’m wrong on some point. But I hope, this helps to understand a little bit more about what makes the value/price of a token, in this case Swissborg.

1 Like

Well in that case its a bit fragile because Swissborg can change as you say in a whimps so that less Swissborg is needed to become a premium member and then the value of Swissborg token should decline right?

Technically I would say you are right, the price of the Swissborg token would decline WHEN

  1. the Demand decreasing (number of interested people)
  2. the Supply stays the same

But if I think more practically, I could imagine that a lower entry level would automatically lead to an increase of demand as more people can afford this entry level. So if Swissborg reduces the entry level, I would say they want to acquire more customers.
These are just my quick thoughts and probably are wrong, but this should encourage you to think through these kind of scenarios more deeply.
Basically I see it like that. Swissborg itself is not really interested in dumping their tokens price since they have their own bags of swissborg tokens.

I have rethought your idea of decreasing the entry level of premium membership. My thought about this is now following. If you are decreasing the amount of token which is needed to get access to a service which has the value of x. The value x in this case differs individually since each person invests individual amounts. While the value of the service stays the same, the amount of necessary tokens is decreasing, which again should lead to increase in token price. Am i wrong?.. probably. HAHA whatever economics is not my subject. We need a course for that.

1 Like

Hi, yeah i thought about it too. Maybe you are right. I think that if the entry level to premium member is too high, not many will buy it. Taking myself as an example it wouldn’t be wise to invest i don’t know, more than 2000 dollars i swissborg to get a premium membership because it is too big part of my portfolio so maybe i’ll skip buying. If they would lower the level maybe I would buy because it would be an ok percentage of my portfolio to keep in swiss.

Same for me^^ Currently, the premium membership “costs” even 4750€ worth of CHSB investment. I just hold a small bag of CHSB. I’m waiting for the announcement. XD

Could you follow the token swap few weeks ago? It was quite interesting because the CRO token got additional utility and the lock up “price” model was changed significantly twice in a short period of time.

Exampe Ruby Card:

  • 50 MCO Lockup ~225 € (before token swap (03.08.2020))
  • 5000 CRO Lockup ~ 800 € (right after token swap announcement)
  • 1000 CRO Lockup ~ 160 € (correction in AMA (04.08.2020))