The popularity of cryptocurrencies is undeniable. In roughly a decade and a half, the cryptocurrency market has grown into a $1.3 trillion phenomenon. Web3, as many now like to refer to it, is receiving billions of dollars from venture capitalists and institutional investors. The big players — Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH) — still dominate, but some of the most exciting and promising projects are just getting their start.
One newer project is Seasonal Tokens. The project says it aims to help traders more predictably profit because of its innovative mechanics. In a market that is marked by volatility, this may provide relief for many investors.
As with any investment, it is critical to understand just what you are investing in. What makes it different from other projects in the space? Take a look at some key aspects.
The Tokens Seasonal Tokens are made up of not one but four individual tokens — Summer (CRYPTO: SUMMER), Autumn (CRYPTO: AUTUMN), Winter (CRYPTO: WINTER) and Spring (CRYPTO: SPRING).
Algorithm Seasonal Tokens utilize proof-of-work (PoW) to generate new tokens, just like Bitcoin. This means that the distribution of tokens happens naturally — there is no token distribution arbitrarily set by the team. Miners must use computing power to create new tokens.
Value The tokens are designed to behave like seasonal commodities. Their values rise in a predictable manner, one after another. The team behind the project reports it has crafted a system where the relative supply and demand for each token are affected, hopefully allowing traders to make relatively consistent trades.
Mechanism How does this actually work? Every nine months the difficulty required to mine new tokens increases, effectively reducing the supply of a token and making it more valuable. This phenomenon has been seen across many PoW coins, most notably BTC.
At the same time, rewards for farming the tokens are adjusted, hopefully increasing demand. With these two mechanisms, the team behind the project believes that each token will be able to cyclicly rise and fall in value relative to one another.
Gambling Versus Investing? With these novel mechanics, the team behind Seasonal Tokens hopes to create a more fruitful experience for investors. In the world of crypto, some analysts say that traders too often are essentially gambling. Placing bets on future increases in value with very little reason to believe it will happen, save for blind faith. The mechanics of Seasonal Tokens might end up providing a more logical and predictable environment in which traders can profit.
If you are interested in learning more about the project, check out https://seasonaltokens.org/.
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