Pre-mined Token Platforms Performing Poorly while “Fair Launched” Ones Succeed

by Bitcoinarama BOT
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Fair launched cryptocurrencies are performing much better in the long-term according to latest research from markets analyst website Messari. According to the website, these are the tokens with no initial pre-mined circulation to benefit co-founders and other secret stakeholders.

The Fairness Debate is Renewed

Many cryptocurrency projects launched right now involve some form of pre-mine. This means that the project launches with an initial coin supply. So, even if the overall supply in limited, the system is rigged for those who co-found the project as they get a substantial amount of crypto as a rewards scheme upfront at the launch. Now the same model is also followed by many successful companies around the world. Co-founders and initial investors always get the early-bird benefit but that is a difference between stocks and cryptocurrencies. Pre-mined stocks make sense, but pre-mined digital currencies rarely make any sense. These include Ripple XRP, Polkadot, Cardano and various other cryptocurrencies. Some like XRP are entirely pre-mined and no new supply of tokens will hit the market, ever.

Fair launched tokens are different as they start with no pre-mined tokens and the ownership of new batches of tokens depend on the amount of work miners are willing to put into it.  As the name suggests, their launch is fair and thus not rigged for the benefit of the early adapters. Yes, when Bitcoin started, the first 1 million Bitcoin were mined by Satoshi Nakamoto but he actually mined them from the genesis block onwards and afterwards stop doing that. These coins have also never hit the market and are considered “lost” by most users. Same thing happened with other fair launched tokens like Litecoin, Dogecoin, Monero and others.

Which one Fairs Better?

According to statistics from Messari, fair-launched tokens fare much better overall than the market average. The average is around 1.90%, 43.82%, and 248.45% for the last seven, 30, and 90 days for these mostly Ethereum-launched tokens. But, fair-launched tokens fared 9.56%, 145.33% and 296.46%. Overall, the performance of fair-launched tokens is much, much better than the others.

 

This shows that the market appreciates fairness at the start of cryptocurrency projects is extremely important. It is also an eye-opener for many new inspiring coin projects that often allocate a lot for the co-founders and early bird adapters in a pre-mine situation. Many believe it is justified but as the stats show, apart from the odd success like Ethereum, most of the pre-mined projects fail to do as good as fair-launched ones.

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Original post appeared on CryptoUnit.com - Pre-mined Token Platforms Performing Poorly while “Fair Launched” Ones Succeed

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