I don’t have any evidence for this, but this is what I guess is happening at STORJ:
That new customer is a Hail Mary!
A: The STROJ token report form Q1 2024 is still missing. My guess is that they fear a price collapse when people realize that STORJ has no more coins left and now has to survive on real $.
B: Then there is the “no customer” problem. I moaned years ago that we need customer data from real clients, not some web3 shenanigans startup company that hosts a 300G file. Back then, people pointed at storjstats to show me customer growth. Despite the number being already to slowly growing, turns out there was no real growth only freebies.
C: I moaned that performance is not great
So now if you combine A, B, and C you may suspect something.
Why no token report?
Why all of a sudden that huge effort to tune performance?
Why is that customer so important?
I think because this is a live or die moment for STORJ. We are at the brink of the collapse. We SNO don’t understand how serious the situation is. That new customer is the first potential customer to actually pay real $ to STORJ! If they don’t get it, it could go dark very soon.
Happy to be proven wrong by STORJ going public and publish a 10-K
No, market making (providing tokens) doesn’t work like that. You need tokens to pay the SNOs. The SNOs have running costs, so will always sell their tokens at the lowest price they can. Storj (labs) will set buy orders below the current price. You don’t buy as prices are going up, which means that if price is dropping, someone is buying (since limit buy orders below the current price get hit). End result: storj bought the coins cheaper than what they paid out to SNOs.
Next month comes along. Clients (in theory) buy storj to pay for their usage. Since retail always buys as price is going up (hitting limit sell orders above the current price), the payout price has now increased. Storj pays fewer tokens to the SNOs (but still same per SNO $ value). SNOs dump their tokens (hitting storj’s limit buys below price) again, and the cycle repeats. It doesn’t matter if storj gets $1 or $1m/month. This cycle will repeat forever.
100%
Recent testing doubled throughput, so performance tuning is getting there.
You are missing my point. It is mood to discuss, since the token never behaved rational. It makes no rational sense, that a utility token just follows the BTC price. So my argument is, since it is an irrational token, psychological stuff like what I described does matter.
Not for paying SNO of course, but to convert it to real money and pay the hosting providers.
Paying SNOs always was single digitec percentage peanuts compared to other expenses.
Actually, you are missing my point. Market makers don’t work the way you think they do. As long as there is a storj/btc pair (which there are, on plenty of exchanges), price will “follow” the BTC price. BTC price goes up => you can buy more storj with BTC. BTC price goes down => You get more BTC with less storj. More of either = more $ for you. Remember makers sell when price goes up and buy when price drops. Retail buys when price goes up and sells when price goes down. In tradfi (ie forex) it’s called a carry trade.
For paying SNOs. Payouts are on the USD equivalent. The higher the price, the less tokens need to be paid out. Storj (labs) will not run out of tokens and go buy them on the open market, only to market sell them (=hitting buy orders) to $ to pay hosting providers. They will sell their bags (which they bought the previous month) to get $ to cover their expenses. Again: buying=price down, selling=price up. Price up = less tokens need to be sold. Price down = more tokens can be bought.
So you think that the exchange rate is only based on market makers?
You are right, I forgot that one. So it even is important for paying SNOs.
So we agree that exchange rate is important because they have to pay SNO (small %) and real hosters?
Well, these persons are what I think are what are gullible to psychological effects.
I think the token report could have a psychological effect.
Does that make it understandable?
Again, I don’t think we are even disagreeing on anything here, you are just misunderstanding me.
Let me try again:
Token is or was an ICO.
Basically free runaway venture capital money for STORJ.
That is why the price of the token matters.
If the price goes down, they have to hand out more tokens to SNO.
If the price goes down, they have to sell more tokens to get X amount of real $ which they then use to pay AWS.
If the price goes up, they have to hand out less tokens to SNO.
If the price goes up, they have to sell less tokens to get X amount of real $ which they then use to pay AWS.
That is why the price matters.
Price on the other hand, is in my opinion influenced by psychology.
And that is why STORJ the token report, because it could have a bad psychological effect on the price.
Payments to storage node operators are an important and growing part of running a network that is experiencing increased use, and these payments generally are made in STORJ token. However, a large majority of the expenses to run the network and build the company must be paid in fiat, including employee-related expenses. Building our cash reserves through the liquidation of token enables continued growth by having greater liquidity to operate the company and maintain the Storj network. The bulk of the entries in the category of “Other” have been the transfer of tokens to an experienced and vetted organization that in turn sells tokens on non-US markets and remits net proceeds to Storj’s treasury.
I think I’m starting to see how you are viewing it. We are on opposing sides of a trade, that’s why you think price going down = bad.
Storj came out with an ICO or however they got their initial funding. Price was at X. People bought into the hype (“this is the new bitcoin”, “to the moon” and all of that). Storj labs was the market maker here: Having sell orders above the current price. People (not the marker makers) were market buying (=hitting storj’s sell orders) all the way up to the high. Price is now at X*3. Storj was “cashing out” on these tokens.
Fast forward a couple of years. Price is now at X/2. Storj has their limit buy orders below the current price. If we assume that they sold at the “times 3” top, and price is now half of what the ICO was, that means they are buying 3*2 = 6 times as much tokens back for the same amount of $. That means they aren’t running out of capital (either $ or tokens).
The only way storj is on the losing side of the trade is if they bought higher than the payout price. I don’t see how that’s possible, as someone said “stock market (and by extension crypto) is about moving money from the impatient to the patient”. I don’t think they’ll rush out to buy tokens just to pay out the SNOs. They’ll wait for the SNOs to come selling back to them, in a “race to the bottom” (buying lower and lower) since SNOs have to sell their tokens as soon as they get them. Storj doesn’t have to sell its tokens right now. They can sell at any time they want (=at a higher price than the current price).
Not really. I am not involved in any of it currently, so I could not care less. But I gave you reasons why for the STORJ project a high exchange rate is positiv.
The rest of your text I fail to say how it is connected to any of what I have said.
This is exactly what I’m talking about: Storj labs is the market maker here (through an AP (authorized participant)).
If they get paid $2 from the client and hand out $1.5 to SNOs, that’s extra capital that’s freed up for company expenses. Less market making needed to be done. At some point, salaries/hosting expenses should be completely covered by clients. SNOs get a piece of the pie, that’s all (and that’s all they need to be honest).
SNO payouts are the less relevant thing. Salaries paid with tokens are 5 times the SNO payouts… and i guess many of the “other” tokens sold are salaries paid in FIAT.
In a decentralized storage network built with the SNO devices, does it make sense that the salaries are >5x the SNO payouts? is it sustainable?
I’ll simplify it: high storj token price = bad for storj if they need to buy it back to pay the SNOs. Low storj token (lower than the all-time-high) = good for storj. They buy back more tokens to pay the SNOs back.
Between buying and payouts, of course price will move. If you bought lower and paid out higher, you’ve paid less tokens. SNOs don’t care what the price is, they should sell their tokens as soon as they get them. If on the other hand price moves lower between you buying and paying out, that means you need more tokens (=eating into your reserves) to pay out to the SNOs.
Allow me to correct you: Any asset’s price is the last sold price.
Limit buy order => someone needs to hit that by selling.
Limit sell order => someone needs to be there selling, while another comes and says “I’ll buy it”.
