I’m having trouble to understand how the real world demand for STORJ tokens would affect the STORJ price. For that let’s assume the following conditions:
Storj pays 1 Million dollars to node operators per month (creating real world demand for the tokens)
Storj constantly grows 20% per year (paying 1.2 million the next year etc)
We do not live in a crazy crypto world and the price is only determined by the real world demand for the tokens.
100 million tokens are in long term lockup
325 million tokens are on the market
Can someone explain to me how this would translate into a “correct” STORJ token price and what it would be in this scenario?
I understand that it is a utility token but it still has a dollar value attached to it and the value is not fixed. It makes a difference if storj pays 1 million or 10 million dollars worth of Storj tokens every month to node operators and I just want to understand the dynamics how it would theoretically translate into its price.
There is no way to know the answer to that. The price is not only determined by STORJ demand, but also the highs and lows of the crypto market as a whole. Further as the value of the token rises, STORJ has to pay less tokens out since the payouts are fixed to USD value. And if the value of the token falls, STORJ has to pay more tokens out.
How and when Storj Labs purchases tokens from the market is also a factor. They could buy them all at once, or in pieces, or on demand.
And in all of those cases, how the market reacts to that and what kind of third party purchasing goes on is anyone’s guess. It is all built on speculation.
That is why I wanted to remove the speculative part of being in a crypto space, let’s make a different approach, maybe this is more of a general economics question rather than a storj question but anyway:
let’s just say that there is a fixed supply of one ton of salt in total worldwide. You can do work for a company and get paid in salt based on the current salt price that can be traded against dollars at the salt market. There is no other use for the salt except for people working for it to trade it back against dollars. Employers need to buy the salt at the market to be able to pay the employees. Every month 1 million dollars worth of salt are paid to the workers and let’s assume you know for sure that 1.2 million will be paid next year etc. What would a gram of salt cost?
What you want to know is if the value of the token in USD will rise or fall. No idea. Your economics question is irrelevant, as that can’t be used in relation to how the value of the token is determined.
In short, supply and demand. If there is supply and no demand, the price falls. If there is demand and less supply, the price rises. If someone is buying 1 million dollars in salt, and there are 50 million in salt available, will that impact the price of salt? Yes, because supply has gone down to 49 million and demand has risen by 1 million.
The bigger question is how much of that 1 million in salt ends up circulating back to the exchanges? It won’t be 1 million, it will be less. So, after some time, supply gets thinner and salt gets more expensive.
Ok, back to dollars. Do I understand correctly that it does not matter at all? If storj price will rise to 1 million, and the company has to pay one million dollars to SNOs, they will take that million dollars, buy 1 token and send it to operators, right?
Now it does matter, because storj has operational reserves in tokens, so more value the token has, longer the reserves will last, right?