Introduction

Below, I will be reviewing a very interesting concept that people don’t usually notice when looking for a new ICO and a main reason why some fail upon exchange release, while others do exceptionally well with similar public reception and marketing. The concept are holder Incentives and Tokenomics, and these are surprisingly underused.

Basically, this is a system in which they reward ICO participants and market buyers to hold their coin, with the aim of reducing sell pressure.

To analyze and compare, I will look at one of this year’s most successful ICO’s: PundiX, as well as STORM’s holder incentive airdrop. While many things have gone down in the bear market, these were both able to go briefly parabolic. Then we will look at an upcoming ICO that has managed to perfect and mix all of these qualities into a very well packaged token incentive system: GameChain.

Factors in tokenomics

Both Storm and PundiX had several factors which made them successful on the market. The team, the product and more, all had a part to play, but in my opinion the holder incentives provided a key boost in a failing market. If market conditions were different, I believe both would have done enormously well for longer, and any project employing these tactics is bound to do well in the future when the bull returns.

A new style of bonus incentive

Instead of tempting people to participate with a standard bonus or token discounts, PundiX took a different approach and launched what they termed as a ‘3-year release program’, this meant that if you held tokens for a total of 36 months, you would receive all of your bonus for holding your tokens. Everyone from private sale (who only received a tiny 20% bonus) to public participants was treated the same with the bonus release terms. This levels the playing field and reduces the available supply initially, with new supply coming out only gradually, rather than in huge chunks.

Holder airdrops

What this release program works out at is that you receive a 7.3% bonus each month, for the first year after release (reducing each year that follows). So if you held 1000 NPXS, you would receive 73 for the first month. And then 7.3% of 1073 NPXS the next month, and so forth. Compounded over time this looked very attractive, and caused many to hold for longer than they would have held anything else.

Storm also had strong holder bonuses. Unsold tokens from the ICO are periodically airdropped to “virgin” wallets, meaning those who have bought in the ICO and not moved a single token from their wallets. As more people capitulate during the bear, the rewards become greater for those who held tokens. While this alone was not enough to save the token price from an extended and deep bear market, it still served to reduce market supply after this was announced in 2018. Storm was the 350% pump which actually preceded and signalled the mini alt season in April.

Buy Back Programs

Pundi also repeatedly did buybacks for relatively small amounts at target prices higher than market price. Although these would not be enough to move the market alone, the psychological effect contributed to the unusually good performance of NPXS in the bear market. The recent ICON buyback also shows that this may become a trend in future.

GameChain (GCC) Combination

The upcoming GameChain ICO combines these elements, having smoothed-out supply drops as well as attractive bonuses for ICO holders. The lack of sell pressure this will create when it hits the exchanges cannot be stressed enough. Even if they don’t sell out, as they are burning unsold tokens, which I think they will as it’s a tiny $9m hardcap — no one will be selling a single slice of the pie for quite some time and the price will reflect this immediately. Below is an overview of the tokenmetrics they have designed:

Website: https://gamechain.world

Telegram: https://t.me/gamechainworld

Twitter: https://twitter.com/GameChainWorld

Last Man Standing / Genesis Pot

All people who buy the ICO and do not move a single token will be eligible for holder bonuses in a similar manner to Storm, however these bonuses will come monthly over a 2 year period and represent 10% of the total supply. If anyone moves or sells tokens then the remaining bonus tokens are distributed between fewer people, meaning higher bonuses for those remaining.

ICO buyers can also earn a bonus multiplier on these tokens ranging from Level 1 (standard bonus) to Level 5 (50% more bonus tokens every month). Level ups are granted as a reward for helping the project (reviewing, promoting, forging partnerships etc.), making the holding incentive greater for those with a bigger stake in the project. This combination of factors alone would mean a big decrease in selling pressure.

GCC Holder Airdrop

GameChain also combines the above with PundiX’s style of distribution: Each month more supply is unlocked, and it goes straight to the wallets of holders, in the form of “holder rewards” which constitute a monthly percentage increase on wallet balance. ICO buy-in is not required for these airdrops.

No group of people is immune from this distribution method, meaning nobody gets their tokens early and is able to dump a large amount of supply onto the market.

What I would like to see moving forward

The only idea I can envision to make this whole thing fully come together, is if GCC incorporated a buy back scheme later down the line just as PundiX did. When PundiX publicly released a 1000 ETH buy back, the community reaction was amazing. They felt as if the project was concerned directly with the communities investments for the long run.

Recently, ICON have released information that they will also be doing a buy back programme — so this could be a standard approach for projects to come. It would be the icing on the cake for the whole tokenomics of GameChain.

Conclusion

It is my view that drip-feed distribution methods and “last man standing” holder incentives have a strong effect on reducing sell pressure of tokens on exchanges. As far as I know, this combination of supply drop and holder bonuses has not yet been done in the ICO world, and the GameChain team has learned from some successful projects in their distribution methods. Combine this with the altcoin market being 90–95% down and likely to turn around soon, we may just get to see how this method works during more bullish times.

Based on their Telegram channel the project is still in early stage, so I definitely would recommend to keep an eye on it to not miss any important changes or updates.

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Disclaimer: This review is for information purposes only, not financial advice. Kindly consult experts before parting with your funds.