Every so-called Token Economy is just a financial game before it falls.
It has been more than a month since the first Dutch auction in Algorand, and the second round of Dutch auctions is still in the foreseeable…
In recent days, Algorand has frequently released good news, which seems to be warming up for the second round of Dutch auctions:
- The auction was suspended. How did Algorand’s 200 million mortgage reward scheme be launched?
- Algorand announced an early repurchase, Algo rose 45% in a short time
- Video|"8" Turing Award winner, AIgorand founder Silvio: Solving new problems is more important than solving historical problems
- The quilt cover for 40 days, the Algorand photographed by investors can finally be solved in advance.
Tether will issue a stable currency USDT on the Algorand network; Algorand will become a member of the International Swap Swap and Derivatives Association (ISDA); in cooperation with Singapore Insurance Company (Singapore Assurance), an audit of the reserve refund reserve has been completed… …even Algorand CEO Steve Kokinos also came out to do live broadcasts of the community to answer user questions.
The Odaily Planet Daily learned that Algorand even tried to extend the investor lock-up time and is redesigning the auction mechanism.
Algorand is trying to save investors' confidence through various benefits, but investors don't seem to buy it. Algorand's official WeChat community is asking people almost every day, "When is Algo going to zero?" Some investors directly call Algo "zero coins."
Algorand announced that the Dutch auction, a lot of private equity investors optimistic; to auction the private price of 48 times the transaction, it is astounding; after the arrival of the currency in the secondary market plunged, the majority of retail investors spit to cut the leeks.
In just one week, the public chain project, founded by Turing Prize winner, the joint proponent of zero-knowledge proof, and MIT professor Silvio Micali, experienced a roller coaster-style change: the former academy-represented project was caught The controversy is now accused by some outside voices as “funding” and “cutting the leek”.
Due to the huge momentum and the rare auction mechanism, the gameplay is unique. Before Algorand was on the coin, it was squandered as a “high-end fund disk” and “super large international resonance disk”.
HOLD Community User Reviews
The plunge after the coin is more like a satirical note, which makes the Algorand project more controversial. The disadvantages of the previous team's unlocked positions and Dutch auctions were once again pushed to the forefront.
However, there are still many people who are optimistic about Algorand. After all, the Algorand main online line is less than 2 months old. This is too short to judge the value of a technology project.
The Netherlands auctioned high prices,
Secondary market prices fell by 75%
At 6 pm on June 19, the first Algo token Dutch auction was started by Algorand. The final transaction price of 25 million Algo tokens was $2.4, and the private placement price was 48 times that of $0.05.
This means that the project side has completed $60 million in financing, and prior to this, Algorand has completed a $66 million financing scale.
At a high valuation, Algo plunged after the upper secondary market.
According to the data of Firecoin Global, at 10 am on June 21, Algo launched the fire currency, which rose rapidly from the opening price of 2.37 US dollars to the highest 3.3 US dollars, an increase of 39.2%.
The next morning, Algo prices began to go down. As of July 29, Algo's lowest price was $0.58, which was about 75% lower than the highest point.
Seeing the cliff-like decline in the price of coins, retail investors in the secondary market have been unable to hold back. Due to the high heat in the early stage of the project, many retail investors who failed to participate in the Dutch auction bought at the high level in the secondary market. Go in.
The shackles and accusations of "Turinging winners cut the leeks" and "advanced funds" began to flood the market, and the mood of retail investors was venting.
Cut the meat off the field or die to wait for the second Dutch shoot?
The Odaily Planet Daily interviewed more than a dozen investors who were stuck in the secondary market and found that the high probability of these investors' mentality can be divided into two types. One is a pessimist who directly cuts off the flesh and does not touch Algo again. Another kind of pessimistic activist, in constant disappointment, prayed that Algo would have a wave of price increases before the second Dutch auction.
"I entered the market with 3 dollars, and now I have lost my underwear. Now I just kill it directly, and I don't see my eyes." He Hai told Odaily Planet Daily that there is no hope for Algorand's second round of Dutch auction. It is.
"I bought Algon for 3 dollars and bought 10,000 dollars. I still hold it now. There are a lot of private placements and no community. I can't afford such a big market value." He said that he already has Algo. Abandoning treatment, I don’t expect this coin to rise any more. “The selling is too big, unless the private placement unlocks the project and the money is repurchased, and then continue to do things.” Then he said, “But you feel the money into your pocket. Will it come out?"
A little bit optimistic about the Algorand project side, although the Algorand technology is very powerful, and the Turing Award winners endorsed, but he thinks that the technically good projects are more, "Algorand is really down-to-earth technology, it will not be so high. Open the public offering price (Algorand Dutch auction price 10 US dollars starting, private placement price 0.05 US dollars). At the end of the day, he said that he has now started shorting Algo on gate.io.
"The price of the currency does not rise. The pure discussion technology is a rogue. If it is a technology school, don't send money. Anan will do your technology. The currency will be kidnapped by the secondary market investors. Finally, the rights protection will be inevitable. "The quilt of Quando also said indignantly.
“I bought $110,000 for Algo for $1.50, and I was out of the game when I was at $0.90.” Leo said that he will never touch Algo again. Leo said that the reason why he learned about this project was because the money was endorsed by Algo. "No good money, free currency. I always thought that the money can be safely reviewed. The result… .. "Because of Algo's plunging, Leo's good impression of the currency is gone.
In addition, Miss Liu has a deep resentment against Algorand. In her eyes, Algorand is the "Turing Prize winner in conjunction with Tsinghua Chen Chen fraudulently cutting leeks", and Miss Liu bought 200,000 RMB Algo on the fire coin for 2.8 USD. Now that she has lost 150,000, when she asked if she had cut off the meat, Miss Liu told us, "By the end, don't cut the meat, wait for zero." It seems that her resentment against Algo has made her careless. Personally lost, she now hopes that Algo will return to zero, and does not expect the project party to pull the plate before the second auction.
"I just expect to be able to rise a little before the second round of auctions." Shen Meng is a newcomer to the beginning of the coin, "I was fooled into this fiery Dutch auction," because of curiosity Algorand The Dutch auctioned the way of selling tokens and took over Algo in the secondary market. Shen Meng said that she had invested 1,500 yuan and now has no more than 300.
"This project has set up half of our company. I bought it when I trusted my colleague. He was 2.6 (US$). I followed him at 2.4 and is now waiting for the second round of auction. I can get a pull, and I am satisfied with the $1." Hank prayed for the second Dutch shoot to come, and didn't want to miss any chance to get rid of it.
Interestingly, the Odaily Planet Daily also chatted with a capital partner who was particularly optimistic about Algorand technology. He found that he had vowed to hold Algo for a long time and he has now left the market. "In the long run, I think Algo should It's okay, but I think it's time to replace Algo with a big pie (BTC)."
Private placements are fierce and super team expectations,
The team hopes to extend the lock
Long-term observation of Algorand's self-media SorosReport, recently wrote an article: "Some people bought a sea view room in Greece through Algorand, and some people almost went bankrupt because of the pick Algorand . "
Before the official start of the Dutch auction, the team and the foundation had been criticized by the outside world for not locking the position.
As it turns out, what you have to worry about is private equity.
At present, the reason why Algo has a cliff-like decline in the secondary market price is that the general view in the market is that the private equity institutions are linearly unlocked and then caused by the sell-off.
At noon on June 26, an email sent by the Algorand Foundation to the investor community seemed to confirm the market's speculation. Chen Fangfang, head of operations at Algorand Foundation, said in a letter to the investor community that the Algorand Foundation has found that some recent actions by early supporters have injected unnecessary risks into the project, and dumping, short selling and other similar actions may destroy The performance of the network and the trust of the project, and remind investors of the obligation not to take any action that is harmful to the project.
According to public information, Algorand had two rounds of financing before the official launch of the Dutch auction. The first round was the USV and Pillar angel round, raising $4 million; the second round was the node round (private round), with a total of 62 million. US dollars, each Algo is 0.05 dollars.
According to the rules, private investors' coins are released 1.7 million (1/730) per day. One month's release is equivalent to one round of Dutch rounds in a month (50 million Algo).
Comprehensive multi-party interviews, before the Dutch film, the team had two thoughts: I did not expect the price of the Dutch auction to be so high, I did not expect so many private investors to sell.
“The investment threshold for private equity rounds is still quite high. Some rich capital can also be invested in more than one. It can be said that investors who can participate in private rounds are not short of money. The Algorand team is based on this consideration. It is believed that these private investors should not be eager to sell in the secondary market, ” Yawn Rong said.
“Secondly, investors must lock in the positions required by US laws and regulations, which will filter out some people who want to cash in, so the team did not predict the pressure of private placements at the beginning .” Yawn Rong Continue to explain.
Several interviewed investors said that based on previous knowledge of the project, they originally estimated the final auction price at around $0.8-1.2.
However, private equity investors “lifted the sedan chair” when they participated in the Dutch auction. Australian node Yawn learned that when the first round of Dutch auctions began, most private investors were hanging $10, and the value of private investors was nearly $15 million, accounting for a quarter of the total auction value. The final auction price is as high as $2.40.
"But this is understandable. After all, 48 times of investment income opportunities are impossible to meet." Yawn is embarrassed. No one expected that the price of the first round of Dutch auctions would be so high. Excessively high bubbles have also raised retail investors' expectations for the project.
Today, although the price of Algo has fallen back a lot, it is still 10 times compared to the private placement price. In the market's sentiment against Algo from anti-yellow to disappointment, users believe that private equity is still continuing to sell, and users themselves have cut their flesh and vicious circle.
Last Friday (July 26), from the media "block Ark" through the tracking chain address, the official node fixed output of more than 3 million coins a day, has been sent to the exchange to sell, and put forward two points Question: It is not true that only half of the official nodes are unlocked; and then the so-called official warning nodes are not allowed to act to harm the community.
Creation Capital Partner Li Rongbin believes that private investors should not be blamed. Algorand's non-locking and private placement linear unlocking is also understandable. “Private investors do not have the right to withdraw coins. For private investors, it is a reasonable thing to ship in the secondary market as long as they are above the private placement price.”
An Algorand investor said with the Odaily Planet Daily, including Algorand. He said that the unlocked coins were thrown away. “The blockchain projects are all funds.”
The cryptocurrency is still in its early stages and there is no recognized valuation model. Even the reliable Ethereum is now very weak, and it is safer for investors to get the benefits first.
The Odaily Planet Daily learned from many parties that Algorand had communicated with investors and hoped to extend the lock time and slow down the unlocking speed. Private investors are certainly not willing, and the two sides cannot reach a consensus.
Mechanism of failure, infinite hedging repurchase mechanism
“The currency circle was previously a private placement of the project. This time, the project and the private placement will cut the retail household.” An industry insider joked.
In fact, it is not entirely unreasonable to ridicule Algo for such a plunge.
According to the repurchase policy, the Dutch auction investors can sell at the secondary market price and then buy it at a low price. After that, whether it is up or down, there will be a 90% repurchase guarantee after one year. For private equity investors, they already hold a lot of Algo, which costs only a few cents, and can enjoy the benefits of the node.
Analyst Li Enmeng believes that 90% of the repurchase mechanism in the year has a “Bug”, which will allow investors participating in the Dutch auction to hedge their short hedges. "If I participate in the Dutch auction, I will definitely go to short-selling. As long as I sell Algo on the trading platform, I will not lose money after the price of Algo is up or down. It is good if it rises. If the price of the currency falls. The income I get short can directly offset this loss."
Dovey Wan commented that the most powerful part of Algorand was to design the repo mechanism as a put option, and the high probability would not be enforced, and there would be no selling pressure on the open market.
“As long as the price drops by 10%, no one sells it, and it falls more than 10%. Those who participate in the auction will buy it because they can arbitrage at a higher price. Therefore, through the design of a price mechanism, the participation transaction is successfully guided. The expectations of both parties are really very clever game design, and for the first time, it can be called cryptoeconomic."
"The first round of hedging will continue to go to the hedging in the second round. If I say that I earned 50 times in the first round, I will continue to participate in the second round with 50 times of this money, lock me. This is 50 times 90% of the gain; then go to the second round and continue in the third round. This is an infinite set of insurance.” Yawn Rong said, don't worry about no one in the Netherlands, especially private investment. By.
However, the fact does not seem to work like the two scenarios above. In the case of Algo's continued plunge, users may only want to run off as quickly as possible at the high point, and it will be more cost-effective to wait until the price falls below the bottom. What's more, the team has not opened the second round of auctions. The coins in the first round of auctions are far less than the number of unlocked ones.
Block Ark also attributed the resurgence of Algorand's collapse in the secondary market:
"1, the opening valuation is too high, the official price of 1USD or more only 90% repurchase right, is the default 1USD price reserve price, corresponding to 10 billion tokens is 10 billion market value.
2. The price difference between the node cost and the auction/spot is too large. The comparison of the auction price of the first period is 48 times, and the node selling pressure cannot rely on the moral self-discipline of the node.
3, the so-called node, in fact, is a two-year private equity released every day, pure financial investors. Unlike EOS's super nodes, which need to lock tokens, it is a role that reduces circulation and needs to contribute to the ecology.
4. Before the auction put option forms a trading game trend, let the node's currency come out to compete with the project side. ”
The article concludes: "In the final analysis, the pricing is unreasonable and self-righteous. The clever mechanism design can not meet the avalanche of human nature. "
Some platforms have already opened Algo's contract transactions. For example, BitMax has opened Algo 5 times leveraged trading on June 21. In addition, Algo's current put option has also been traded on the market: TAlgo is the put option, and the current Tiger Wallet can be traded.
However, these analyses that have been directed at the Algo mechanism may fail. The Odaily Planet Daily learned that Algorand has not started the second round of auctions, except because the market environment is not good, and some of the teams are considering improving the mechanism.
Is Algo worth buying?
So the question is coming, can Algorand still buy it?
Algorand has been auctioning in the Netherlands for 5 years and currently only has one round of auctions. Li Rongbin believes that it is unwise for many people in the market to use the market performance after the first round of auctions to estimate the future direction of Algo.
Li Rongbin believes that Algorand is not just trying to be a public chain, or issuing a coin to complete it. In the future, Algorand hopes that the large assets in the traditional financial field can be issued in the Dutch auction on Algorand.
Li Rongbin said that if Algo's Dutch shoot is successful, according to Professor Micali's plan, the future Dutch auction will be fully chained Algorand, any of the financial assets that can be chained can use Algorand for distributed Dutch shooting, and Algorand fully guarantees its safety. Sex and transparency. This also explains why Algorand is working with numerous traditional banks and financial institutions.
Many investors also complained to Algorand during the interview. Wu Hao, head of Xinyi Capital, said that Micali and Chen Hao are really involved in Algorand compared to the academic big cows and XX winners who can buy the platform when they spend money, and they have been holding China many times. Directly face the community.
Even though there are a large number of articles analyzing the gameplay and repo designs of Algorand Holland, the ultimate value of the project depends on the large-scale application of Algorand in the future.
Only this implementation, Algorand is not only a financial game, but also a strong response to the "Turing Award-level funding disk" question.
In the text, Shen Meng, He Hai, Dot, Quando, Leo, Miss Liu, Hank and Li Enmeng are pseudonyms.
"Make money, it's really related to IQ – Turing Award-level funding Algorand", partner of Primitive Ventures Dovey Wan;
"Those Years Algo Church Ours", mate;
"Algorand behind the public: some went to the Greek Aegean to buy a sea view room, someone received a bankruptcy", the old man.
Text | Wang Ye
Produced | Odaily Planet Daily (ID: o-daily)
Original article; unauthorized reprinting is strictly prohibited, and violation of the law will be investigated.