This morning (16-12 CET) Reddit confidentially submitted a draft registration to go public.
What got my attention is that on this sub, it seemed like it caused a lot bullish thoughts on community tokens like the one we’ve got. It made me wonder: “What is this assumption based off? Are there any arguments or examples that point towards this conclusion?” So I deeply thought about it, so you don’t have to: (TL;DR at the bottom)
Before we get into anything, let’s take a look at what a community token is.
Community tokens, at the heart of it, are created as a means to gain access to a community. They’re a type of cryptocurrency specifically designed to open the door to a particular digital group. You can think of them like membership cards, but based on the blockchain.
What the token can do, and what sort of access it offers, fully depends on the project behind it. Each social token represents a community and each community has a different value offer.
So for example Bricks on the Fortnite subreddit or ours.
Reddit going public:
With Reddit going public, a few things are going to happen:
It’s going to get a lot more focused on making profits (Think ads and sponsorships etc) It will have more funds to promote and grow its user base
This will result in a lot more active members of subreddits. Now Reddit has already pointed out that it will embrace other subreddits who want to make their own community token so more subreddits will get their own community token and at the same time grow their community with new people joining in as a result of the promoting done with the funds of the IPO.
With this the first contribution to the community tokens will be made: The Supply and demand basic model. By growing the number of users and only having a set number of tokens will increase the demand. This will result in a growth of the price of these tokens.
Further more, if more people start earning these community tokens, people who don’t use reddit but are into crypto will start looking into these coins as well.
Look at yourself for example; Most of you don’t actually make use of the DOT or ADA blockchain yourself, but because you believe in the project you invest in it anyway. This will be the same with the community coins.
Now here is the part where I start speculating so don’t quote me on this, but:
If there are going to be substantially more users that are going to engage with community coins, and non reddit users wanting to profit from these projects, it won’t stay unnoticed: Big exchanges will pick up on these trends and start looking how they can profit from this, with the answer being: Listing these coins on your exchange. Now if this happens, and I am saying IF, this will be very bullish for the reddit community tokens. It will enable everyone on earth with acces to the exchange to trade our community coins, and it will cause an astronomic rise demand with supply staying the same. This obviously is the most bullish case.
TL;DR / conclusion:
In the end it all comes down to supply and demand; going public will substantially increase the user base of reddit (because of all the promotion and branding that is gonna be done with the raised money by the IPO). This in turn will increase demand without raising supply, causing a rise in the value of the community tokens. This high demand and low supply will be picked up by big exchanges as an opportunity to profit from it. They will try to list these coins on their exchange. If the succeed to do so, this will be the most bullish case for the community coins, now being available to be easily traded by everyone.
Interested how you guys see this.