Intro – What pricing models make sense?
BET Token holders can stake their BET to receive profit from the EarnBet Casino’s BTC and ETH bets. In addition to rewarding holders with a share of EarnBet’s profit, the BET token also benefits from a buyback and burn with all profits from EarnBet’s altcoin volume.
As with many tokens, there is no one price model that makes sense for BET, and it is more productive to sum up many different price factors to generate a sense of a potential token valuation.
So, let’s look at a few token price factors:
- Dividend price factor
- Buyback price factor
- Staking growth price factor
- Potential for growth
All of these factors, added up together, give an idea of a potential BET token valuation. Note – there are other less-obvious price factors that were not addressed for the purpose of keeping this simple.
But before getting to any analysis, let’s line up the numbers and stats!
Some Numbers to Work With
Current Price: $0.059
- Total Supply: 88,000,000
- Staked: 61,452,921
- Burned: 1,499,898
- Unstaked: 13,231,813
- Uncirculating: 11,815,368
Notable here is the relatively low supply of unstaked tokens (tokens that can potentially be sold on exchanges).
Time of Stake & Stake Points
EarnBet distributes higher dividends for longer staking periods, and currently does not offer a way to unstake before the staking period is over. Over 85% of tokens have been staked for 5 years, meaning the majority of tokens (and Total Supply!) is locked up for the long-term.
EarnBet calculates its dividend payouts based on Stake Points, which is calculated as (tokens staked)*(stake period multiplier).
EarnBet received significant volume when it launched one of the first EOS dapps. Since then, volume (and thus dividends) have been lower, but the last few months have been strong. Combining the strong dividend performance for the last few months with big updates coming in early 2021, we will use (for the sake of our calculations) the average monthly dividend amount from the past few months, which is around thirty thousand dollars per month.
Dividends per month: $30,000
Dividend Price Factor
We can calculate dividends over a period of time t = 1 month per token for each stake period.
Solving dividends per token per month for a 5 year staking period would give us:
So, assuming constant dividends from above, staking one token over a five year period would pay out:
(12 months)(5 years)($0.00054)=$0.0324
However, dividends are paid out to stakers monthly, meaning that reinvesting staking rewards would lead to an even higher return. Without going into detail on dividend reinvestment, the total dividends paid out with reinvesting and based on the current $0.07 token price and a 5 year stake period would be:
Buyback Price Factor
The BET token benefits from a supply distribution heavily weighted towards stakers, leaving a small percentage of the total supply available to trade on the market.
Only 13.2 million tokens are liquid (unstaked and circulating), equating to only 15.0% of the total supply.
With 2.8 million ‘locked’ up in Uniswap (likely a large portion by the EarnBet team), the percent of tokens potentially available for sale is closer to 11.8%, or a ‘liquid market cap’ of around $613,600.
With heavy EOS betting on EOSbet.io, and many other favored altcoins, the buyback pool is likely (and very roughly) equal to or greater than monthly dividends in magnitude. Assuming even anywhere near monthly dividends, this would mean $30,000 of buy pressure EVERY MONTH on $613,600 of liquid tokens.
Note: this data is all on-chain but I did not take the time to run through any of the exact totals
Just put $30,000 (one month’s worth of buybacks) into Uniswap and BET’s price appreciates by 14.38%!
The EarnBet team recently announced that they have already bought back 1,577,517 BET for ~$103,000, almost 2% of the total BET supply or 12% of the unstaked supply. This was conducted with dividends collected over roughly a three-month period (~$35,000/month).
Can tokens be unstaked fast enough to keep up with the demand from the buyback?
Unlikely. 85.3% of tokens are staked for 5 years and it will be years before they can unstake.
We can expect the liquid supply to keep dropping.
Staking Growth Price Factor
The number of BET stakers on EarnBet.io/BET continues to rise dramatically!
Another million tokens were staked over the last month, further reducing the liquid supply of BET.
With the current BET price, buybacks and number of tokens being staked, the liquid supply of BET would be completely drained in around 6 months!
This rate is unsustainable, and only a dramatic increase in price will offset the number of BET being staked for long-term periods.
Potential for Growth
So far, we have only covered price factors affected by current operations.
What isn’t factored into the above price components is the potential for growth.
A few potential areas of growth are outlined below:
EarnBet.io Initiatives Coming Soon
The EarnBet team has been alluding to big partnerships and a big update for the BET token. This has been underway for quite some time (6 months at least). Though the details are still unknown, I believe it is safe to say that there is potential for growth in platform usage, ultimately translating into greater dividends ( through increased staking) and bigger buybacks.
Growth in Online Betting & EarnBet.io Platform Growth
The iGaming industry is growing rapidly, and blockchain has unique advantages. EarnBet’s platform is one of relatively few iGaming platforms that actually executes wagers on the blockchain. Many analysts expect this market to continue to outperform and many industry estimates suggest the iGaming industry will grow by 70% in 2021 alone.
Influx of New Crypto Investors
With money pouring into crypto, investors are getting smarter about portfolio management. One aspect of the BET token that I love is that it is relatively uncorrelated to movements of other tokens. In addition, if the EarnBet team can focus more of their messaging on investors, I think there is a huge potential to reach a wide audience outside of just players.
Based on dividends alone, BET is underpriced. When adding in all of the other major price factors, it is clear that the BET token should be multiples higher. With a rapidly decreasing liquid supply, BET’s current price is unsustainable.
Sources and Resources
Disclaimer: All investment strategies and investments in cryptocurrencies involve risk of loss. Nothing contained in this article should be construed as investment advice. Any reference to an investment’s past or potential performance is not, and should not be construed as, a recommendation or as a guarantee of any specific outcome or profit. Readers must do their own research.
Looking to advertise? We will gladly help spread the word about your project, company, or service. CryptoMode produces high quality content for cryptocurrency companies. We have provided brand exposure for dozens of companies to date, and you can be one of them. All of our clients appreciate our value/pricing ratio. Contact us if you have any questions: [email protected]