How do I justify the value of ADA and the net worth of investors?

English General Discussions
22

The “point of no return” is when an asset becomes “toxic”, ie an asset that can no longer be sold because it is widely perceived as being a guaranteed way to lose money.

Today’s price always influences tomorrow’s price, that is why it is important to keep an active watch on it and take measures to keep the price within a “healthy range” whenever possible.

As I see it, every current project has an accurate price, as those prices are based on the current supply and demand for each token.

A different matter is if they are undervalued or overvalued, according to the price perception of that particular token, or even if they are useful projects or not.

I agree with you that in the long term many of those projects will simply fade away. But we don t really live in the long term, we live in the here and now, and in that time frame ADA has certainly not been at its best, price wise.

To me, this shouts MARKETING, but of course it is a heresy to try and improve ADA’s global perception and give investors some peace of mind…

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And how is Cardano any different than every other altcoin? Because some are down 92% from their ATH and others are down 95% from theirs, somehow from this we can decipher which projects have actual merit behind them?

Today’s price has nothing to do with tomorrow’s price. This is why things don’t go up forever or down forever. You can preach TA buzzwords all day long, but in the end, having a useful project is all that matters.

The crypto market is heavily manipulated in both directions. Liquid supply of any given crypto asset on the market is anyone’s guess. When you look at CoinMarketCap, you are not looking at a free market. Not for a second do I believe that these prices are driven solely by supply and demand. Sure, it those forces play a factor in the long term, but definitely not in the short term.

And be like every other project shouting promises and meaningless metrics that will be available in the future? Marketing is great to bring in speculative buyers, but this space is about building an ecosystem that lasts. Let’s wait a bit, create some real world use cases, and then market it as a platform to build solutions for real people. I don’t think fretting over the short term price movements is worth it right now.

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24

Cardano is in a whole different league than all the other altcoins, Its price should be a reflection of that fact.

When you buy today, you expect tomorrow’s price to be higher. Nobody invests into an asset with the goal of losing money. Since you expect tomorrow’a price to be higher than today’s price, you are already factoring today’s price into your buying decision, so yes today’s price has a BIG influence in tomorrow’s price.

I will give you this one: I actually recently read an investigative report (can not remember where) stating that only a few exchanges offered a transparent and real price action: There was Binance, Kraken and a third one that I can not recall among the “real price” ones. But even with those, nothing prevents pump and dump schemes and a single player manipulating prices by engaging in both bid and ask positions.

Why does it have to be shouting promises and meaningless metrics? If the product is good and the progress reliable, those should be very reliable promises. Besides, a good marketing initiative could be as simple as creating a new website, something along the lines of “Cardano news”, and present all the latest news to the world. We, the Cardano community, are aware of the latest developments, but besides us, I would be very surprised if anyone else knew much about it and Cardano has actually been very active: The problem is that the world has no idea about it.

So, yes, I would go for some serious marketing right now in order to prepare for the future. After all if Cardano becomes great in the future (as we all expect it to be) there will be no real need for marketing then. Does Bitcoin need any marketing? Right now, though, Cardano certainly would benefit from a marketing helping hand.

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Market what? Cardano is currently a centralized token with no functionality. When Shelley and Goguen go live, there will be something to promote… as for right now the guts are all still being stitched together on github and the Field of Dreams promises in the mouth of Charles Hoskinson.

When the platform is actually functional I’d prefer to see resources spent creating top tier developer tools and outreach programs to the most talented devs and teams interested in the dApps space. What most people don’t seem to always appreciate is that Cardano’s success is very dependent upon the applications running exclusively on the platform.

A top tier dApp may require 50,000 man hours of development work spread over the course of a year and 25 devs. If Cardano is able to attract dApp teams with these kind of resources, then these projects will become the inadvertent marketing arm of Cardano as they will promote whatever they create which will, in turn, drive platform usage and thus price appreciation. Marketing to speculators ala TRON makes no sense in the long run…

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26

I am one of those persons and had no idea. Actually I thought the use case of Cardano was much broader.

Again, I had no idea that an app development was so hourly intensive. Thank you for explaining it to me. Now the “dapp way” makes a lot more sense to me, and so does to wait at least for Shelley in order to finally trigger the M word (Marketing).

Thank you for your input, it is actually very valuable to me as I do not have a technical background. Your answer makes a lot of sense.

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No worries, I’ll be there with a bucket collecting all of it, wishing everyone a nice day as they exit the ecosystem :wink:

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dAPP development is already going on for last two years, on multiple platforms:

https://www.stateofthedapps.com/rankings

So if dapp is Cardano’s M for marketing, one may need to be very innovative, else it is going to be another Me-too situation.

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There are no dApps with real usage (i.e 10 million+ daily active users). Many of the dApps that do exist operate in a quasi-decentralized state offloading some of the backend data to centralized off-chain servers. No dApp platform (ETH, Cardano, Algorand, etc) has yet provided a robust ecosystem with the appropriate tools for fullstack end-to-end decentralized development. What Cardano will need are serious dApps solving real problems - they’ll attract serious 3rd party projects by creating the best framework and tools.

In my view it’ll be at least 2 years before we potentially see a ‘killer dApp’ - i.e. undeniably useful, logarithmic user adoptions curve, not repeatable with non-decentralized technology alternatives.

How many dApps do you use on a daily basis and feel you couldn’t do without? Can I guess zero? It’s all very early still…

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I agree, but one does not need to wait for full decentralization to start offering real life solutions with dapps, one can start developing something useful now and if in far future full decentralization kicks in - even better.

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Totally agreed, Atcalypso.
When I said that it makes sense to wait for Shelley before engaging in a major marketing campaign, it doesn’t mean that nothing can be done right now in preparation for Shelley, marketing wise. This would certainly ease the way and speed things up a bit, after all, the years are piling up quite seriously here…A ton of years ahead of us and a crumbling price is not a great mix…

32

Valuing a base layer protocol involves a number of considerations, in my opinion.

  • Security
  • Trust Minimization
  • Access and Permission
  • Immutability
  • Decentralization of nodes
  • Nethash or Net Stake
  • Distribution of Hash/Stake
  • Network Usage
  • 3rd Party Developer Interest and Activity

Public sentiment forms around these facts and has a direct effect on asset price in the free market. While it’s true that the founders of the project are personally invested and stand to gain or lose from the success, or failure, of the project, I do not believe any one individual’s net worth is an important factor in determining the value of ADA or the underlying network protocol it is derived from.

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33

Thank you for enlightening me. I really appreciate learning more about the technical side of things and this thread has certainly improved my knowledge.

There is no point in debating the quality of the project, as we all know how solid Cardano is and how cutting edge and capable is the team behind it. Let’s skip the obvious part of Cardano being probably the best project around the crypto space.

We can then assume that all your technical considerations are already in a very good place or will be at some point in the near future. Shouldn t that go hand in hand with a “healthy price” evolution?

Since the price has been on a rather pronounced downtrend and for quite a bit already, is it far fetched to believe that the perception of Cardano by the public (or the public sentiment, in your own words) deviates greatly from the real value and quality this project brings?

I clearly see a problem there, and since there is a problem it would make a lot of sense to come with a solution to fix this highly inaccurate public perception of Cardano.

At this point there might not be much to actually market, as it was already stated by several other thread contributors, but a lot can be done in order to spread awareness of Cardano, improve the public perception and pave the way for Shelley, so when Shelley finally comes it will be a boom in price instead of a further price decrease.

I have to disagree with this statement.

I actually think individual net worths are what will either make or break Cardano.

After all, if the price keeps plunging and the asset begins to be perceived as one that will decrease your net worth instead of increasing it, no one will want to come near the asset, further pressuring the downwards price spiral. Not a good scenario for a project that wants to be fully decentralized in the near future: It needs to keep its community around it and achieve a “healthy price” in order to be capable to pay for itself when the ICO funds will be depleted.

I think we are very far away from this extreme chaotic scenario and there is actually a lot of promise ahead.

However, it certainly wouldn t hurt our chances to pay more attention to the price and act on improving and changing that price perception, starting now!

34

The price of the asset in an open market has no bearing on the value. Eventually equilibrium will be found, but the market can stay irrational longer than you can stay solvent, as they say.

What you see as a problem that needs a solution is healthy market dynamics at play. There is certainly an informational asymmetry involved, however. Those who are able to compare similar projects may find subtle differences that would lend clues to future outcomes.

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35

说的很棒！FiconTozo

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Taken into account those considerations, current real life implementation and future perspectives current price per unit is what it is …

Interesting statement - things are finally resurfacing in real form. Yes, you guys do it for greater good,developing something amazing but with other people money). F*** investors and their money which your colleagues are happily spending in IOHK, Is that what you are trying to say in lay term .?

My advice , try not to be very sophisticated in your answers , but be informative.
Simple example if you are so big on valuating Cardano base layer protocol please include benchmark comparison with peers so we may learn something …

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37

The price of an asset in any market and its evolution is the ultimate summary of that asset. It plays a huge role on the perceived value of the asset and will, of course, affect the real value of the asset. So, the price of an asset actually has a big influence on its value.

I find it very interesting that you will mention both an “irrational market” and “healthy market dynamics at play”. In my book it is either rational market and healthy dynamics or irrational market and unhealthy dynamics. There is nothing healthy about ADA price evolution.

What you call an informational asymmetry I would call a total failure from Cardano to properly market the project to the world and convey the right perception. This is particularly concerning when you consider that the project has a commercial arm, Emurgo, who is solely dedicated to Public Relations, Commercial Initiatives and Marketing.

38

Well I have a simple example. It scares me a lot. BETAMAX vs VHS. I dont know why VHS won. The other type was far better. But nobody was using them.
I am afraid the time will pass faster than we expect. And while we still argue that ADA is far superior than the others, a “coin” will be invented that doesnt need internet to transfer (for example). And all that fighting will become pointless. Just like the vhs-betamax war became pointless when the dvd came around.
We simply dont have all the time in the world to prove ADA is better. This must happen sooner.
#but they were all deceived, for another ring was made!

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39

We all think it, you said it.

Totally agree, I also would like to see more hard facts showing that Shelley deadline will finally be met and that the price might improve at some point, instead of all those “blind opinions of faith”: This is not a cult, this is a business after all.

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40

Excellent example.

Having the better product will not take you far, if you don t promote it properly and no one knows (or even cares about) how good it is. So, you should be scared. I know I am. What scares me the most is that nobody seems to care.

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41

Hi, crypto is a very volatile and risky asset. It’s really important to do your own research and try to understand the pros and cons of the various coins. As much as I’m glad to share information and be generally helpful It’s not the job of people here to schill Cardano or convince anyone why they should buy it. At this point aside from the original Japanese who funded the IPO (and did very well financially) we are all for the most part some mixture of speculators and believers in the technology and mission. In my case my research into the team, technology, and personal alignment with the mission, as well as my desire to better my own lot in life has led me to swap some of my fiat for Ada. I continue to monitor the project closely and see if there are reasons to adjust my previous conclusions.

Regarding the VHS vs Betamax argument I think it’s an overly used generalization. One needs to look at the specific facts and circumstances of specific cases to have a chance at predicting the outcome. The simplistic notion that Betamax failed only because it did not market well is not true. After googling “why did Betamax fail” I found this article which is quite interesting as elements of it actually support Charles’ strategy:

I’m sure one could quickly find more info on it, but it illustrates my point of the importance of doing your own research.

Crypto at this point in time demands a great deal of individual accountability. I think this is a good thing. But with that said don’t gamble more than you can afford to loose and if you feel like at any point the risks outweigh the rewards cut and run.

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