Another Day More Wealth Created

about 3 years ago

The world of crypto keeps expanding. In spite of the red day in the markets, there was an expansion where many saw their bags growing.

We are seeing the greatest wealth generation ever. One interesting thing about cryptocurrency is that we see airdrops coming out of nowhere. This can increase the value of people's holding significantly. Of course, this is all done without putting forth effort. It is essentially a gift to the token holders. Of course, there is usually a reason why it is done.

Probably the most notable situation where this happened was the Uniswap airdrop back in September of last year. The team behind that project decided to airdrop a "governance" token to its users. Thus, anyone who had used the platform during a certain period of time was eligible.

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Often airdrops are done with stuff that is not very valuable. However, in this case, since Uniswap was already a very successful application, the token was able to amass a great deal of value. This has only grown since the release, as the platform has seen a lot more activity in recent months.

As of this writing, the market cap for the UNI token is over $17 billion. That is a lot of money just to have dropped from the air.

What this does is it can instantly, and over a period of time, increase the total value of the crypto space. Uniswap is presently the #9 ranked token on Coingecko. Naturally, not all tokens are going to perform as well as this one has. In fact, to be honest, most that are dropped end up being near worthless.

Nevertheless, it does not take too many that are like Uniswap to make things very interesting.

Ampleforth is the 159th rank token with a market cap of $340 million. It was announced that the holders of AMPL would receive an airdrop of the governance token, FORTH. This was going to roughly 75,000 wallets.

Will FORTH match the success of UNI? Probably not. However, those who had the AMPL token, past or present, will he happy with the free tokens. Those who are committed to the project will likely hold onto the FORTH tokens. Others will probably sell.

Over the next few months we will see if this ends up becoming something of significance. If it does, this is something that did not exist before.

Like UNI and SUSHI before it, FORTH was created out of thin air. Yet it could hold serious value down the road.

It also enriched each wallet holder a bit more as soon as the tokens appear.

Here is something that we have to consider across the board. Each time this happens, the amount of wealth, individually and collectively, grows. Those who get the airdrop see an immediate boost while the entire spectrum of crypto is a bit more valuable.

As we see some of these projects enhanced by the network effect, the values can push up even more.

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Cryptocurrency was a major breakthrough. Whereas, throughout history, currency creation was only in the hands of a few, now anyone can do it. Over the last few years, we saw thousands of different tokens created. This is providing people with the opportunity to enrich themselves and others.

The key, of course, is whether they serve any purpose and who is using them. We did see a lot of stuff put together that is absolutely worthless because it really serves no purpose. Although that is probably not a good barometer considering the move in DOGE, a coin that has few use cases.

Either way, it is up to people to decide what they place value in. This is a big change. Instead of being told this is what one has to use and value, individuals are free to acquire, amass, and hold whatever they want. If enough people follow suit, then the token might have some value to the market as is evidenced by DOGE.

Even projects that become worth a few million dollars, if the tokens are dropped to a few thousand people, that can add up to be some money.

All of this keeps compounding. It is obvious why the crypto-sphere is growing in value so rapidly. With the high growth rate, these new tokens can easily be supported. There might come a time when this is not the case but we are a long way from market saturation. The entire industry is made up of a little more than 100 million people.

Considering there are over 7.5 billion on the planet, this is a drop in the proverbial bucket.

We are likely to see this process happen many times more over the next few years.

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