How it’s going at the Buoy sale
On December 9th, Buoy’s two week public sale began. Not exactly a textbook example of a launch, there were a few hiccups with the webapp (which have as of now been fixed) and we only have had a modest amount of marketing. Still, in the first 72 hours, the sale raised more than 120 ETH.
This is incredibly important for the sale for two reasons. First, and most obviously, it demonstrates a real demand for Buoy. Second, and more importantly, it provides enough liquidity to virtually guarantee Buoy will be undervalued upon launch.
How do we know this?
Let’s do some quick comparisons between Buoy and it’s largest and most established competitor, Statera. With the amount of money raised this far, Buoy would have liquidity of around 111 ETH (not including any Buoy held in the index). This equates to just over 32 thousand tokens, which, according to the end stage price of the Buoy private sale, would give Buoy a market cap of just over 100 thousand dollars.
How does this compare to Statera? Well, here is my super high tech analysis done in Google Sheets
This breakdown compares the liquidity Buoy has already accrued against the Statera Phoenix Pool. The “per” category is a simple statistic to gauge relative valuation by dividing liquidity against the market cap. The third category is the most interesting. Buoy having 35% of the liquidity that Statera has at such an early stage in the sale is huge. Since our marketcap is still artificially controlled until the tokens are released, the sale is able to operate at less than 4% of Statera’s market cap. Should the token release right now, and the valuation comes to match that of Statera’s (i.e., it reaches 35% of Statera’s market cap) Buoy tokens would be valued at 31 dollars, more than ten times above sale price.
But that’s not all.
Here’s where the magic of the Buoy model comes into play. Common ICO sense would dictate that the more people buy, more tokens are minted. Therefore, that degree of undervaluation should go down as more people buy, right?
Wrong!
The inherent value of the token actually increases as the sale continues. For instance, let’s imagine another 100 ETH is raised at current prices (this equals an increase of 20000 tokens to the supply)
The hypothetical equalized price has gone up from 10x to 12x! And, this will scale along the entire sale, continuing to increase regardless of how much more ETH we end up raising, 100 or 1000. How how does this work? Since 90% of the ETH raised is put into the index fund, more participation in the sale isn’t simply watering down the token supply. Just the opposite! Every person who contributes to the sale helps back the platform itself, meaning the value added to the pool ends up out-scaling the decrease in value which new tokens naturally create.
This means if you have participated in the sale already, but have been keeping the Buoy sale as a hot tip to yourself, try spreading the word! It can only help your investment improve!
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