One POV: Annual Return
What is the true value of one NEX token? This community has projected price exits, calculated speculative ceilings, and discussed many variables that will add to volume. I think we can use all the provided data to determine a price floor, and to do that let’s examine what traditional markets return for long term investors:
- S&P 500 Index avg annual return 8.6%
- Residential and diversified real estate investments 10.6%
- Real estate investment trusts (REITS) 11.8%
I believe NEX will mirror a more traditional investment so I’ve used an annual 10% return as a baseline for my calculation. This yield is what will draw investment funds and savvy investors looking for new asset classes (not to mention NEX’s security status).
Nash Price Floor
The formula provided by Nash based on two-yr staking: (monthly vol.)(0.0019)(.75)/50,000,000=dividend for one token
Fabio mentioned an initial goal of being a top 100 exchange; that’s roughly $1.5M 24hr trading volume per day, equating to $45M monthly trade volume. Based on those numbers, the price floor for one NEX would be $0.15.
(Wait, but the price on Coingecko is showing me $1.25-2.50 per token! Yes, supply and demand on third party/wash traded exchanges has a speculative value, but that’s a completely different discussion…just focusing on price floor here)
To justify the $1 token valuation during the STO last September, the matching engine would need to process $292,397,000 per month for one token to yield a yearly 10% return ($0.10). It’s important to note volume will not remain stagnant, and should grow as new products are released.
Price Floor Chart
The price floor is important because it is the price that will always be attractive to new and existing investors. Some will look at the $0.15 and laugh this off as FUD, but unfortunately, the numbers don’t lie. The blue row highlights the team’s volume goal for the first few months, and the orange denotes where the team would like to be two quarters post launch (aka top 50 exchange). One other interesting note: if the platform achieves it’s competitor volume
There are plenty of other variables that are not factored into this chart, but the focus here is on platform performance and what will keep long term investors buying. Thoughts?