I hope it’s not just a fairytale… would be great
First of all, great spreadsheet! Am I right to conclude that the current market conditions is at row 33? Is the monthly volume tied to Bitcoin or the cryptocurrency market in general?
Yes row 33 is the closest to current market conditions, monthly volume is tied to market cap and subsequently bitcoin’s price. Since volume is only loosely tied to market cap (read: bitcoin’s price) this spreadsheet will never be perfectly accurate however based on the back-testing I did when it was created it was close enough (+/- 15%). No guarantee that it’ll hold up over time especially if as we go over 50k the trading shifts to the larger platforms that target the institutions (fidelity, bakkt, etc…).
How is the NEX price on return (5% and 10%) calculated? So in that row’s calculation the price of a single NEX token will be 62.63 dollars? (Seems like a lot). Sorry for the many questions, just want to make sure I am reading this right. It might be a great tool for the future months/years.
So first we need to take the monthly return (column E) in this case $521.19 multiply it by 12 (for the 12 months of the year) which gives us $6254.28 then divide that by 1000 (E is the returns on 1k tokens) which leaves us with $6.25 per token per year. So if $6.25 is a 10% annual return you can multiply $6.25 by 10 to get $62.50 (10% * 10 = 100%) or in the the case of a 5% annual return $6.25 by 20 to get $125 (5%*20 = 100%).
So as a formula using the column letters;
((E * 12)/1000) * 10 = price @ 10% annual return on investment
((E * 12)/1000) * 20 = price @ 5% annual return on investment
Just a reminder that I’ve done these numbers based on a 2yr stake (i.e. a 75% share in trading fees) so if you’re planning on staking for shorter periods you’d need to adjust the value of E to reflect that first.
So far the best suggestion I’ve seen for staking is to split your tokens into 24 portions and stake each portion for one month more than the previous one. That way at the end of each month you’ll have 1/24th of your stack available to sell or re-stake and assuming you don’t sell after 2yrs 100% of your tokens will be returning 75% of the fees and you’ll still have the option to sell or re-stake at the end of each month. The drawback here is that if you want to unwind your entire position it’ll take 2yrs to do it.
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Thanks for the extended explanation! Did you see or do any calculations on token price based on certain market conditions? Might dive into that one, it’s a really interesting topic on top of the dividends.
12 Billion monthly volume on Nash is a possibility in a few years, but I don’t think the focus can be on Bitcoin appreciation only.
The focus needs to be on increasing the users, and finding every way possible for Nash products to funnel into the matching engine (ME):
1a. Liquidity and addition of top tokens traded (BTC, LTC, XMR, ETH, etc, etc.)
1b. Market penetration for each trading pair
2. Nash products that funnel into the ME
3. Margin trading
I’ve ranked them based on importance. If #1 cannot be achieved, the trading will suffer like any other up and coming exchange (CEX/DEX/hybrid).
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I was about to criticize your answer, but I read it again and I think that’s exactly what I think.
Until there are no pairs with BTC everything is a great illusion.
This is all very bullish and fun to think about, but what it’s really making me consider is how much potential market there is out there that hasn’t even gotten into crypto yet. As nuts as some of those numbers might look now, it may not be completely fantasy.
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BTC will not remain as the king for long. Even our dear Samsung did not support BTC for the S10 phone.
I wonder which pair will bring the highest volume. I hope they list popular coins like CHX, LTO that are not served by Binance currently.
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Yes CHX is very powerful
Love seeing this kind of “what if” number crunching…sometimes tech advancements surprise us …here’s an early Apple Mac with a “whopping” 128K RAM !) 
=>
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One of the reasons for focusing solely on the market cap / Bitcoin price is because it’s something that is easy to draw data from and compare Nash to other projects in the same space.
Margin trading will require licences so until those are acquired it’s not worth speculating on, although if you wanted to you could take a look at Bitmex’s reported volume and draw your own conclusions from there.
In terms of user adoption the bare minimum will be good UI/UX to draw users away from existing platforms and make on-boarding new users easy. However like you’ve stated the most important factor is liquidity, it’ll be really difficult to draw people away from existing platforms without significant depth to the order-books (here’s my take on how we go about addressing that). The users to get liquidity and liquidity to get users is the same chicken and egg problem that the rest of the exchanges are facing and in my opinion the reason for all the wash-trading and fake volume that’s going on.
This leaves us with potential markets that drive transactions through the matching engine the largest of which is payments/merchant adoption, the biggest player in this space is Visa.
So just for fun…
Visa processes ~$500 billion a month in debit based transactions. With the exception of Nexo, DAI and a few others we don’t really have credit yet in the crypto space yet so you can only really compare against Visa’s debit based transactions.
So if we were to capture the same market share as visa the max possible would be $500 billion a month however to receive dividends all of the transactions would have to go through the matching engine implying that customers never have the desired currency of the merchant. Since that’s unrealistic we could assume that 10% of transactions require conversion via the matching engine which would lead to an increase in transaction volume of $50 billion per month. This is still too optimistic since to take all of visa’s market share we’d need to see some crazy adoption and some serious issues with visa. So lets assume we can acquire 10% of visa’s market, that’d give a $5 billion dollar boost to monthly volume based on the same assumption that 10% of transactions require conversion via the matching engine. Which is still overly optimistic in my opinion and a little less than what’s possible just by taking market share away from the other exchanges.
Another interesting one to think about is Amazon, they did $232 billion in sales last year so approx $20 billion a month. Suppose all of the merchants on amazon wanted to use Nash to receive payments and 10% of transactions were required to go through the matching engine that’d give us an extra ~$2 billion in monthly volume. Again this is overly optimistic but you can see the potential that’s there in the e-commerce payments space.
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Amazing insight, so true, nothing left to say.
Great analysis, It all pivots on adoption.
Lets hope NASH can bring a wonderful UX, which rivals that of VISA et al, and can present a compelling reason to switch from a very well entrenched incumbent. Fees for merchants will be key.
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For a more in depth look at the beneficial effects of Staking checkout @RDB1983’s post
The Nash Effect, Get on Board!
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More on payments and the potential benefit to the platform in this post
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I let myself daydream a little and imagined what could be if a bull-run funneled into Nash. On January 4th, 2017, Binance had a 24hr trade volume of $10B.
It’s not the prettiest set of assets, but total marketcap (MC) was at $750B, and the projections for $T MC were pouring in. We all know what happened next, but it’s important to note that marketcap does play a sizeable roll in what levels of volume can be reached. Nobody could have predicted Binance handling that level of volume 6 months after launch.
I think $1.5T overall MC is achievable in the next few years as platforms mature and effectively fulfill their whitepaper visions. When it comes, it makes me wonder if we’re underestimating speculated returns.
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I agree that 1.5T is definitely possible, just to re-iterate how I’d use the spreadsheet.
Assuming a 1.5T market cap;
- BTC would be at ~$50k (achievable by sometime during 2022 in my opinion)
- BTC’s market cap would be ~$800B (similar to Amazon’s & ~11% of Gold’s MC)
- A 1% market share in global monthly volume would equate to ~$23B (~1% of NASDAQ’s volume)
This would result in monthly dividends of ~$0.6 per token and a token price of $75-$150
When cherry picking the best numbers you can find like Binance’s one $10B day which if even possible/sustainable would result in $300B monthly volume, I like to calculate what would happen if Nash was only able to achieve 10% of that i.e. $20-30B in monthly volume.
Note: As mentioned above the entire spreadsheet is based on the premise that volume scales linearly with the total market cap and BTC market dominance remains at 50% which may not prove to be accurate.
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