We studied the Taiwan dollar valuation model, from the fire currency HT deflation growth space

On January 28, the trend for exchange options continued with Launchpad, fire Prime, OKEx Jumpstart, Kucoin Spotlight and more. Large and small exchanges unwilling to lag behind, a variety of new gameplay is constantly updated. Under this momentum, each Taiwan dollar has a different degree of increase.

Until now, exchanges have had two main parts to their profit model. First, coinage fee. The user base of the exchange is the most valuable resource. If the project wants to trade its own tokens on the exchange, it has to pay for the user resources of the exchange, namely coinage fee. The second is the transaction fee, which users pay to the platform for any operation on the exchange. But now IEO and Prime are the equivalent of a different approach, with the exception of the exchange's Taiwan dollar.

Because either IEO mode or Prime mode, users can only use exchange Taiwan dollar to trade new items, in the case of only one way, Taiwan dollar demand soared, the value also rose.

The value of each Taiwan dollar is now very different, some are still at a high price, some have fallen by half. So, how should the user judge the value of Taiwan dollar is reasonable? This paper will take HT, which recently completed the Taiwan dollar repurchase, as an example to carry out an in-depth explanation of the Taiwan dollar valuation model.

Company's equity

It's fair to say that in the first half of last year, exchanges were in phase one, with only pure trading functions. We can think of an exchange as an Internet company. The Taiwan dollar is to an exchange what a stock is to a company.

Since it is an Internet company, you can use the general p/e valuation method. With the company's earnings and p/e ratio, estimated the value of the company, and then amortized to the Taiwan dollar. The greater the exchange return, the greater the Taiwan dollar value.

Obviously, the user base is large, trading experience good exchange Taiwan dollar will be more easily accepted by users.

Here's an example: the exchange's HT, the Taiwan dollar, had a steady stream of new offerings at the start of last year, and the number of users was sure to grow. That, combined with an upturn in the market last may, pushed the Taiwan dollar to an all-time high of nearly $6. Holding HT is equivalent to holding an equity stake in the exchange, and it makes sense for the share price to rise as the exchange's returns rise. HT prices also fall in line with market law when the market goes down.

Figure note: prices from February to December of HT18

The Taiwan dollar was given new value

But now the exchange Taiwan dollar value, has been unable to use this method to measure. Now, the exchange is no longer just a trading function, the Taiwan dollar bears more attributes.

Here's HT again:

Huobi Global announced the launch of the Huobi Chain in the middle of last year, and HT will also become the original token on the Chain. The value of HT can no longer be expressed in terms of equity, so the transfer of value in the chain is much more valuable than the equity in the exchange alone. Like Block One, the company that created EOS, its market value cannot be equated with the value of EOS. Block One raised $4 billion, while the market value of EOS tokens peaked at less than $2 billion. The difference between the nt dollar and the token has led all exchanges to rethink their valuation models for tokens, but there is no doubt that the nt dollar, with its dual mandate, is increasing in value, but its price depends on the market and product.

The recent Prime has given the nt dollar more value, and HT has become a new coin-dependent channel. In the past, when a new project is put on the exchange, it must first trade with the most mainstream currencies such as BTC and ETH, because these two currencies are most easily accepted by users. On Huobi Prime's Prime platform, new projects can only be traded with HT, where HT is given BTC equivalent status and value.

Each of these new values will have a different and not unique evaluation system, which depends on the performance of the whole chain, the community activity, and the applications on the chain. The platform depends on the number of participants, the user experience and so on.

Buyback and destruction

In addition to the increase of the carrying value of the Taiwan dollar itself, the exchange's management of the Taiwan dollar is also an important factor in the valuation of the Taiwan dollar. With nt $BNB destroying 20% of its revenues every quarter, the value of airbnb has grown steadily, rising steadily from nt $40 to nt $120 in recent months.

Still take HT as an example:

Fire COINS are also repurchased quarterly against HT, but the repurchased HT is airdropped to the HT holder, so the total amount of HT does not decrease. In the fourth quarter of last year, huobin bought back 10 million pieces of HT and airdropped them to HT holders.

And from the first quarter of this year, fire currency according to user votes, announced the buyback of HT is no longer airdropped, but destroyed.That is to say, HT's economic model has changed and become a deflationary Token, increasingly scarce.In the first quarter of this year, 647,800 of HT's first executed "repo destruction" were about to be destroyed, accounting for 2.52% of the current quarter's market circulation.

Source: huobi 2018 Q4, 2019 Q1 announcement

Fire currency will buy back 20% of the quarterly earnings and destroy, reducing the total amount of HT, which also guarantees the stability of HT value. Fire COINS will repurchase 6.5 million pieces of HT in the first quarter, which is less than the last quarter of last year, but actually increased due to the increase in the value of HT (HT price almost doubled from the same period).Based on the HT price as at March 31, the buyback funds of huobin in this quarter were us $16.3165 million, an increase of 49.5 percent or about us $5.4028 million over the previous quarter.

The increase in the repurchase amount,Quarterly earnings, which can be reversed, also rose by the same percentage. Based on a 20% return, huobi's revenue in the first quarter of this year was $81,582,500, up $27,013,900 from the previous quarter.

In addition to the slight improvement in the market, the exchange's own layout is also important. For example, Huobi Prime, launched by Huobi, had 130,000 people participating in its first phase. After the launch of the contract, the trading varieties, stability and depth of huobi currency have been continuously optimized.According to the data of March 31 of non-trumpet, the total turnover of huobin is 1.417 billion us dollars, more than the sum of the two and three.What's more, the first quarter coincides with the lunar festival, which is a slow season for the exchange, plus the development of HT's new scene is just beginning.These new businesses, including the new PRIME business, are all contributing to the improvement of the Taiwan dollar value. In the future, we may see the emergence of more new formats to improve the "platform share price"., HT's valuation still has room for improvement in the future

If we use the new valuation method to look at the Taiwan dollar, then the recent recovery of the Taiwan dollar plate is expected. Through the above analysis, the Taiwan dollar valuation is positively correlated with the two factors. B. Usage scenarios.With the increase of 50% in Q1 quarter compared with Q4 last year, factor A will naturally increase;

whileHT changed to deflation as the threshold to participate in Prime, these are new scenarios, so factor B also increases.Two factors together, HT's valuation has actually increased. This is also the market to give it recognition, and then the logic of the rise.

Similarly, other exchanges that follow market trends and cater to users' needs will see their value rise as market enthusiasm returns, echoing recent bullish views on the Taiwan dollar. Other exchanges have seen the Taiwan dollar gain on this trend.If the exchange's revenue increases further and usage scenarios increase further, the Taiwan dollar's valuation will also increase further.

At present, the value of the Taiwan dollar is far from representing the equity of a company. There are more and more stories about the Taiwan dollar and the overall ecological value of the exchange. Now, who knows how far Taiwan dollar and exchange ecology can go.

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