Why is everyone tripping over themselves trying to dump their coins already? HiPoS hasn't even been going for 24 hours yet lol. Calm down dumpers! In the meantime, there are some cheap coins to scoop up out there
In part 1 I told you guys how to prepare for a staking coin. This is part 2 and I can now post this because of the phase the coin is in now and is past the point of sensitivity.
When a dev codes hipos into a coin he signs the coin's death warrant, because of the economic principles of supply vs demand that dictate the path ahead. Hipos sounds sexy but if you look at the numbers, the inflation is so high that supply quickly outstrips demand. 99% of holders have the same objective which is short term profit and this objectives weighs heavily on the supply side and very light on the demand side. For a while people hoard coins to get hipos but soon realize that as their balance grows the price goes down because others are executing their strategy. The moneysupply grows really fast and there is a generally accepted ratio of price vs money supply (with certain attributes being equal) that can only be upset with some sort of very special attribute - a good example is eth where the normal ratio of price vs money supply does not apply due to the block chain services creating demand.
With hipos the moneysupply grows so quickly creating a hi-supply that causes the price to tank very quickly accordingly, especially since 99% wants to execute their short term profit strategy and mostly at the same time. It is therefore imperative that when you participate in a hipos coin that you firstly prepare your input blocks as I explained in part 1. You then need to hoard as much as possible coins before the deadline which is max age. When time to hipos < max age you must not tamper with your input blocks so as to not disturb your coin age. At this point if you do get more coins create a second input block. As hipos approaches, watch the blocks and activate POS 1 block after hipos starting block. When you get a stake, assess the market and take a portion of your stake to the market and combine the rest into one input block. You might do one or max two more stakes before you get out completely to prevent a situation where you hoarded too many coins but no demand remains in the market which = big losses. You can always get back in later at a fraction of the price discounting the projected short term moneysupply and finding the matching acceptable price at that moneysupply.
The next important principle is the active coins. Roughly 10% of moneysupply is in play and the rest is irrelevant and is dead and stored in wallets somewhere, unless of course distribution is very wide. In this case I am referring to when the population is the usual suspects in cryptoland. You need to work on obtaining a percentage of that active 10%. There is a point where it does not matter if you have 10,000 coins or 100,000,000,000 coins because there is only a market for that small percentage. Although you can keep on hoarding coins, it is not optimal to invest more than 10% of the moneysupply. If you are quick, you can make your own balance the active coins. There is an exception where hoarding coins is acceptable and makes sense and that is where profit is not the objective but as an anti-dumping measure for a special coin that you deem has a long term potential and you want to assist the coin.
To summarise I think it is a pity that the hipos was coded into this coin and it was disappointing to me, although it is the dev's prerogative. It immediately forces a certain behavior which is actually not ideal and which is contrary to what is required for long term survival of a coin. The outcome is always the same as one can see with other hipos coins like 10k and cionz. The outcome is always the same. Always. Actually. there are 2 exceptions. If an attribute can be found that upsets the general price vs money supply ratio of the coin and the attribute creates demand (wink-wink to the dev if he wants to make this coin successful and counter the normal statistics). The other exception I wont go into now.
Finding the optimal decision points and strategy can be very entertaining. In this case Yobit being down provided a curve ball, but the quick addition of C-CEX was pure blue sky.
The best for a coin is to have a steady money supply.
