1/ Projects selling 'utility' #tokens claim tokens are not securities and meant solely for use in the network
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2/ Yet, they are raising money by selling tokens via ICO. No chance there are 10s of millions of dollars worth of customer demand prior to launch of network.
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3/ If they are solely meant for use in network, then why would anyone hold these tokens since there shouldn't be any/much appreciation in value.
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4/ Makes much more sense to hold strong SoV and then use a 'utility' token as needed.
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5/ If nobody holds on to 'utility' tokens then velocity increases and price decreases creating a death spiral killing the network.
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6/ Alternative is, your 'utility' token has some SoV properties and so, many speculators purchase and
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7/ If token has SoV properties and appreciates in value, then it IS a security. It passes the Howey Test with flying colors.
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8/ HT: Investment of money - Yes Expectation of profit - Yes Investment in common enterprise - Yes Profit from work of others - Yes (if you took away developers would token still appreciate in value)
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9/ So either your 'utility' token will go to 0 bc velocity will inc over time or you are selling a security. Having hard time seeing an in between.
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Utility tokens can still be designed to capture the growth in the value of the underlying network by introducing sinks, stakes, mints, burns etc. the ones that will die are the ones that are currently advertised as just “MoE” tokens and nothing else
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