"I never understood why companies cannot build so-called "tokenized services" directly on top of established tokens such as BTC" Please read the attached picture.. #OST $OST http://ost.com pic.twitter.com/9C71sRJJIP
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So when users have BTs, they are guaranteed a fixed BT-to-OST conversion rate. Apologies for not reading your article before making above statement. BTs are hard-pegged to OST, got it.
But with all due respect, I still don’t see the point. Nothing changes here. All you’re doing is allowing companies to outsource the risks normally associated with utility tokens (if the companies were to launch their own) to somebody else - the OST token.
The same risks still apply. Higher liquidity & volatility risks compared to using an established “money” token like BTC directly. More importantly, the risk of OST going under, which would instantly makes all OST & BT tokens worthless.
Not to mention the *added* risk of having to trust the OST platform & wallet for always honoring the fixed BT-to-OST conversion rates.
All this complexity for the sake of putting an extra layer of friction (multiple representations of essentially the same thing) in front of the user. Sorry but I don’t see the point.
To add: OST is essentially competing with BTC to be the backing asset here. But unlike BTC, which is decentralized & has something real behind it (the PoW chain), OST is centralized & is not backed by anything.
The risk is no different than when having a token based on either BTC, LTC or ETH
..also employ a 3rd party (large OST hodler) to take some of the riskpic.twitter.com/L4ykumgryX
The risk you talk about is not 'outsourced' to OST. There is the price oracle that can insulate consumers from price swings of OST on the market (as BT do not increase or decrease in value on their own, their value is derived from the OST tokens that back them), but one could..
However, companies can chose to employ a price oracle that follows the OST USD price on the market and can have the pricing of the BT prices in their BT economies auto adjust, so that the pricing will always correspond to a certain USD value (if they so choose)
The Branded Token ratio to OST is locked in a smart contract after minting, yes (each company get's to decide what ratio they want and after minting it is irreversable). OST itself is on the exchanges and can fluctuate in price due to changing demand for OST on the market.
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