An ingeniously designed vehicle for speculation
Updated
I've made a stupid amount of money in this thing since it started; so much so that it's making me question why I waste my time doing fundamental analysis on stocks, lol.
Ethereum Max is an ERC-20 (Ethereum-based) token that trades primarily on Uniswap and Sushiswap. (It's also tradeable on Alt5 and HotBit.) It's only nine days old, but as you can see, it's gone nearly vertical since launch. It's the number 1 trending coin on Uniswap and has been for the last couple days. As I write this, the market cap is $800 million and there are 47,000 holders.
In many ways, emax is just another s**tcoin (pardon the French). There are 200,000 of these ERC-20 coins, and there's nothing about emax's technology that makes it particularly useful as a cryptocurrency. They even did an upgrade a couple days ago that, IMO, they completely botched. But it seems to have an active developer community, out there actively marketing emax and getting it listed on new exchanges, which is more than I can say for most tokens like this. And there's one other thing that makes emax unique: it's the most ingeniously designed instrument for speculation that I've ever seen.
The Ingenious Premise behind Emax
Here's the ingenious premise behind emax: holders receive 2% of every transaction, distributed evenly among the holders.
That means that emax owners are strongly incentivized to hold rather than sell, and it means that the tokens become increasingly concentrated in the diamond hands of the strongest holders. As a result, the circulating supply of tokens continually shrinks. Shrinking supply means that buyers are fighting over a smaller number of available tokens and are forced to pay a progressively higher price. Rising prices bring in more demand, which further drives up the price.
Since the price of the last trade is multiplied over the total supply to calculate the market cap of the coin, you could easily hit a multi-billion-dollar market cap with relatively few transactions and relatively small amounts of money and tokens changing hands.
Of course, you're likely to see big drops in price whenever "whales" (holders with tens or hundreds of trillions of tokens) decide to liquidate. This could increase the circulating supply very suddenly, especially if the circulating supply has gotten really low. So you're likely to see big dips as well as big gains. But the incentive system is such that even if there's a big increase in supply, it shouldn't last very long. As those 2% rewards are distributed, the circulating supply will approach zero again and the price will go back up-- assuming that buyers remain interested in the token, as they likely will for a while yet. (Beware the proliferation of emax imitators, though. There are bound to be lots of them.)
I've pulled most of my early profits out, but I've still got a small position in emax and plan to buy the dips.
Ethereum Max is an ERC-20 (Ethereum-based) token that trades primarily on Uniswap and Sushiswap. (It's also tradeable on Alt5 and HotBit.) It's only nine days old, but as you can see, it's gone nearly vertical since launch. It's the number 1 trending coin on Uniswap and has been for the last couple days. As I write this, the market cap is $800 million and there are 47,000 holders.
In many ways, emax is just another s**tcoin (pardon the French). There are 200,000 of these ERC-20 coins, and there's nothing about emax's technology that makes it particularly useful as a cryptocurrency. They even did an upgrade a couple days ago that, IMO, they completely botched. But it seems to have an active developer community, out there actively marketing emax and getting it listed on new exchanges, which is more than I can say for most tokens like this. And there's one other thing that makes emax unique: it's the most ingeniously designed instrument for speculation that I've ever seen.
The Ingenious Premise behind Emax
Here's the ingenious premise behind emax: holders receive 2% of every transaction, distributed evenly among the holders.
That means that emax owners are strongly incentivized to hold rather than sell, and it means that the tokens become increasingly concentrated in the diamond hands of the strongest holders. As a result, the circulating supply of tokens continually shrinks. Shrinking supply means that buyers are fighting over a smaller number of available tokens and are forced to pay a progressively higher price. Rising prices bring in more demand, which further drives up the price.
Since the price of the last trade is multiplied over the total supply to calculate the market cap of the coin, you could easily hit a multi-billion-dollar market cap with relatively few transactions and relatively small amounts of money and tokens changing hands.
Of course, you're likely to see big drops in price whenever "whales" (holders with tens or hundreds of trillions of tokens) decide to liquidate. This could increase the circulating supply very suddenly, especially if the circulating supply has gotten really low. So you're likely to see big dips as well as big gains. But the incentive system is such that even if there's a big increase in supply, it shouldn't last very long. As those 2% rewards are distributed, the circulating supply will approach zero again and the price will go back up-- assuming that buyers remain interested in the token, as they likely will for a while yet. (Beware the proliferation of emax imitators, though. There are bound to be lots of them.)
I've pulled most of my early profits out, but I've still got a small position in emax and plan to buy the dips.
Note
Whoops; I misreported the market cap. $1.6 billion, not $800 million. I used a 1 in my calculation where I should have used a 2.That puts emax in the top fifty ERC-20 tokens by market cap. For comparison, Polygon, the leading Ethereum scaling solution, has a $10 billion market cap.
It's a stupid valuation for a token with 50,000 holders. But then, stupid valuations are in the nature of speculative investments.
Note
As a commenter noted, there are two emax blockchains, one of which was the pre-upgrade chains and is no longer supported. Should you decide to buy, make sure you use the correct coin address: 0x15874d65e649880c2614e7a480cb7c9a55787ff6.Note
Current volume is $100 million per day, or about 6.25% of the total market cap. All holders get a 2% cut of that daily volume. That comes out to about a 0.125%, or 125 basis point, yield per day. Compounded for a year, that's about a 58% APY. That compares very well to the best available yield farming and liquidity pool returns.Note
20 EMA on the 30-minute chart has been an important level for buyers. Note
So I came out ahead on eMax overall, but I definitely lost on my last couple trades. Crucial, I think, was a change that the developers made to the structure of the coin. Initially, eMax taxed all transactions at a rate of 2% and redistributed those fees among all holders. But then the developers increased the tax to 10%, only 3% of which was distributed to holders. The rest went to development and community initiatives. This made it prohibitively expensive to trade and acted as a massive disincentive, at least for me. The miner fees were already a lot, and I have to tell you, it *hurts* to take a 10% haircut every time you place a buy. After experiencing that haircut a couple times, it was pretty clear to me that I no longer wanted to own or use this coin. I've converted my profits to ETH and staked them on Coinbase as Ethereum 2 for a 5% yield.
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