Fantom token Valuation

Today we will talk about the valuation of the FTM tokens, which is the backbone of the Fantom platform. There is much information available from the Fantom platform to do the valuation of the FTM token. But before we do the valuation of the FTM tokens, we need to understand the basic thumb rule of valuation. If we don’t know what principles we are using to do valuation we can’t learn and gradually we can’t grow. So valuation principles are incredibly essential to understand before becoming a smart fund manager or growing as an investor.

So what buffet and many other greats have mentioned since the last century is a simple valuation principle that if a company is making 10 Million USD in profits every year the valuation of that company is around 100 Million USD… Now how did we come to this conclusion ? …So the simple math behind this is that if you give someone a loan, you would expect around 8 to 10 % in interest from the borrower..correct? so over the period of ten years, you would eventually get your entire capital worth of money back … So a 100 percent profit….so if you can double your money in a decade it should be considered a fair deal…It is very essential to understand this principle, if you don’t understand this then you can join our telegram group to ask as many questions as you want.

So before I apply this method to fantom token I want to mention one important thing which is that one has to use every possible information available from the project in order to do the valuation .. every line of information from Twitter to telegram to medium blogs…every line is important because it is somewhere in those videos and articles where you will have the necessary information to do the valuation. Now let’s apply this method to the fantom token.

Fantom platform needs a very different set of valuation methods as these kinds of protocols and products never existed before. This project is not your regular project in which you can do the valuation by knowing the token burn amount and a couple of other things to come to the conclusion of valuation. This kind of valuation requires skills and patience and one needs to know what to look for to do the valuation precisely.

Valuation of FTM tokens can be done through the transaction fees platform collects and probably gives to the validators. So this is a unique probably only logical method to come to the conclusion of FTM tokens valuation. So as you can see here on the FTM scan the fantom network transaction fees on daily basis are around one hundred thousand fantom coins. Now if we consider the average price of fantom around 0.5 USD to be a median during this period then we have daily gas fees of around fifty thousand dollars. Now comes an extremely tricky part of the valuation and that is to know what amount of transaction fees go out of the fantom ecosystem? … Because the transaction fees are basically a form of profits of the validators.

The answer to this question is very likely to be none. None of the tokens are likely to go out of the ecosystem because the validators are likely to invest those profits back into the ecosystem and the even more important thing is that the validators will need to own more and more FTM tokens in order to be the top validator. So overall we can come to a conclusion that the ecosystem is likely making 50,000 USD in profits. Make no mistake that we haven't counted the growth of this protocol which is likely to be exponential. We are not including the growth because we want to be more and more conservative.

Now let's get back to the formula which we mentioned in the earlier part of this video. We need to project the 1 year of total profit in order to do the valuation of this protocol. We can multiply one year's profit by 10 in order to come to the conclusion of the valuation.

50,000 USD multiplied by 30 days multiplied by 12 months gives a yearly profit of 18 Million USD. Now if we multiply 18 million by 10 then we get the valuation of the FTM token which is 180 Million USD. Now the fun part begins with this valuation method. As I mentioned earlier that these protocols are one of a kind in history so valuation will also require some unique ways to do the valuation. The most important part of this valuation is that we need to include that people are gonna hold a lot more of the FTM tokens in order to pay the gas fees either as an investment or to avoid the hurdles of running out of gas every now and then. So it is likely that people are gonna at least hold 50 to 100 times more FTM tokens than the gas fees method of valuation. If this is true which is likely the case then FTM tokens will carry a valuation of roughly 9 billion USD at least. If you see the current price of FTM then it is around 400 million USD so it seems that the FTM tokens are pretty undervalued right now.

I want to now talk a little bit about long term coin … A lot of people can have limited capital to invest even if they have the skills to invest and that’s why long term coin protocol gives capital to invest if you are a skilled fund manager who either sensibly understands valuation or carries trading skills.

As you can see this article in which there is 50% weightage given to the amount of long-term coin you buy from our token sales and the remaining 50 % is given to the returns you give consistently on all these defi protocols like enzyme finance and a couple of other protocols. So earlier you own long-term coin lesser returns you can afford to give and still will be able to manage funds in higher amounts…it might sound a little hard to understand initially but you can join our telegram group and ask as many questions as you want to understand the protocol. link for telegram is available in the description. We will be happy to assist you. Your commitment to understanding our protocol can make and break a lot of things for you… Go through our medium articles and our youtube videos to understand how owning more and more long-term coins can help you massively to claim more and more funds to manage because even if you have skills in buying undervalued assets you will need increased capital to invest without getting liquidated.

So becoming a fund manager and managing other investors’ funds is hard but we believe in your skills and that’s why we are inviting you to understand our protocol and start claiming funds to manage. Here either you can own fewer long-term coin tokens and give higher returns or you can own more and more long-term coins and can afford to give lesser returns and still be able to claim a massive amount of funds to manage. In long-term coin protocol, everything balances out itself. That’s why we call it a self-sustaining protocol. I hope you all enjoyed this video and if you did enjoy then please subscribe to the channel and like the video.