It is believed that many investors had similar expectations for the Bitcoin halving. This was confirmed by the first two Bitcoin halvings, which is often the starting point of a new bull market round.
In 2020, the mining volumes of many crypto currencies reduced. In addition to the BTC halving, BCH and BSV have already reduced their respective mining volumes.
Reduction will cause the deflation of tokens. Although some people think that they can make profit before a halving, some believe that happens after. It is undeniable that the reduction of tokens including ETC, BCH, BSV, DASH and BTC have indeed invigorated the crypto world. Not only has the search volume of BTC in Baidu and Google reached new high but the valid addresses (address balance amount >0.1 BTC and >0.1 ETH) of BTC and Ethereum have also broken the records.
It is no doubt that the halving is a hot issue and an investment choice for investors. So, what is the next popular halving token after BTC?
1. The Mining Volume Of POL Reduced
On July 6th, POL had its first reduction cycle, where the total daily mining volume was adjusted from 250,000 to 200,000 POL.
Pool-X is an exchange that provides liquidity for staked crypto. It is a state of free market that enables the integration of diversified crypto assets and multi-node on the public chain. Users can trade the staked crypto assets in the platform and obtain liquidity.
As native token of the Pool-X exchange, POL (Proof Of Liquidity) is a decentralized token issued by the Pool-X exchange based on TRON’s TRC20 protocol. It is in the nature of zero reservations to be provided to the team or any individual upfront. Playing a substantial role in the Pool-X ecosystem, POL bridges between tokens that are staked and those in circulation, paying with which allows the users to obtain instant liquidity even when the crypto assets are still in staking. POL is an incentive for participants who contribute to balance the market volatility and ecological governance, as well as the fuel for extracting Pool-X system resources.
That begs the question: Will all currency reductions lead to price increases? After a reduction in POL, will the price rise?
2. Demand Determines Value
Why would a cryptocurrency mining volume reduction cause a price rise? It is due to supply and demand. If demand remains unchanged, a decrease in the supply of tokens will cause a price increase. One of the most typical representatives is the Bitcoin halving that occurs every 4 years.
But not all tokens have demand and application scenarios, so the mining volume reduction does not necessarily lead to a price increase.
So how can one judge the evolution of the crypto market if the mining volume reduces? It’s quite simple: the demand and application scenarios determine the intrinsic value of a project.
What is POL’s value?
2.1 POL is the only shark in the blue ocean market
Currently, the Staking market cap has reached $ 20 billion. With ETH 2.0 coming, the consensus mechanism will shift from PoW to PoS, and so more crypto assets will be using PoS or hybrid PoS in the future. That means the staking market cap will continue to increase.
All PoS projects have a safe staked rate, which is about 67% based on analysis. We think crypto assets using PoS will account for 90%. That is, more than 60% of crypto assets in the entire network will be in the staked status in the future. The other 40% of crypto assets are in CEX, DEX, and DeFi, with CEX being about 10% of that. Currently, thousands of crypto exchanges are grabbing this 10%, and the other 60% of crypto assets will be served by Pool-X.
POL will be able to determine the underlying value of such a huge liquidity demand within the crypto market. Pool-X is in a field of its own, which means Pool-X is the only shark in the blue ocean market.
2.2 POL opens up a new market
Early in July 2019, the Staking economy had just risen. KuCoin launched Soft Staking services, which allows anyone to earn revenue every day without locking assets. It now supports about 30 tokens. Afterwards, KuCoin launched the first liquidity exchange—Pool-X, which encourages users to participate in staking to obtain benefits and POL mining rewards. Without affecting on-chain stated rates, users can transfer the staking certificates/credits on Pool-X liquidity trading market by paying POL to obtain circulating coins.
On other POS pool platforms, if you want to release stated assets in advance, users need to pay a higher cost, such as a little amount of staked tokens that will be deducted. In the Pool-X liquidity trading market, only POL can be exchanged for all liquid assets, and POL is acquired by users through LockDrop and Staking. For example, during the staking period, in addition to the staking benefit of the project, users can also get a certain amount of POL, so that means for early holders, obtaining liquidity is free.
In addition, POL is used as a carrier to measure liquidity requirements of staked assets. As long as the market has a demand for the liquidity of staked assets, POL’s value will increase. Take ATOM as an example. If the price of ATOM pumps or dumps heavily, more people will have the need to unstake their ATOM and trade in the spot market, and if they want to unstake, POL will be used in the liquidity market. As a result, the demand of POL will increase along with the fluctuations of the ATOM token price, leading to the rise of POL’s price. It is also the case for other PoS tokens like TRX, EOS or ETH in the future.
2.3 What’s the POL market cap in the future?
In the Staking field, there are many products similar to POL. The first is HPT. Its current market cap is $28 million, but strictly speaking, POL and HPT will not be essentially considered competing products. HPT is native token of the Huobi pool, in which users only obtain HPT after staking assets. On Pool-X, users can obtain staking benefits of the project and get a share of the mining rewards of POL. Playing a substantial role in the Pool-X ecosystem, POL bridges between tokens that are staked and those in circulation, paying with which allows the users to obtain instant liquidity even when the crypto assets are still in staking. Because the application scenarios and demands for POL are far greater than HPT, the POL market cap will exceed HPT in the future.
Stafi is more similar to Pool-X, but Stafi’s biggest problem is uncertainty. First, the Stafi project is still not online. So there's a lot of concern: will Stafi solve the problems of staked asset liquidity in the future? Or will it be able to adopt Staking business and more? In contrast, Pool-X has launched the liquidity trading market, and POL’s application scenarios have already been established. This first-mover advantage also determines POL’s dominant position in the current industry.
The POL allowed for zero reservations to be provided to the team or any individual upfront. From the above analysis, POL has the best economic model in the staking field, Pool-X has 300,000+ users, and both are receiving strong support from KuCoin. So we can predict that the market cap of POL is at the level of the mid-range exchange native token’s market cap. The market cap of mid-range exchange native tokens is as follows.
3. Will the POL reduction cause an increase in price?
The market has strong expectations for the reduction of the top cryptocurrencies, and also the price of mainstream cryptocurrencies increasing after the reduction. The details are as follows:
Poolers also have strong expectations following the first reduction cycle of POL on July 6, 2020. The performance of POL after reduction can prove this.
The price of POL had shown signs of rising on July 1st with an increase of 2.22%. On July 6th, when POL reduced, the price of POL raised more than 30%. Its price has increased nearly 100% in the past week.
It is proven that the reduction of coins and tokens which have appreciation logic and application scenarios like POL can bring profit to users. Although it is not known how long this increase will last, the author is expecting the next reduction cycle of POL.
POL distribution is in its early stages, which is reflected in its current focus on Staking to attract more users and liquidity for the entire Pool-X ecosystem and selecting qualified users for staking. In the later stages of its ecological development after some cycles of mining reduction, the main circulation of POL will be supported by the appreciation logic and application scenarios of POL itself, which can better serve the entirety of the developing PoS ecosystem for the long term.
Pool-X has launched a series of events to celebrate the reduction, like Zilliqa (ZIL) Staking and LUNA trial fund activities, which are also good opportunities to make profit on Pool-X since users can get staking rewards and also mine POL every day by staking. Users also can take profits without cost by participating in trial fund activity which is an opportunity for users to experience Pool-X.
