carVertical presents fiat to cV conversion + token burn logic
As sure as eggs is eggs, one of our main goals is to ensure cV token’s price correlates with carVertical’s success in sales.
As carVertical’s CEO Rokas Medonis announced in his annual letter to cV token holders, that has been one of our biggest focuses recently.
We’ve designed a number of mechanisms which can help us maximize the chances of achieving our objective. Now we’re ready to present the first one and test how it works in a real market.
What is it?
Today we would like to introduce you a conversion from FIAT to cV token model which also has a token burn included.
Why will we do it?
We strongly believe this model can help with various aspects, such as: increasing volume, increasing token demand, decreasing token supply and finally ensuring that our company’s success will correlate with our token’s success. However, having in mind the dynamic nature of the crypto world, we’ll carefully monitor the situation. If it’s needed, we’ll improve the mechanics in order to have a bigger impact on token economics.
How will it look?
The process for this mechanism looks as follows:
On a more detailed note, this is what we mean:
- Someone buys a cV report (currently priced at 14.99 EUR).
- We convert the received FIAT into BTC or ETH.
- We calculate the randomized sell price, and burn tokens that we would receive from selling at a higher price, before putting a sell order.
- We take that BTC/ETH and buy cV tokens from an exchange of our choice (depending on the volume). Note: at a current stage, this will happen on KuCoin, but if there will be an exchange with bigger volume, it will happen there.
- We place a sell order for a higher price, but we sell a proportionally lower quantity of tokens to receive the same amount of crypto that we spent. The quantity is calculated based on the price of the sell order.
For instance, if we buy 10,000 cV tokens for 1 ETH and decide to sell them for 1.1 ETH, we then sell approximately 9,109 cV tokens to get back the 1 ETH we spent. Note: the sell price is randomized.
- The ETH/BTC we received after completing the sell order is then withdrawn to cover cV's expenses (salaries, rent, servers, data acquisition, marketing, etc.)
Note: if the sell order is placed at a higher price, the amount of burnt tokens is also increased.
This mechanism is currently being tested internally and will be live in the upcoming days.