Why Tribe Tokens Might Not Be A Great Investment...

I refuse...

In this world we live in, there are many things where we can invest in, some good, some bad, sometimes it's clear which ones are bad and which ones are good, but not all times!

Sometimes the bad investments are disguised as really good investments! Really good investments that have a large community supporting them, sometimes the community is so large that you feel like it's nearly impossible for all of those people to be wrong... but they are! These are the types of investments every investor needs to be careful about, the ones where everyone is saying good things about but in fact, they are full of crap, investments that are going to make you lose thousands of dollars!

But why am I talking about this? Because of tribes...

On Hive, there are many Hive-engine tribes that are gathering around different tokens, each powering a specific tribe with specific content. LeoFinance, StemGeeks, PalNet, Neoxian, Battle, Weed, Sports, CTP, CCC, etc... tribes are a great concept! If I want to find a specific type of content I just need to go to a specific tribe. If I want to write a specific type of content I just need to write on the frontend of a specific tribe. If a reader wants to learn about games or investment there are specific frontends to go to. And the value, inflation, demand, and supply of the tokens don't get all mixed up with each other! But there is an issue with these tokens... demand!

The value of everything is related to supply and demand, on the demand side we got sellers and buyers, on the supply side we got inflation and deflation... if something has high inflation, the price will just go down, if something doesn't have demand, the price will go down... and this is the issue with some tribes...

For a tribe token to sustain its own price it needs demand, because inflation is needed to distribute rewards to content creators, so the supply will just keep going up and up! And burning portion of the inflation by burning author or curation rewards doesn't do much, because it's just a portion of the inflation, if we burn from 5% inflation to 4% inflation there are still 4% inflation that will drive the supply up and decrease the price. Demand is where tribes need to focus!

There are two main ways to increase demand for a tribe token:

The first one is to increase the people buying the token! A person buys to stake, to use to increase the exposure of the posts, or other such ways, these are good ways, but they don't monetize the content of the people, it's just using the money that someone gets from their hard work in real life (their real-world job) to increase demand for the token.

The second one is the best one, and it is the one that LeoFinance uses! It is the reason LEO is one of the best performing tokens on Hive-Engine and the reason why I mainly write on Leo, focus on Leo and it is the only token which I've bought a small amount!

LeoFinance monetizes the content using Ad revenue. This is the best way to increase and sustain the price of the tribe tokens! Because it creates real value by monetizing the content, otherwise the content is not creating any value!

Value is created through selling something, in this case through selling the attention of viewers using ads! If you write a whole article really well detailed and well written and put it on a website that has no ads, no value is being created! And, even worse, are the ones that have ads but keep all the money without giving it to the content creators...

There are some tribes out there that have ads on their frontends but the tribe's owner keeps all the ad revenue for himself! They give the content creators an ever-inflating token that has no demand, resulting in the token's price going down, down, and down! These tribes are no better than Facebook! They keep all the money for themselves and give the content creators a token full of air and a dopamine rush from getting tokens/likes!

In one of the first posts about SCOTbot more than one year ago, aggroed described really well the choices that the tribe owners have:

The next major step after getting the prototype launched is incorporating advertising into the custom websites. If this all works your investment in a Scotbot community will generate more revenue in ads than is spent on running the community! What you do with that revenue is up to you! Will you collect it and lambo-up? Or will you buy tokens with it to burn to inflate the price? How will you manage the project?

I refuse to write or invest in ANY tribe that has no ad revenue buying the token and either burning it or staking it! I refuse! Without the ad revenue model, it's not an investment! It's not a business! If the tribe has ads that don't buy the token you are writing content to make the owner of the tribe richer, not yourself! Your content is generating value for him or her! Not for you! And the tribes that don't have ads at all don't even monetize the content! Literally, no one is getting the value the content generates!

In the end, be careful with the tokens you HODL and invest, if you can't see or understand where the demand is coming from, don't put any money in...

Images Free Source - 1, ,3,4,5,6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27 - Tradingview snapshots too.

Question of the day: Which Tribe Tokens do you invest in or are thinking about investing in? Do you see a positive future for Tribe Tokens?

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Posted Using LeoFinance