How do the tokens maintain liquidity?

Liquidity is an important consideration for any investor as it provides assurance that they can sell their tokens when the time comes. 

Forecast Services Limited, the issuer of the tokens, plays no part of the trading of the tokens.  We do not enter the market to provide liquidity.  Liquidity therefore depends upon having demand for the token from other buyers. 

Several factors work to help create this demand:

  • Scarcity – there are only 4 million of each token.  This can help generate demand as people compete to hold a scarce resource.
  • Performance – the performance of the Phi algorithm in predicting when Bitcoin prices will fall can improve the Target Price so that holding the tokens offers a better return than Bitcoin.
  • Limited exchanges – the tokens are only listed on the Waves Decentralised Exchange (DEX) and trade on the XBE / USD pair. This helps liquidity by having all buyers and sellers in the same location.

That said, as the tokens are meant as a store of value, liquidity, especially in the early days may be low.  People are likely to buy and hold the token as they would with other investments.  This means that there may be times when sellers need patience when they come to liquidate their position.  HODL.

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