This article has been written by Javier B, an economist with +10 years of experience in product management and a specialist in the management of token and in-game economies. He has worked for companies such as TakeTwo Interactive and Vivendi, among others, and is the Chief Operating Officer at Euler.Tools.

It has been a week since Euler was released on PancakeSwap. Since then there has been a lot of movement in both the amount of swaps and the value of the token.
So I feel it’s worth sharing my insights about its tokenomics, its current situation, and what we can expect next.

Ultimately, my point after analyzing the tokenomics and fundamentals of the token, is that now it’s a great moment to buy EULER before the MVP version of the tool (tool getting out of beta) is released and the price increases.
And just so you know, I put my pocket where my mouth is: Currently, I own 255k Euler, and I plan to hold for a very long time.

Let’s see step by step how I’ve reached that conclusion:

Tokenomics are destiny

First we need to consider that EULER is a utility token. Its main use is to buy access to the premium features of Euler.Tools.
What this means is that it’s value is intrinsically related to the tool itself. Which right now is in development, so it doesn’t even allow to pay.
This means that the token is right now at its minimum value: Now it cannot be used for anything yet.
As the tool releases its MVP version, EULER will dramatically increase in price because a significant part of the tokens in circulation will be directed to pay for the service. Less tokens in circulation obviously means a higher unitary price.
By the end of April 2021, there will be about ~60M Euler that are not directly owned by Euler.Tools.

Assuming a price of $0.15 USD per EULER, a mere 100 users of the PRO tier ($449.99) would remove around 300k EULER from the market per month.

This extraction would even be increased significatively by a “buy X months in advance at a discount” offer — which is something we’re planning to do, but I cannot reveal the specifics just yet.

An additional factor that will decrease the amount in circulation are those traders aiming to hold more than 4k and 40k EULER, which grants additional benefits.
This effect would even be more noticeable if holding a significant amount of tokens would grant a % of the total EULERS paid to euler.tools (again, another feature whose details we plan to announce soon).

The specific date of the MVP version has not yet been announced, but the dev team and Jorge LS (euler.tools’ CEO) have been adamant on the fact that we’re talking in weeks, not months.

So, to summarize, as a utility token, the EULER will increase its value when it can be used to pay for the premium features of the tool. And, in doing so, the payments will extract a significant amount of the token in circulation, raising the price of the remaining EULERs.

The second point to take in account is that the euler token is heavily deflationary by design: Every transaction of Euler burns 1% of the amount.
So the more trading there is, the less tokens in existence will be.
Therefore, the recent fluctuations in EULER price (primarily caused by big EULER investors selling lots of them to buy BNB, aiming to buy more EULERS later), are actually contributing to raise the value of EULER and its capacity to increase in the long term.
It’s estimated that during the first 7 days of EULER in PancakeSwap, more than 2 million EULER (3.3% of all EULERs not owned by euler.tools) have been burned.

Tokenomics are destiny. And when it comes to EULER, it is expectable a big increment on its value due to the combination of:

A predictable big increment on the value of the product as it reaches maturity.
A big decrease of the circulating EULERs due to premium tier payments.
An organic tendency of the token to become more scarce (because transactions burn tokens).

This analysis is not even taking in account the fact that euler.tools is in conversations with several exchanges and blockchain services to sell their proprietary APIs:
The irruption of several companies aiming to gather enough EULERs to pay for contracts ranging from five to six figures in USD would generate massive (albeit unpredictable at this moment) explosions in the EULER price.

What’s going on now?

If you’ve read until this point, you may be asking:
“If it’s so predictable that EULER will become more valuable, and so many of them are being burned as we speak, why aren’t we seeing the price go to the moon, and rather it’s fluctuating around $0.15 USD?”.

That’s a great question, and I’m glad you asked.

The answer it’s a combination of factors, primarily:

Liquidity Mining: As you know, in order to ensure that the exchange has enough liquidity, traders that stack their EULERs for that purpose receive more EULERs as a reward.
This means that during April 2021, there’s a huge amount of EULERS being injected in the system (20M, which means 33% of the 60M that are not owned by euler.tools).
With so many EULERs being added, the fact that the price is able to remain relatively stable means, in fact, a strong uptrend.
Big investors have noticed BNB is rising: As you also know, at the moment Euler is currently only swappable by BNB (Binance Coin).
The situation is that BNB is now having a huge growth: From March 25 to April 10 of 2021, the value of BNB has doubled. In less than a month.
In comparison, EULER (which is expected to grow in some weeks with the release of the MVP) is now in a phase of stability and even small decay until then.
As a consequence, what we have seen is several big EULER investors swapping their EULER for BNB, knowing that — assuming that BNB keeps on growing — they will be able to trade them back for even more EULERs than what they currently own.
Of course, that many EULER entering the exchange generates a drop in the price, (although we’re already seeing a comeback, because many investors are seeing a fantastic opportunity to enter into EULER now that the price is low).
It’s important to understand that this drop doesn’t answer a decrease in the potential of the euler.tools project, and doesn’t harm it’s potential to grow later on.
If anything, the fact that BNB and the Binance ecosystem as a whole is having such a big growth is in fact contributing to the growth of the EULER, for it makes its services more demanded than ever.
Also, those big trades burn a lot of EULERs, which increase the scarcity of the token, and will help it rise faster when the moment arrives.
But BNB rising is good for EULER too: And all these effects are also regularly compensated by the entrance of more investors interested about Euler.Tools, since it’s potential value increases a lot together with Binance Smart Chain (the first objective of Euler.Tools is to be an oracle for BSC, so it’s more valuable if BSC grows).

The value of the EULER token is important for euler.tools because we want to keep those that invested on it happy while we progress to our release milestone, but we don’t need to trade our tokens to fund our development costs (we raised enough cash from the Wault launch to maintain ourselves, at least for the foreseeable future).

We remain 100% focused on developing a great product, with the milestone of releasing our MVP version as soon as possible.
Because having a great product is what will make the EULER price skyrocket.

WebSite: https://euler.tools/

Twitter: https://twitter.com/eulertools

GitHub: https://github.com/eulertools

Telegram: https://t.me/eulertools

Medium: https://medium.com/@euler.tools

Author

Bitcointalk username: Tomohoon

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