For the first two parts of this series, see the following links:
https://steemit.com/cryptocurrancy/@elcolossus/top-5-undervalued-cryptocurrencies
https://steemit.com/bitcoin/@elcolossus/5fpmig-top-5-undervalued-cryptocurrencies
3. Populous
What is it?
Populous (PPT) is an online platform that connects invoice sellers to invoice buyers hosted on the blockchain using Ethereum smart contracts. This enables the invoice buyers to receive interest on their invoice purchase while invoice sellers receive short-term cash flow. This decentralised platform aims to compete with the central banking system, where invoice factoring to small and medium enterprises (SMEs) accounts for almost 25% of central banking profits, with many estimating these profits into the trillions of dollars. Due to the exceptionally high insurance costs required to enter this market, which in many cases can exceed $1,000,000, the central banks have virtually no competition and can charge fees that typically range between 15 and 30% per invoice. Populous, through a peer-to-peer decentralised system, will be able to provide cash flow to SMEs around the world at significantly reduced rates compared to the legacy system. The exciting part of Populous is that PPT token holders can participate in the auctioning of invoices and can subsequently profit from the agreed interest rates once the invoice is paid, essentially taking the place of the central banking system. Invoices can be bought on the platform using the PPT token, where the market value of the token will be pegged 1 to 1 with the currency that the invoice is listed in. This conversion will create a “poken” that will be used for bidding and buying the invoices. The auction process within the Populous platform can be summarised as follows:
- The borrower registers and must be approved by Populous
- Based on the Z-Score formula for predicting bankruptcy and credit risk, the administrator of Populous approves or rejects the borrower’s invoice
- If approved, the invoice goes to auction on the Populous platform for a maximum of 1 day
- An individual or a group of investors bid on the invoice with pokens
- In a successful auction, the borrower receives the funds (pokens) from the winning investor or investing group
- When the borrower cashes the invoice, the money is sent to the Populous platform and the dividends are paid out to the investor or investing group in the form of pokens
- Investors can then withdraw the pokens and convert back to fiat, PPT, Ethereum or Bitcoin
Why is it undervalued?
Populous started out with a bang in July when all 41 million tokens pegged for circulation were sold in the pre-ICO phase. Excluding bonuses, the PPT tokens were sold for approximately $0.30 each. After the tokens initial release onto EtherDelta in early July, the price quickly peaked at $6.43 in early August. Since then, the token price has fallen steadily to $2.30 at the time of writing. Although it is not clear why the token value has waned, those speculating could conceive one or all of the following reasons:
- Price manipulation on EtherDelta by large volume token holders
- Inability to get PPT listed on large exchanges
- Fear, uncertainty and doubt (FUD) circulating in social media platforms
Although impossible to prove beyond reasonable doubt, there are indications of price manipulation on EtherDelta. Because of the low trading volume on the peer-to-peer exchange, large volume token holders can suppress the price by micro-selling in order to scoop up sell-offs by apprehensive token holders. If indeed the case, the price manipulation could be reduced if PPT were listed on larger exchanges, however despite several announcements promising to do this, PPT has, for some reason, not been listed. Despite the release of the alpha version of the platform in early August which demonstrated a viable concept, FUD persisted throughout the social media ecosystem. The current state of the crypto world is largely driven by speculation and any press release or GUI screenshot can result in rapid surges in market value, so one has to wonder why this is not the case for Populous.
What is the potential?
Unlike so many ICOs, the fundamental concept that underlies Populous predates widespread use of the decentralised blockchain. Founder Steve “Nico" Williams developed his invoice factoring system before he even knew of the existence of Bitcoin and understood blockchain technology. Enormous entry costs and arduous regulations in the UK prevented Populous from competing with the existing lending system. Utilising blockchain technology, Populous is establishing a more efficient and cost effective model to facilitate cash flow for businesses around world. A recent tweet from Williams may provide some insight into the imminent paradigm shift that may now be gaining the attention of the central banks.
Could this be the reason behind the ongoing FUD and possible price manipulation? It is not certain but what is, is the potential dividends that PPT token holders can make. The following table lists several scenarios which are mainly driven by the market price of PPT.
As shown in the above scenarios, the value of owning Populous is not just token market cap, although this would be expected to increase. In fact owning Populous means that you are buying into one of the most profitable business sectors in the world, invoice factoring. The beta version is slated to be released ahead of the original November deadline, which will be followed by the platform launch in December. One should not have to think too hard to realise that $2.50 PPT will not be around much longer. If you are a cryptocurrency investor looking for tokens that can provide a return through real world utility, look no further than Populous.
To be continued……….
No. 2
- Follow me on Twitter: (https://twitter.com/ColossusEl)