Introduction - So What Are Seasonal Tokens?
Although a review of the official website for Seasonal Tokens is quite short in the area of informational content, it nonetheless provides a good description of the project as follows:
There are four tokens, Spring, Summer, Autumn, and Winter. They've been designed to rise in price relative to each other in a predictable sequence. Spring tokens will tend to rise in price, then Summer, Autumn, Winter, and Spring again.
The prices of the tokens relative to each other are driven by supply and demand. There's a supply from mining, and a demand from farming. Once every nine months, the rate of production of a token halves, and the cost of production doubles. It goes from being the cheapest to produce, to being the most expensive. Then it goes from being the least valuable for farming, to being the most valuable.
This combination of seasonal supply and seasonal demand provides the pressure on the prices of the tokens relative to each other that makes them increase in a predictable sequence. If you trade the tokens in a cycle, you'll end up with more than you started with.
[Seasonal Tokens. Home - Protect your funds and grow your wealth over time. (Accessed May 4, 2022)].
Or, to put it in simpler terms: the purpose of the Seasonal Tokens project is to allow investors to trade the tokens they hold for an additional quantity of tokens of a different type, continually increasing the total number of tokens in their investment.
What are the Benefits of Seasonal Tokens?
The benefits of Seasonal Tokens include:
- Successive Halvings: Investors may take advantage of the successive halvings so that they may always hold a token that will rise in price;
- Knowledge of When to Buy and Sell: Seasonal tokens were designed to allow its investors to know exactly when to buy and sell tokens;
- More Tokens Owned Over Time: By participating in cyclical trading of the tokens as contemplated by this mechanism, investors will experience an increase in the total number of tokens that they can own over time;
- Predictable Rises in Token Prices: The four seasonal tokens in the system have been designed to rise in price in a predictable repeating sequence;
- Minimization of Risk: By taking advantage of the seasonality in the system's cryptocurrency prices, investors rate of loss is minimized.
The tokens have been designed so that there’s always a difference between the way that the market currently prices the tokens relative to one another and their long-term value. Investors who think ahead can see the difference between prices today and prices in the future and this provides an opportunity to profit.
[HodlersHub. Seasonal Tokens: A Growing Cryptocurrency Project that Changes with the Seasons. (Accessed May 4, 2022)].
In Theory, How Does the Mechanism Work?
By reviewing this chart, the theoretical token prices based on rate and cost of production over time is depicted.
If an investor has Summer, Autumn or Winter tokens today, they can trade them for cheaper tokens and increase the total number of tokens in their investment....Later this year, after the rate of production of Spring is cut in half, Spring will become the most expensive to produce. The value of Spring tokens for farming will also increase correspondingly. When Spring is more expensive than the others, it will be possible to trade Spring tokens for more tokens of other types....In this way, investors can keep increasing the total number of tokens in the investment. The investment will increase in value even if the average dollar price of the tokens doesn’t change over time.
[Seasonal Tokens. Press Release - Do the economics of Seasonal Tokens work? The price charts tell the story. (Accessed May 4, 2022)].
Clearly this is novel to Seasonal Tokens. With Seasonal Tokens it is no longer necessary for the dollar price of the token to increase over time for the underlying investment to increase in value. This system endeavors to accomplish this by simply increasing the number of tokens held by the investor in a measured fashion.
Drum Roll Time - Do Seasonal Tokens Work as Projected?
"The project attempts to control the relative prices of the four tokens by controlling the supply from mining and the demand from farming. The tokens can bring value to investors that other projects can’t provide, but only if the market prices can really be controlled this way" [Seasonal Tokens, Press Release, supra].
This chart demonstrates the historical prices of the four Seasonal Tokens since the farming thereof began. Fluctuations in price are present, however, the prices rarely cross. Translated, this means the tokens are staying in their correct order. "The supply and demand from mining and farming affect each price, preventing the fluctuations from accumulating over time and turning into a random walk. Instead, the prices are staying close to the values that they should theoretically have based on the cost of production and the value of farming" [Id].
As these prices appear to be under control, it is a case of 'so far, so good' for Seasonal Tokens. The projects goal has so far been met in that investors can trade systems tokens today for more tokens.
What's Next for Seasonal Tokens
The next test of the token’s economics will happen in the second half of this year when Spring is anticipated to rise in price above the other tokens. If it rises as expected, then it will be clear that the relative market prices can not only be controlled to keep them in order but can also be made to oscillate around one another during the long term....This would mean that investors truly can continue to trade tokens for more tokens and keep increasing the number of tokens in their investments. It would also mean that investors can make an ongoing profit without risking losses measured in tokens or relying on an increase in the dollar price.
[Id].
Final Thoughts
While things seem to be evolving in a favorable light for Seasonal Tokens, in your author's humble opinion, it is much too early to issue a resounding endorsement of the project. Controlling the prices is one thing, but getting the prices to oscillate around one another to create the system's opportunity, is another.
While this novel project shows promise, it is just too soon to assess its overall chances for success. While I find this one extremely interesting, personally I am taking a 'wait and see' approach before making any investment in the project. Maybe after a few 'seasonal halvings' I will revisit this topic and reassess it's investment potential.
If you invest, you do so at your own risk, The foregoing in no way should be considered investment advice as it was presented for solely educational purposes. But should you decide to invest in Seasonal Tokens, please remember the cardinal rule - never invest more than you comfortably afford to lose.
Good luck.