Frosendrop could be an effective airdrop alternative
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“Frozen” or blocked tokens are a new way to stimulate the development of a crypto project, while not collapsing the price of the coin itself. In fact, the smart contract used by the company blocks a certain portion of tokens in users’ wallets, preventing them from being moved or sold. This allows projects to avoid speculation with the price of coins during the launch phase. How the “frozen” economy works today, BeInCrypto discussed with Anti Danilevsky, CEO and founder of the KickEX cryptocurrency exchange.
– What is a “frozen token” As the use of cryptocurrencies increases, new types of tokens appear. They can represent value or something intangible like voices. Two … More ”and the frozen economy?
HELL .: It is a token that is created but cannot be transferred to another address until certain defrost conditions are met. Frozen tokens cannot be moved, and they can be unfrozen only after certain conditions are met, for example, within the framework of the frozendrop – a free distribution of tokens to everyone in a limited amount.
– How the token is frozen. Give an example of a smart contract that freezes a token.
HELL .: The freezing logic is embedded in the design of our KickToken smart contract. The token supports two sections of balances: liquid tokens – those that the user can freely dispose of and frozen balance – tokens that cannot be moved until conditions are met.
– How tokens are defrosted?
HELL .: Unfreezing is carried out automatically, using a smart contract or by a command that can be sent by the creator of the token (owner). A smart contract is a computer algorithm designed to generate, control and provide information. It is written once, it cannot be changed when it has already been published and posted on the web. No third party has the authority to change or tamper with it. Thus, the information in the smart contract is completely transparent and publicly available. A smart contract is a kind of ledger that records all transactions and user token balances.
Let me explain in more detail using the example of defrosting frozen KickTokens for those who received FrozenDrop in winter. The user trades on the KickEX exchange and pays a commission for the trade. By paying a commission of $ 1, for example, he unfreezes $ 0.5 of frozen tokens on his wallet. The user can sell these unfrozen tokens, use them on the exchange (cover future trading fees) or in our Kick Ecosystem. If he decides to sell KickToken, then we buy the tokens back ourselves or they are bought by other users or companies who need KickToken tokens for listing, trading, paying for services, etc..
– Why do you need to freeze tokens? For what purposes is this done?
HELL .: For example, a project is under development, but users want to buy its tokens in advance. It is reasonable to make them temporarily not tradable, but frozen. Thus, willing users will have coins, but their price will not begin to fall due to the lack of real demand before the launch of the project’s business model. Precisely due to the fact that unfrozen tokens were sold at the ICO, this phenomenon failed, and holes for speculation in the market were formed. The creators of ICO projects spent a significant part of the funds received from crowdsales to support the price of their tokens, trying to meet the expectations of ICO participants. At the same time, they invested very little money in the development of their products, which very quickly led to the collapse of projects. The only question is whether the ICO participants are ready to buy frozen tokens and wait for them to go public after the launch of the products. Freezing tokens for the period of development allows you to avoid negativity and unjustified expectations from the project participants.
In addition, the distribution of frozen tokens in the form of FrozenDrop can be aimed at popularizing a new coin or at the initial stage of its listing on a crypto exchange. To attract the attention of active crypto users and traders from all over the world to the project. This method of attracting customers is several times cheaper than contextual advertising, banners and the like. These are targeted and active market participants.
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– What tokens can be frozen?
HELL .: Freezing and frozen tokens can only be in the smart contract of the token, in which it is provided in advance.
– What are the advantages and risks of frozen tokens?
HELL .: Benefits: The era of speculative tokens is long gone. In such conditions, it is frosendrops that can be extremely useful for popularizing the token and forming a starting audience. Correct defrosting is the key to successfully applying both the frosendrop and the original token sale, if any..
Risks: if you send frozen tokens before they hit the exchanges and get a market valuation, then their distribution can be perceived as spam, and the token will be marked as “spam” in Etherscan (block explorer, service for viewing statistics of the Ethereum network) and other cryptocurrency directories.
Tokens that do not have a market price will be of no interest to recipients, since they do not understand whether it is a lot or a little..
Tokens that are already traded on the exchange have a market value, and when they receive them, users can understand how much they received. If it’s over $ 50, then it might work well. However, in this case, as mentioned earlier, there is a risk of a panic sale and a price dump.
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If the rate of defrosting exceeds the rate of income generation by the business, then the price will inevitably fall. But if the redemption is carried out faster than defrosting, then the token price will rise.
However, frozendrop, if implemented incorrectly, can cause enormous (possibly even critical) damage to the economy of the project and its reputation, and even to exchanges and holders of frozen tokens..
– How is the issue of frozen tokens carried out?
HELL .: The issue of new frozen tokens does not technically affect the price of those already traded, since new tokens cannot be sold. But additional emission can provoke a price decrease, because most current token holders do not understand the difference between frozen and non-frozen tokens. Therefore, a lot depends on the rules for defrosting..
At the same time, if a token is already traded on exchanges, it is important to make sure that the issue of frozen tokens will not be counted as an account replenishment. If this happens, then all participants will have problems: buyers will not be able to withdraw assets; exchanges will owe buyers; and the organizers will most likely have tokens from the exchanges.
– Thanks for the conversation!
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