Warp Speed— Voyage(r) to the Cosmos

The new Voyager loyalty program is out, and it’s time to check our coordinates to see where we are headed. It’s been quite the journey since the very first Voyage(r) to the Cosmos article back on Dec 16th. Who doesn’t like 19 times your money in 2 months? The focus of the series (and updates) was and has been to educate on the potential of Voyager in the medium to long term. Now it’s time to examine how the new loyalty program potentially impacts the price.

Since I know many are new to my writing, let’s not forget that price is arbitrary and value is fundamental. At any point in time, price can be higher or lower than the value of the token. My Token Value & Investing article lays out how Metcalfe’s law is used to value a token and predict price over time. I recommend anyone new to the series read the article before continuing. Alright, let’s start by looking at the customer and holder value of the new loyalty program.

Customer & Holder Value

VGX is a utility token and for it to have real value, the customer has to get benefits from holding or using it. The really great thing about the new loyalty program is there are EIGHT benefits for holders. Customers also have 2 paths to level up, buying the coins outright or earning them. The cashback on trading, increase in referral rewards, and interest boosts are likely the biggest benefits for customers.

For any of you original Ethos ICO holders or strong hands that held throughout 2020, Friday was a glorious day. Your patience and perseverance was rewarded with real utility and value well into the future. Bravo!

Shareholder Value

What do shareholders get from this? They get an incentive program that incentivizes trading, referrals, and engagement on the platform without carrying a large balance sheet liability. More users translates to more AUM and ultimately more revenue. This will lower the customer acquisition costs and reduce the payback period for each new user. I would also argue this will increase the lifetime value of the customer.

The fact that the stock didn’t react to this news more positively, tells me equity holders don’t yet understand this program’s value. Equity holders are paying for the platform growth and market expansion and the token holders are paying for the customer acquisition and lifetime value. This is a dynamic combination that makes the company more valuable.

Pricing Components

Just like the grocery story, I put the milk and eggs in the back. Where does the pricing model say we are headed? The pricing model needs 3 inputs: Voyager funded accounts, Circulating Supply, and Token Efficiency. We will look at each individually.

Here is the updated flight path for customer funded accounts for the price prediction. It’s really difficult to project exponential growth but feel this is fair given the current trends. If you believe it will happen faster/slower or higher/lower, than the value and price of VGX would reflect those conditions.

Next is circulating supply. Again, it’s hard to project exactly how the allocation pool will be distributed per month so it is evenly distributed for this exercise. I also did not include the token burn after 1 year nor the token burn from transfers in the supply calculations. Current estimates show there could be between 5–10M tokens burned after 1 year where people have lost their keys.

The last and most important part is the token efficiency. From a pure supply and demand perspective, there just isn’t enough VGX to go around. Even basic math of using projected funded accounts and applying a % participation in each tier, the supply would completely run out very early this year. This doesn’t even consider the 20% locked up by whales and another 10% held by long term holders over 3 years. Based on this, I expect participation to be relatively exclusive.

Given the projected customer funded accounts, the token supply growth, and constrained supply, the equation says the expected token efficiency should be ~54%. This is the efficiency of each new user being added to the platform and their impact on VGX price. This is a complex formula and something a majority of people don’t care to understand. For those interested in the mathematics provided in this, I recommend you read RAOUL PAL: THE INCONVENIENT TRUTH ABOUT CRYPTO. I will share more on the math behind this in a later article specific to token efficiency.

Pricing Model

When you combine all these elements, you get the projected path. This model will look a little different than past models because it is now accounting for the increased supply from interest and allocation pool and the proportionality constant. I expect the path from $10–$30 to be largely linear along a current trajectory with then a tapering off that slows as funded accounts continue to grow. This is very similar to how BNB grew in 2017 and then exploded again this year as it hit another inflection point.

This leaves my 2021 VGX price prediction at somewhere between $40-$50. There are a lot of outside factors that could impact this number over the next 9 months, but using the best data available and the Metcalfe price prediction model, this is the math. The honest reality is as more people hold the token and receive interest, the price is forced higher as more users want the reward benefits. Come for the price appreciation and stay for the interest.

Closing Thoughts

There will be some that complain about the high minimums or compare certain aspects to other companies’ programs. For this to be successful, it doesn’t need be everything to all people. It can be an exclusive program that allows people to earn into. Voyager will continue to add and tweak the program to capture a large market share in the space. One thing is for certain, we know they will listen to their customers. This is how Steve and team set themselves apart.

Let’s not forget the 2021 roadmap. Market expansion into NY, Canada, and Europe. New products, including crypto to stocks, desktop roll out, debit cards, credit cards, and margin. There is a lot coming and we sometimes forget.

Lastly, price is personal to many of you and carries a lot of emotion in it. It’s you and your family’s financial freedom. Keep in mind, the model is math and certainly ISN’T financial advice. I will add that in investing, direction matters more than the destination. The direction is SIGNIFICANTLY higher from current levels.

Conclusion

The pricing model is predicting a $40-$50 VGX price target for the end of 2021. The new loyalty program is packed full of customer utility and value. Supply will limit the participation rate in the program forcing the token price higher as the company grows. Buckle up, and hold on tight- warp speed is about to commence on the Voyage(r) to the Cosmos.

Hope you enjoyed the series! If you like what you read, take the time to clap for the article below or like it on Twitter. If you have thoughts, feel free to add a comment below to the article or on Twitter.

If you are not a current Voyager customer and would like to start investing in crypto with Voyager, download the app and trade $100 to get $25 of free Bitcoin. Use code AFK8SG to claim your BTC

Disclosure: I am a current VGX token holder. This is not financial advice. This article is for informational purposes only. Do your own research or seek out the professional advice from a financial advisor.

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