Will There Be a FAN Token Shortage?

I think there’s a very real chance that sometime during the first year or two of the FCFL (if not several times), there will be a severe shortage of tokens available for sale.  If that happens, the end result would obviously be a very sharp rise in the price of FAN tokens.

This shortage would stem from two high-level causes: limited supply and a high level of demand.  That probably seems a bit too obvious, so let me elaborate.

The total supply of tokens will be limited to those created as part of the initial $50m hard-capped token sale.  Assuming a $0.01 per token sale price (which is what the FCFL has indicated will be the approximate price), then there will be 5b tokens and no more will be created in the future.

Like all cryptocurrencies, many of these tokens will be bought by speculators, and if the price of the tokens begins to rise post-ICO, then even more speculators will be drawn to them.

Unlike other tokens, FAN tokens will have the great advantage of being extremely useful.  Anyone wishing to participate in running an FCFL team, earning FCFL experiences or winning cash prizes from the FCFL will need tokens.  Crucially, the degree of voting power and ability to participate in other ways will be proportional to the number of tokens held.  No matter how many tokens an individual holds already, there will always be incentive to continue acquiring more tokens.  With a large proportion of tokens likely to be already held and locked by other fans, each new purchase will contribute to pushing the price higher.

In addition, while there may be a seasonal drop in price at the end of the FCFL’s first season, each new sport which adds a league on the FAN Token platform will use the same tokens, and no new tokens will be issued.  This means that there will be increasing competition for tokens as new sports are added.

I would expect at least three big surges in FAN token demand (and price).  The first will be immediately after the initial token sale as users begin to have the opportunity to use tokens.  The second will be immediately before the start of the first season of FCFL play as users become desperate to increase their involvement in running the team of their choice.  And the third would happen once a second league launch approaches.