What does it matter what the market cap is reported at? Why the obsession?
Because marketcap
is price.
Step 1. Imagine you were offered a 1000th share in a new Audi A3 for 8$. What would you do ?....you'd have no clue until you multiplied 8 x 1000 to determine what the seller valued their vehicle at, in this case $8000. The book value of an Audi A3 is $40k, so you'd conclude the deal was good and make the purchase.
That's a very simple case and works fine for physical goods with well established valued. Entirely different with stocks and cryptos and currencies.
Step 2. Now imagine there were actually 5000 shares and unknown to you the balance of 4000 were being sold to other buyers "under the counter". What would happen when this information became widely available ?
1. The value of the car would stay the same (Book value still = $40k)
2. The market (i.e. "you") would immediately revalue your unit share down by 80% to account for the newly reported unit liquidity
The supply of VERI tokens and their status is not a secret. Why is this an issue? Calculate the value however you want.
That's the recipe by which Veritaseum has gained such a high Token to Coin ratio at the moment.
How do you know how VERI owners, and more importantly, recent purchasers of VERI came to their decision/valuation? They have access to the same knowledge as all of us.
What swung your decision in each case was the marketcap of your asset (=price of the car). That's the only handle you had in each case on the value of what you were being offered. You calculated that in the first case you were being offered an asset at below market price, in the second case you were being offered an asset above market price.
Every investor values things differently. Even your car example, some investors might value it at $38k, others at $42k, just ask any car dealer. What leads investors to purchase shares of stock every day is the determination that a particular stock is undervalued by the market and thus worth buying.
Just because VERI buyers see something you don't doesn't mean they are wrong. I apparently value the "keys to the Internet" much higher than you do. Time will determine if I'm right.
This is why Ethereum blockchain issuers do this trick of "holding back" tokens. It's nothing to do with garnering network effect and everything to do with passing risk from the issuer to the investor because the issuer is left holding all the capital while the investor is left holding bags of worthless tokens that took the issuer about 2 minutes to create.
And your point is ? If you don't like the offering structure, don't participate. Hundreds of thousands of ICO participants feel differently than you. If they didn't, these ICOs wouldn't be successful. Again, it doesn't make them wrong or you right, but you can't deny the success of these ICOs. You can call the investors stupid for seeing things differently than you do, but so far most of them are making out really well.
Do you advocate this strongly against Tesla stock, the company that has never really made any profit, trying to save those investors from themselves too? Are you short Maybe people invest in Tesla or VERI because they see value where others like you don't. Sometimes maybe it makes sense (and tons of money) to use a valuation scheme other than the academic version you are so familiar with. I don't see the value in Tesla stock so I am not a buyer any time soon, but plenty of people disagree with me.
In a classic equity exchange this doesn't happen, because your invested capital is held by the company in which you own shares, so your shares are worth something even if the entrepreneurial idea is crap. In token investments however you don't get squat of the issuers equity, just a bunch of tokens backed by a few lines of code.
Equity in a crappy company isn't going to be worth much either.
Perhaps crypto currencies aren't the right investment for you. Why are you here? Some personal goal to save VERI forum readers from making what you believe to be a bad decision?
