Very disappointed to hear about the $500k airdrop in June
While it follows a PayPal-esque model (who famously bootstrapped by giving $10 each to new users)
Unfortunately it is completely misplaced in the token model & over the last 5 years I’ve watched probably >100 tokens attempt to apply the same flawed strategy.
In the PayPal example they had money set aside to fund the incentive. However if they were giving away $10 dollars each in shares of their relatively illiquid, low value start-up, they would have also lost the majority of their valuation & not attracted new users in the process. (The illusion is that at a $10 Million Cap you have $0.5 Mil to give away but unfortunately in illiquid start-up tokens, the buy support is not there and will completely evaporate as investors see the short term selling pressure from even $50k of airdrops. Nearly all tokens quickly stop airdrops tied to a specific dollar amount.)
In practice the airdrop will severely decrease the share price, thereby scaring away existing investors and supporters, while also not encouraging adoption as new users will quickly sell a dropping token. There are also active groups that target share drops for profit, so low customer conversion & there are also groups that successfully employ mass multi-accounting to game airdrops too.
At the current valuation your $500k June promotion is giving away circa 500k LOC (But the cost in LOC terms will rapidly increase as the LOC price decreases but you are still price fixed to $10)
A Customer acquisition strategy that does work is incentives for
a) making a purchase using the platform
b) holding the tokens medium to long term
c) NEVER price fix to a $ amount
Very quick but...
Alternative Promotion Every single day 10 random LOC customers will win 150 LOC Tokens Each!!
Conditions:
- You must have booked at least one night’s stay via the platform in the last year & you must have a balance of >$10 worth of LOC in your account at the time of the draw. (Every additional $10 worth of LOC you have in your account gives you another chance to win!)
COST: Circa 500k LOC per year
FOR INVESTORS:
Most existing investors would be rapidly converted to LOC customers & long term holders.
(A 500k LOC p.a promotion would be the equivalent of a 10-25% p.a return on LOC held long term assuming 2-5 Million LOC participating in the promotion.)
FOR CUSTOMERS:
A) Would be incentivized to make their first booking & maintain a small LOC balance.
B) Are incentivized to frequently visit the platform to check if they’ve won.
LOC Supply/Demand
TOKENOMICS 101: In a potentially high revenue token business, such as hotel bookings you should incentivize HODLing so your capital flows are driven through a lower circulating supply to maximize token appreciation as your user base and revenue grows.
I know you won’t change your existing promotion at this late stage due to a random post but hopefully you will know now to pull the plug when LOC inevitably rapidly drops >50%+. Good Luck
