Introduction
There is a lot of talk right now about the strange EOS token distribution model that started yesterday. For those of you who have no idea what EOS is, please read EOS vs. Ethereum for Dummies! So I imagine that a lot of people came up with strategies in order to figure out how to get their hand on the maximum amount of EOS token as possible this year. This article is outlining what is my personal strategy for doing so.
But First, Why Would I Want EOS Token?
Because EOS token functions very differently then other tokens. On EOS, just like on STEEM, there will no transaction fees...but in order for app developers to have bandwidth on the network, they will require to have a certain amount EOS tokens, kind of like hosting on the Amazon Web Services hosting.
They will have 2 choices at this point:
1- Either BUY EOS tokens or
2- Rent EOS tokens
I particularly like the second option that gives the EOS holder the possibility to monetize it's holding without having to sell. If someone has 1% of the EOS token, he literally has 1% of the bandwidth of the network. That should make your head spin.
My Strategy To Acquire EOS Tokens
My first thought was that I could try to time the market by waiting at the last minute of any day in order to jump on the majority of the 2 Million Tokens distributed daily.
But I thought about doing this and then two things came to mind
1- Once Bitfinex launches EOS tokens on their exchange, people will setup bots to buy EOS at the market price on the eos.io/distribution and therefore a market price will emerge where people would not buy higher than on the exchange
2- Timing the market everyday for a year is too much work for me
I chose to go toward a Ether-Cost-Averaging strategy
So I simply decided that I will be buy EOS tokens everyday at a constant ETH rate for a year. With the recent dip, I'll make sure to replenish on ETH and then dedicate a fix amount daily to acquire EOS for the next 350 windows.
It's exactly like dollar-cost-averaging but with ETH
Dollar-cost averaging (DCA) is an investment technique of buying a fixed dollar amount of a particular investment on a regular schedule, regardless of the share price. The investor purchases more shares when prices are low and fewer shares when prices are high. The premise is that DCA lowers the average share cost over time, increasing the opportunity to profit. The DCA technique does not guarantee that an investor won't lose money on investments. Rather, it is meant to allow investment over time instead of investment as a lump sum.
Read more: Dollar-Cost Averaging (DCA) http://www.investopedia.com/terms/d/dollarcostaveraging.asp#ixzz4lCidNjj5
Why?
I personally don't believe that I am any good at timing the market. I get in project when I see an opportunity but I am terrible at timing the market. I mean...really terrible.
Acquiring EOS on a daily schedule over a long period of time is the way to go because I believe this platform will be big in 3 to 5 years. There will be highs and lows but over time a long period of time, the investment that I made in the first year of distribution will pay off, I'm fairly confident of that.
What is Your Strategy?
Please comment below and let me know what is your personal strategy to acquire EOS tokens. I'm sure there are smarter ways to go about it and I'm curious to know what other people are scheming!
I wrote a script last night you can use in your browser for calculating the price of EOS per ICO window.
This. Is. Huge.
I've been seeing people rent out their Steem Power lately, and I didn't put 2 and 2 together to think about how much this will happen with EOS. Brilliant!
How could you rent out your SP?
SP can be delegated to others (I think it requires cli_wallet to do it) and some are charging a rental fee to delegate their SP. Search around and you should be able to find some articles on it.
Or you can use Vessel wallet by @jesta
https://steemit.com/steem-project/@jesta/vessel-006-steem-power-delegation
I will ta!!
I'm doing the same thing, it's the only strategy that makes sense to me really.
You could try to find the window where EOS would cost the least. However, then you're actually timing two markets! The EOS market and the Ether market.
Seems to me like the best bet is to determine how much you want to put in this ICO. Then buy one fifth of those Ethers over the next few days and put them in the first window.
After that, I would only participate once a week instead of daily, do to transaction cost and time investment. Cost average the buying of Ether during the week and then put them in the ICO window on Sunday for example.
it's probably even smarter than what I did :-)
Are you only planning on using dollar cost averaging on your EOS purchasing? I really think there's value in doing the same for Ether too. If you pull op Ether's price chart you can see how volatile the price has been the last few months.
I'm personally not interested in Ethereum to be honest...I am only using it has a bridge to own EOS.
Same for me. But the fact remains that you need to buy Ether in order to get EOS. So for the purchasing of Ether you have a couple of options:
Buying a lot of Ether now doesn't seem attractive to me. Although we just saw a steep decline I still feel like Ether is quite expensive at the moment.
Trying to time the market to buy as much Ether as possible... A no go for me. I don't think that I can time the market.
So I will dollar cost average my purchase of Ether.
I like your point @beordo. Do you think ETH is still expensive or would you buy some at this point? (Its been two weeks since your post and the cost has dropped by about $40)
I am a true believer of DAPPS and EOS, Steemit and Bitshares and proving the way.
I look forward to hearing your thoughts! Cheers.
What I think about the current price of Ether is totally irrelevant. I strongly believe that I'm not able to time the market. I can't predict if Ether (or any other crypto for that matter) will rise or fall in the near future.
Once you believe that, the only prudent option is to dollar cost average your purchase of Ether.
I actually will use this strategy, although i decided independently on reading your post.
This EOS token seems like the next big thing... Should i buy some?
Fer sherbert
I made a mistake to put some considerable amount in the round 0. Price is going to drop a bit after this round. From now on I expect to buy or pass few mins before closing since it's the best way to avoid loss due to volatility.
I have writen about this in comments, but soon will make at least ten posts about crypto trading and investing. Follow me and expend your knowledge.
following and looking forward to your series
Cant wait
Dilution of the token is a foregone conclusion with token released everyday and trading occurring at the same time on exchanges. Is it therefore wise to lock-in your ETH for one year before you know the actual price? The ICO maybe the first of its kind and the last of it kind. There is just too much uncertainties to buy in the ICO than on an exchange.
Having said that the flip side is there is not many participationing in the ICO which will result in more distributiom of the tokens to those who have participated. So maybe the strategy is to hold off on buyng until the last few days/weeks to get a picture of price v distribution.
somehow, that seems more risky...what if I missed out the whole time? What if ETH is $1000 by then? I rather play with the knowledge that I have now and then have a path to accumulate in the rising tide or the constant depression than waiting last minute.
I think the ESO ICO is playing with people FOMO. There are to many what ifs scenario in this ICO. It would be good to see who's strategy wins out at the end of the year.
for sure. It's a tough nut to crack
you can calculate the price eos based on my post
https://steemit.com/eos/@vegeto/formula-to-calculate-price-of-eos
wise words
I haven't brought any EOS tokens yet. I'm hoping it will do well, just like Ethereum. With all the corporate backing with Ethereum, I'm not sure if EOS will be as successful as Ethereum. I do like the fact that EOS doesn't charge any transaction fees, so that is a big plus. The renting factors bring in a different elements altogether.
waw nice topic !! keep your great job ;)
I'll wait to to see how the market reacts to EOS on July 1st when they are added to the exchange
I think it's safe to wait in the month of July and see if the market moves
I think it will be quite difficult making good return from EOS. They will be issuing tokens everyday for the entire year. That would mean diluting the value of tokens everyday. They need large number of additional buyers everyday to just keep the price stable. I won't be entering into EOS early. I think investing in Steem would make better returns
They've already set the max number of tokens to 1billion and its a known fact, so there's no dilution. EOS might have a better price later probably.
The whole thing about the site down is what worries me, although its not gonna stop me. I feel that no method is full proof. No matter what, there are going to be risks to be taken. Question is, how big are those risks? Looking at what's going on right now - looks like there's some kind with huge withdrawal process going on with the world and this is an opportunity for new money. To make sure there's less downtime for private investments, I would say to make profit of this market down and work a ratio out to start on EOS. This way you're buying consistently and risking less through gains on the current situation if that makes any sense. Cheers!
#follow4follow
there are people who are DDOS ethereum and the EOS website hoping for people to be scared away from the sale, "don't play their game" is my moto.
Timing the crypto market is a fool's errand for me, at this point in time, I do what I can to get EOS token with my means and the knowledge of the moment while keeping in my the wise words of Tyler Durden.
Stay strong mate. This storm will pass too. Stick with the things you've given thought to.
Why would they do that? To get a bigger amount of EOS tokens or because of something I currently still can't get.
The dollar averaging method is the best method to even out the ups and downs and is best suited for people who simply don't have time to watch the market or simply have bad market timing (that's me). So I too have been using this method to buy my cryptos for the last few months. The current dip is just another chance to buy low and even out the highs of the last few weeks. So this is a great strategty. Thanks for sharing and confirming that I am doing at least a couple of things right. It is people like you who bother to share with everyone that make steemit a great place. Followed and upvoted you. Thanks
I think EOS has potential to scale really big because of the way it is setup with no transaction fees.
One thing though, how can US residents get their hands on EOS tokens? I know there are VPNs but i'd imagine then you could get into legal issues. Any ideas?
Upvoted you mate!
It's a bit hard with their site down for 24 hours so far lol I hope they get their act together
it's up
Yep just checked and they are up they weren't for the last few hours and I did tweet them earlier! Thank goodness! Happy shopping lol
weird, I haven't had this issue. It was only down for the first hour for me.
Wow I'm not sure what's going on I can't even get them on my phone as well as my pc even now
This is a very interesting take on the subject, I have never thought of this approach. I think it could be tweaked to optimize potential gains but the method seems safe :)
I am not sure, but I think there is no need to take care on timing.
In the example given on the EOS site:
20 EOS Tokens are available during a period.
Bob contributes 4 ETH and Alice contributes 1 ETH during the period.
As a total of 5 ETH were contributed for 20 EOS Tokens during the period, 1 EOS
Token will be distributed for every 0.25 ETH contributed. Therefore, Bob receives
16 EOS Tokens and Alice receives 4 EOS Tokens.
regardless of timing of purchase, the number of tokens you get is calculated after end of each period. And the ETH price in BTC or $ seems also not relevant.
the price EOS/ETH price will be relevant because it will be traded on bitfinex and people will arbitrage and there will be a market price that will emerge on the internal distribution system.
you can calculate the price eos based on my post
https://steemit.com/eos/@vegeto/formula-to-calculate-price-of-eos
Renting kinda hard to get my head around. I used Hzn Nxt clone where you could lend out for interest with no counter party risk but this eventually got removed not sure why. EOS seems to be whale/large holders focused on both options when in itself is no bad thing but counts me out. Just gone to trade it when released.
why would it be focused on whale/large holders? You can still hodl and profit from that.
Hiya, Trading agreed doesn't really matter, but for renting smaller amounts unless they allow some sort of combining option i don't see it working. Hope im wrong tho.
Pool will be formed, I'm sure.
yeah pool's work might need to be at least partially centralized hopefully no counter party risk. I might be thinking about this the wrong way sorry if i am.
I dont know if you're familiar with the waves lease model. Basically you're leasing your waves to a node and get back a % of profits. It is riskfree as your tokens never leave your wallet. I am leasing all of my tokens and it's not a large amount; if I would have a larger amount I would still get the same return, percentage wise. Now, if I understand it right, eos would do a similar thing.
yeah some smart solution like this,
been in crpyto for a while but don't have the time to keep updated on everything
Most ways of going big on any offering have varying degrees of risk, at least with DCA, you can reverse the process easier with less risk as well.
Very nice article. I am still struggling if i buy r not. Just started one month ago with first crypto.. Only small amount I could miss.. I was terrified that BTC would go down, but i decided to go for it and then I had my first BTC.. a few day later there was my first mistake.. bought XRP at ATH... now it's down 100%.. so I have a little bit spare to invest.. EOS is on my list but don't know if it would be wise to only invest a little bit.. You get crazy reading all these ico's.. what do you think if you could buy only 1 time? Shall I do it?
I would focus on steem if I were you. Get as much SteemPower as possible and then when you have a good revenue stream, start to diversify.
Thank you, but is 0.5 BTC enough for some steempower? Does it help me a lot. I really want to do my best and make quality comments.
i will be watching and learning from those who know what they are doing -- probably get in a little late but before most
Hi @cryptoctopus, I just want to have your attention for a petition about the acceptance of Bitcoin and Litecoin at Amazon, as can be seen in the link below. If we can take care of this, the crypto market will become much bigger and will be taken serious. Please take a look and share it to make this big. I know Amazon is one of the biggest companies out there but if we can collect thousands of signatures we will give a serious sign for acceptance. I if you don’t like the promotion of this petition please give me a call and I will remove it. I just want to make this big. Thanks in advance.
https://steemit.com/crypto-news/@unknowncrypto/amazon-a-big-step-for-crypto-acceptance
will be looking it up. Thanks
My strategy ?!
I guess mine would be to read up on cryptocurrency and trading in general before I even think of buying anything ... So while I have no authority to comment on your strategy, it does sound like a nice one nonetheless.
I am just a newcomer, I can only follow you brother, and thank you very much for sharing your experience and information, hopefully you find the answer from your question.
EOS seems like it starting to become bigger and it is probably a good time to invest in it than regret it haha.
If there are no better suggestions, I may have to follow the one you have posts since it sounds pretty reasonable.
Thanks
exactly the same. I will choose 1 day in a month every month to buy over the course of next 12 month
Very good information and creative thinking !
I prefer to choose 1 day in a month and every month to buy some tokens.
I most likely won't be able to buy everyday (man you must be liquid) but every month part of my salary goes to STEEM, EOS and BTS.
Somehow the distribution lasts too long, no? A whole year ... I'm scared that after this the price will drop sharply, as there will be too many coins.
this is why you cost average the whole process
@cryptoctopus: Haven't own any EOS tokens yet. Hoping it will do well, like BTC, ETH.
couldn't buy it yet, because confused if the price will rise over time or not, but I liked your strategy, if the price will go down you can balance the loss buying with a lower price, if it will go up then still you already bought from a lower price and eventually your strategy lowers the risk
Thanks for the info, I have been doing research on EOS and this post cleared up a few things for me. Much appreciated I am now following Cheerz
My strategy is simple, just invest little "seed" captital to different coins and see which one becomes a big tree🌲 in the future. :P
Nice plan. I'm not acquiring this coin, but I wish you luck...
Thanks for the upvote @cryptoctopus am now following you...
Distinguished Friend
With the market right now, I think it's wise ( my opinion) to wait for segwit2x implementation ... Anyhow thank you for the information ..
I think we should wait a little bit and then decide, its to unstable at this moment
@cryptoctopus Thanks!
I'm learning as rapidly as I can for a 11th day minnow with no previous interest into cryptocurrencies. If a spare server is put to use for dedicated mining could be a strategy.
So do you fret over timing or missed timings?
Must agree with you on the cost average strategy - spreading the risk evenly then too. Wishing you all the best with this. Let us know how it pans out hey ;)
interesting post, thanks for sharing.
Loved the article. Followed and look forward to seeing more of your content. :)
For people like me, the 'scheming' is reading posts like yours and learning by following people with more experience.
Today, I've finally figured out how to purchase the tokens with MyEtherWallet. I've used few SBD, converted them to ETH on Blocktrades and made a small transaction in the wallet.
So, my own strategy would be buying EOS with SBD on a regular basis. Basically the strategy is imitating 'Ether-Cost-Averaging' with the difference that I don't own ETH.
For heavy duty cryptocurrency investors that firmly believe in EOS' bright future, a nice strategy to follow is re-investing profits from cruptocurrency trading in EOS tokens. This is rather a conclusion based on theoretical thinking.
This is a great strategy. You buy more in the bear market and get leas in the bull, but you are disconnecting the pressure of the market from your decision. This is smart if your EOS play is a long term plan.
I'm going with same strategy, think i will invest a random day each week, instead of everyday for convience
Thanks for the help and advice
I'm the same way with precious metals.. after buying in a few times and the price crashing way below my initial purchase point.. I started buying in small increments more often, instead of big purchases.
Nice Work
wow! Really useful article
Resteem+upvote+follow
Just Got 300+ Followe within 20 Days. Hope get an UPVOTE from you. Your Upvote will motivate me to Steeming!
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