Token split proves to be an exciting addition to the ever-evolving cryptocurrency space. The concept shows similarities to corporate stock splits, attracting attention from new investors. In addition, it is a good way for projects to increase their market capitalization and improve overall liquidity.
Token Splits Are The New Paradigm
There is a similar trend in the cryptocurrency world, known as a token split. While it is not a standard method yet, some intriguing examples are. For instance, Polkadot's DOT token noted a price increase by over 100% in the days after its 1:100 token split. Moreover, the individual price of DOT increased by 800% in the first half of 2021, confirming there is a benefit to using such a concept.
Decentral Games, a metaverse and play-to-earn platform is the most recent project to introduce a token split. The team consulted the community first through a referendum regarding the 1:1000 token split. Over 99.5% of all $DG holders voted in favor of the split. It will not affect the market capitalization of Decentral Games or the market value of the $DG asset. Although a $500 $DG token will be worth $0.50 after the token split, investors will see the number of tokens they hold increase to maintain the same portfolio value.
There are several benefits to performing such a token split. The price per $DG token will become a lot more affordable for mainstream adoptions, it also makes working toward a future price increase more straightforward. Additionally, the split will provide a better token distribution for governance purposes, creating a more democratic and decentralized decision-making process. One has to consider Decentral Games opted for a 1 million $DG token supply, which is very low. Splitting the tokens makes sense, given how other gaming-related tokens are set up.
An Overall Boost For Decentral Games
Decentral Games CEO and Founder Anthony Miles comments:
A second remark show Decentral Games communicated their plan rather well. As over 99.5% of $DG (https://coinmarketcap.com/currencies/decentral-games/) holders vote in favor, investors have little to no confusion. Getting the message across correctly and concisely is crucial when dealing with novel concepts like token splits. Moreover, there is a chance this decision will have a price impact at some point. NFT Technology CBO Jason Fernandes weighs in:
"A token split, when coupled with the correct messaging, will almost always result in a price uptick in the medium to long term. In gaming, particularly, a token split makes sense because gamers tend to think in terms of whole tokens as opposed to fractions. In DG's case, their price will be at around $0.50+ right after the split, and old school gamers who remember dropping quarters in arcade machines as kids will find that price particularly nostalgia-inducing."
A Tried And Tested Concept
Quantum (NASDAQ:QMCO) Economics Founder and CEO Mati Greenspan adds:
Following the $DG token split, there is more potential to 20x or more, per Jason Fernandes. In his opinion, lower-value tokens are less burdened by psychological factors. As a result, anything priced in cents or a handful of dollars will often display a higher potential for price growth. The $DG token will become more accessible and benefit from greater marketability and liquidity after the 1:1000 token redenomination on November 23, 2021.