Ferrum Network Stake and Earn long term investment, a look at the token supply, roadmap, progress
I’m not new at investing in Ferrurm Network, I started my investment in this project the last August during their ICO, I continued investing in order to average down my investment, I also stacked part of my tokens in their Social Mining platform in order to contribute to this small and awesome project and to get FRM tokens as rewards; finally I also participated to their first round of staking the last November 2019.
Ferrum Network already announced FRM Stake and Earn Program, it will be launched very soon, in a few weeks!
Shall I continue investing in Ferrum Network?
My first thought was “yeah great, I can stake again my tokens to get 85% rewards in 2 years!”, anyway I’d like also to diversify my portfolio in order to apply a risk management strategy.
I’m not a FOMO guy! So I did my own in-depth analysis to evaluate this long term investment. In the following analysis I’ll take into account the token supply, the project roadmap, and the project progress.
To analyze the supply of the token and how it will evolve, I took into consideration a 2 years timeframe (August 2019 — August 2021).
Some of the information I used is publicly reported in the Ferrum Network’s WhitePaper, some is my personal point of view and estimate; I apply some math in order to represent how the FRM token circulating supply will change and how the FRM token will be used during the 2 years timeframe.
For your simplicity here there is the FRM token release schedule:
- The amount of tokens (including staking rewards) locked in the staking 1.0 smart contracts are about 10.8 millions.
- Token release schedule: as reported in the WP, during the second year project, part of the tokens reserved for advisors, business development, marketing and network incentive pool will be released; let me assume a part of the token reserve will be also released; my estimate is that an average of about 6 million FRM will be released monthly during the second year project.
- On May 2020 (M10-M12 ) the latest, approximatively 2.7 million FRM will be unlocked because of the maturity date of the Gold staking pool.
- On November 2020 (M16-M18 ) the latest, approximatively 6.5 million FRM will be unlocked because of the maturity date of the Platinum staking pool.
- On May 2021 (M21-M24 ) the latest, approximatively 1.5 million FRM will be unlocked because of the maturity date of the Diamond staking pool.
- Social Mining is going very well, the number of community members is growing constantly, quality of contribution is improving! Social miners get FRM tokens as rewards for their valuable contribution to the ecosystem, and the more they stake in the platform, the more tokens they gain as rewards; participants have to stake and hold 5,000 FRM tokens to be eligible for payouts; the platform penalizes who moves the tokens from the wallet, so let’s me assume that participants have a long term vision and consider these tokens “locked”.
- At the time of staking 1.0, last November, part of the tokens staked in the Social Mining platform were moved in the staking pools, the amount of tokens staked in the platform decreased from 12–13 million to approximately 8 million, to come back in just a couple of months (now) at 12–13 million tokens staked. Probably this scenario will happen again during the upcoming staking, I suppose that the amount of tokens staked in Social Mining will stabilize at about 15 million in a couple months.
- Ferrum main net is scheduled to be released in Q2 this year as reported in the roadmap; to run properly it needs validator nodes running to secure the network and to confirm transactions. There are still no official information regarding validator nodes requirements, I’d like to estimate that approximately 1 million tokens as required to run a validator node: my expectation is to see 20–30 million tokens locked in the validator nodes by a couple of months after main net launch.
- FRM supply is deflationary, that means after main net launch, every transactions generated by the products running on top of the main net will burn 0.01 $ worth of FRM; this is an important aspect to take into account because FirstKudi is a product already adopted in Nigeria and its user base is growing in terms of both merchants and users. Also, the team is working hard to get licenses in other countries, Brazil one of the likely country. While adoption of the DApps running on top of the main net will grow, more tokens will be burned as gas to pay transactions.
- Ferrum Network established a partnership with the Staking-as-a-Service platform Honest Mining: through this partnership, Honest Mining will support FRM Staking in the FRM Stake and Earn program, and in all subsequent staking mechanisms. There will be a dedicated pool within FRM Stake and Earn program with 2.5 million FRM size.
The following chart represents how the Ferrum Network supply progresses in two years. Despite the scheduled monthly release of FRM tokens, and taking into account the “staked” supply, the resulting circulating supply should hit its low value in May-July 2020. I believe less supply in circulation means more chances for the token price to increase its value.
In the following chart you can see in May-July 2020, approximately 50% of the released supply should be staked. Also I guess the staked supply will stay at approximately 30% till July 2021.
Roadmap and development progress
The team released their updated roadmap some time ago; main milestones are in Q1, Q2 and Q3 this year:
- Q1 2020: Ferrum Stake and Earn Program
- Q1 2020: UniFyre wallet V0.1
- Q1 2020: Public Test-Net
- Q2 2020: Main-Net
- Q3 2020: Sub-Zero release
I believe these milestones can be totally achieved: Ferrum Stake and Earn Program will launch very soon; UniFyre wallet V0.1 is under beta testing right now; Public Test-Net is in progress. The team works non-stop. They are very engaged with the community in order to create awareness, they are doing AMA series. That’s the right way to promote the project and to do marketing: keeping in touch with the community.
- I don’t see unfavorable aspects investing in Ferrum and in its upcoming staking.
- Ferrum Stake and Earn offers the best rewards if compared with others projects’ staking program.
- There won’t be an inflationary side effect on the token because the staking pools are not so big, 5.3 million tokens rewards on top of a total pools size of 10 million tokens will be distributed during two years.
- High chances the uptrend will continue till Q2-Q3 because of the wallet and main net release.
My final thought is that investing in this long term staking program is worth it! It seems a very low risk investment to me. So I’ll take part also in the upcoming staking program, my final decision.
Mine is not a financial advice, it’s my point of view, it’s my money! Do always your research before investing, I only shared with you my perspective!
Ferrum Network Useful Links:
Social Mining Community platform: https://community.ferrum.network/
Bitcoin Talk: http://bitcointalk.ferrum.network