Correlation Between The Transfers, Active Addresses and The Price
In this article, Recast1’s working principle and how is has been tested with the data derived from other projects. Recast1 operates on idea that transfer volume is the most important factor affecting the price and incentivize users to transfer more. By doing so, active user number and transfer volume consolidates at the same time. Though, this is related to the behaviors of the users.
So, what are the related examples?
TRX and LTC are consistent coins with an upward trend on the active addresses count and transaction volume charts.
LTC:Adjusted Transaction Volume
LTC:Active Addresses Count
TRX:Adjusted Transaction Volume
TRX:Active Addresses Count
TRX and LTC are great examples of the relation between price and transfer volume. As we can see on the graphs, price movements have been followed by transaction volume and active addresses count movements.
XLM, XRP, DOGE active addresses count has fluctuated but they still have significant number of active users.
XLM:Adjusted Transaction Volume
XLM:Active Addresses Count
XRP:Adjusted Transaction Volume
XRP:Active Addresses Count
DOGE:Adjusted Transaction Volume
DOGE:Active Addresses Count
Unless a change in the number of active wallets is accompanied by a change in the transfer volume, it is clear that the price is unaffected. This illustrates the discontinuity of the link between the amount of active wallets and price as a side note.
Below are the ranking by the number of active wallets shared on Messari.io and the ranking of the 20 most valuable coins shared on CoinMarketCap.
The reason why these two rankings differ is generally low fees and high speed.
The main difference between these two ranks is the low fees and high speed. Low costs (0-0.1 cents) and quick transfers attract a big audience, resulting in a surge in the number of active wallets for Tron, XLM, XRP, and DGB.
Tron, for example, is first in the first rank but 26th in the second. Stellar is now ranked 8th in the first ranking and 30th in the other rankings. DGB is ranked 20th in the first rank but 156th in the second. Given these findings, being inexpensive and fast increases the number of active wallets. The only thing left to do is to make it permanent.
Although the number of active wallets has a direct impact on the transfer volume, it has an indirect impact on the pricing.
The volume of transfers has the most obvious and direct impact on the pricing.
The number of active wallets or the volume of transactions have not been shown to be directly proportional to supply. However, none of these projects were found to be deflationary; in fact, even the ones that saw a 2-3 fold increase in supply backed up the notion.
All price swings are transient or artificial unless the rise in the number of active wallets is permanently reflected in the transfer volume.
Note: There is a deadlock on whether the price follows the transfer volume, or the transfer volume follows the price. There is no proven data of any situation. We liken this situation to the chicken-egg problem, it remains unclear who made the first impact.
So, how does Recast1 perform the process of perpetuating the number of active wallets?
Let 'x' be the number of transfers made for one hour. This number is different every hour (x1, x2, x3, .., xn) but there can be big differences between the number in hour x1 and the number in hour x2. To balance these numbers
By calculating xa=(x1+x2+x3+...+xn)/n
The average is obtained, and the incentive is applied for the hour after the contraction according to the number of 'xa' and the transfer number is again converged to the average.
Trading R1 on a DEX can be profitable, and trading R1/x can be profitable as well. The R1/x trading pair becomes more stable in other trading pairs when the number of users reaches a particular threshold.
As a result, the number of active wallets is maintained at a constant high level. At the same time, because this incentive will keep the transfer volume high, the price will rise in accordance with the data we've gathered, bringing the price into balance. As a result of this incentive mechanism, R1-Coin is a candidate to enter the top 20 in terms of active wallets.
Last modified 1yr ago