This is an important, complex answer and one that needs to be understood so we will do our best to break this down fully.
Just like XRP, when SVS switches chains to XRPL, SVS will become deflationary.
What does that mean?
For every transaction that uses SVS, a small portion of SVS will be burnt or destroyed meaning the total supply will reduce over time.
Additionally, currently the GTS platform takes a 1% fee on SVS deposits into the platform. We are considering using part of that fee on the new platform to burn and further reduce total supply.
Instant Aid Functionality
Our goal for charitable donations must enable ordinary people like us to donate easily and also ensure the enabling of substantial donations from large funds.
Instant Aid is in part a semi insular infrastructure, but it does have a real positive impact on volume, liquidity and price.
The process of this, and this is incredibly simplified with several steps taken out, puts SVS directly in the middle of all donations both large and small. To try and visualise this the process here is an example for a small donation:
- Example - $100 Donation made via Instant Aid on the GTS platform/app. XRP bookends SVS either side of this transaction. An API within the platform/app reaches out to an exchange to purchase SVS (XRP/SVS pairing) against XRP.
Now on larger donations this process has other steps. Every time a donation is made the read only element of the API that reaches out to the exchange checks liquidity - all the sell orders (ie those available to buy) to match against the donation amount. In this example $1mil USD.
- Fiat flows in, the Platform/App reaches out to available exchanges to check liquidity before triggering buy/s (multiple exchange buys can happen simultaneously.) The buying trigger will have a parameter to check the impact of buying at this volume compared to the price in order to prevent a + 25% spike in price. Volatility can be healthy but within boundaries. If this check (which is automatic and real time) returns a ‘yes’ - the impact on the market price would be less than +25% - it will trigger the buy.
- Alternatively if the impact is more than 25%, then a second action is triggered alongside the exchange buy.
- Example - $1mil of SVS needs to be purchased, but only $750,000 is below the 25% impact threshold. In that case an additional $250,000 worth of SVS will be purchased from a ‘floating treasury’.
- The ‘floating treasury’ is only to support Instant Aid. It will be open and real time, able to be tracked by anyone. This treasury exists purely to reduce volatility to acceptable levels. The burn facility will also be integrated with this floating treasury.
- The floating treasury will NOT be considered as circulating supply whilst not in use. Example, if 50million SVS tokens are required for an Instant Aid donation from the floating treasury, the circulating supply will be increased by 50million tokens, the moment any part of that is converted into another currency via the platform/app it’s taken back out of circulating supply and an internal burn implemented which further reduces Total Supply.
- All activity via Instant Aid will be tracked and the API will reflect volume impact.
For most shareholders, market cap or token price is the main focus. Having a strong and more importantly liquid asset, is key for being able to deliver our functionality. The current bear market does put a glass ceiling of sorts on what’s achievable in the short term.
We have seen the damage increasing total supply from hundreds of millions to trillions has on the price and market price when that is supply is immediately made available in circulation with the Terra project for example.
Increasing the total supply for Giving To Services is necessary to support Instant Aid, however, and this is important to understand, it’s NOT becoming circulating supply. It’s to reduce the impact of potential price spikes. Instant Aid, the swap function, exchange elements and the burn function all reach out to the exchanges to perform the buys needed. Only Instant Aid will use the floating treasury to reduce spike impacts. This will be fully open for everyone to see, track and work within the new regulatory framework.
We think the top 10 assets on the market right now are deeply undervalued and would like to see SVS with a fully diluted market cap of $25 billion once the market rebounds. Fully diluted means if all the projects tokens are available, which they wouldn’t ever be.
So at a $25 billion market cap for 50 billon tokens thats a fully diluted price of 50 cents per token. At the moment we are looking at 40 billion of those 50 billion tokens being assigned to the floating treasury.
Working on those figures there’d be 50 billion TOTAL supply, with around 80% of that taken out of circulating supply for the floating treasury for Instant Aid. Additionally, tokens that will be locked in staking elements of the platform/app would also be taken out of circulating supply ratified by a live API feed to market trackers (CoinGecko etc).
It’s worth noting that if over time it’s clear the floating treasury doesn’t need to be as large as 40 billion tokens then we will put it to a governance vote to burn the un-needed amount. Once again, the floating treasury is not to be considered as circulating supply. It’s only on hand to reduce price impact spikes and will be fully tracked transparently real time.