What is the TRIP Token
TRIP is a loyalty reward token which can be earned by guests for staying and utilizing various facilities in the hotels that are part of the Trippki ecosystem. The TRIP tokens can be redeemed at any hotel in this ecosystem to contribute towards the cost of accommodation or ancilliary goods and services purchased within the hotel. TRIP tokens will be traded on secondary exchanges, which is the mechanism to facilitate the circulation of TRIP around the ecosystem. As such, TRIP is a utility token because it is used (earned, redeemed and to build up guest reputation) by participants within the ecosystem, although it also has the characteristics of a currency token because it can also be used to exchange value – therefore a fully flexible loyalty reward.
The fundamental purpose of TRIP is to provide a utility mechanism that underpins the incentive ecosystem designed to offer a differentiated booking model to enable the sharing of value between the guest and the hotel. I know that’s a mouthful but what it means is that Trippki can compete with other on-line travel agents by offering a very small platform fee to hotels and a fully flexible valuable reward to guests.
TRIP Token Supply and Demand
The value of the TRIP token will be solely driven by the laws of market supply and demand. Since the overall supply of TRIP is fixed at 200 million tokens and never changes, the TRIP token price must increase provided the demand for the TRIP token increases. This is shown in the Supply and Demand chart below. We have a vertical supply curve because the quantity of TRIP tokens is fixed at 200 million. As we grow the ecosystem and demand for the quantity of TRIP increases the demand curve will shift outwards resulting in an increase in the price of TRIP.
TRIP Token Supply and Demand Chart at Steady State
The demand for TRIP tokens will likely be driven by a combination of i) participant demand – users who want to earn, redeem and exchange TRIP tokens in the ecosystem, and ii) speculation – users that believe in the future potential of the business model and believe that the price of TRIP will rise. This means that the value of the token should represent or be derived from the value of the ecosystem, i.e. the more hotels that offer the token and the more guests who use the token the greater the size and value of the ecosystem.
The chart shows the steady operation of the mature ecosystem whereby all 200 million tokens have been released into the market. We are selling 80 million trip tokens during the token sale which represents 40% of the total tokens that will be minted. We will reserve a further 80 million tokens in the vault to manage liquidity during the bootstrapping phase of the project. As the ecosystem grows the volume of tokens released from the vault will match the growth in the volume of hotels and users to the platform and will be issued at the average price of the latest market transactions. This means that theoretically the price of the token should not be negatively impacted by the changes in circulating supply as the ecosystem grows but remains consistent with normal laws of supply and demand.
Expected growth of the TRIP token price
The valuation of utility tokens and their respective ecosystems is a new and evolving science. We do not attempt to make any prediction on the future price of the Trip token. Our goal is to effectively manage those critical factors that will contribute to the rapid growth of the Trippki ecosystem, which will involve:
- completing the full scale system development and on-boarding of our first and second wave hotels by mid-2019;
- rapid scaling of the Trippki ecosystem (Link to previous blog), and
- developing affiliate and referral marketing strategies to drive customers to the Trippki booking platform (subject of future blog).