The Ravencoin asset layer launch was a beautiful example of what a decentralized open source movement looks like: chaos, excitement, uncertainty, and many helping hands. The entire community has been preparing for weeks for this event and was eager to register several asset names.
In just two weeks after the asset layer launch, over 10,000 Ravencoin asset names were already created. In contrast, there are currently only approximately 2,000 cryptocurrencies and tokens listed on CoinMarketCap. This asset creation boom resulted in the burning of a total of over 5 Million RVN. At the time of writing, that’s $150k gone, forever. What created this asset name creation frenzy?
Although its true that a decent chunk of the registrations was made by people actually wanting to use the asset names, like Assure Services who announced to have registered 700+ Ravencoin asset names, it is fair to assume that most assets that were created in the first days were generated by community members thinking they will be highly valuable in the future.
As an active member in the Ravencoin discord, I noticed that there were many misconceptions about why an asset name could hold value, and which might indeed hold A LOT of value.
1/ Dear #Ravencoin asset name speculators, in this thread I will dive into what the tokens you created are actually worth. $RVN
— Pascal Thellmann (@pascaltmn) November 10, 2018
So after creating a Twitter thread with my thoughts about the topic and gathering some feedback, I decided to go into more depth in an article.
One of the most common misconceptions I have seen in the Ravencoin community is that many people are drawing parallels between Ravencoin asset names and domain names.
If you visit AssetExplorer.com, you will see that most major brand names are taken. Although it’s true that some may be taken due to whitehat efforts from noble community members, there are also countless that have only been registered for speculation purposes, judging by the number of individuals trying to sell brand names on the Ravencoin Discord.
Ravencoin asset names are fundamentally different to domain names in the sense that Ravencoin asset names can theoretically be exclusively used on the back-end. An exchange could, for example, display the asset name “AMZN77CM” as “Amazon.com” or “AMZN” on the front-end. Hence, as Bruce Fenton already pointed out in several instances, there is simply no need for a corporation to spend a huge amount of money buying their brand name from an “asset name squatter”.
Therefore, the value of Ravencoin asset names representing brand names or companies will likely be very low.
On the topic of domain names, it’s important to note that an interesting application for Ravencoin may indeed be tokenizing domain names. The possibilities for a highly liquid domain market with fractional ownership are endless. However, as pointed out throughout this section, this does NOT make the asset name “CARS.COM” valuable, as the asset name “CARSCOMDOMAIN1” can do the job just as well.
All that being said, please don’t get me wrong. I don’t think that registering asset names that will likely never hold much value is a bad thing. I think it’s a great thing. People are interacting with the network, playing around with it, and in the process also burning RVN and making everyone else’s coins worth more.
Although, as we explored in the previous section, Ravencoin asset names can’t be valued in a similar fashion as domain names, there are indeed several asset name types/categories that may prove to be extremely valuable. This value will either come from a demand of the creation of sub-assets, its connection to an entrepreneurial effort, or from digital collectors.
Ravencoin asset names can be used to create sub-assets. However, in order to create a sub-asset, you need to own the asset or arrange a deal with the asset owner. Therefore, there may be a lot of demand for creating sub-assets with “vanity” asset names.
For example, VanEck could be interested in the sub-asset name “GOLD/GDX” for their Gold Miners ETF. Or Madison Capital could be interested in the sub-asset name “NEWYORK/71FIFTH” for their extremely valuable property in 71 Fifth Avenue, NY.
If there is demand for this, then the most valuable asset names will be vanity asset names that represent a valuable market that will likely be tokenized, and where there is demand for the creation of sub-assets.
The first asset generated on the Ravencoin blockchain was “VOTE”. I find this to be a great example for this section. Per se, the asset “VOTE” is not connected to any market, so there is not a “natural” demand for creating sub-assets on it.
However, if the asset is owned by a savvy entrepreneur, he can make that demand happen. The “VOTE” asset owner could convince companies, individuals, and potentially even Governments to create sub-assets like “VOTE/GERMANY”.
After the entrepreneur has generated enough momentum and there is a growing demand for creating sub-assets on his asset name, the asset name has now acquired value.
We may even see that after a certain threshold has been reached, the asset will continue growing in value by itself e.g. if most European countries have sub-assets on the VOTE token, the remaining countries may choose to do so as well, and then maybe Asia follows also because “Europe has already successfully implemented it”.
This example is just that, an example. I think it’s unlikely for global voting to happen under a single Ravencoin asset name. However, I think it is fair to assume that there is a non-zero chance that it’s possible to do something similar with other asset names or categories where it is easier to create adoption.
The last point I want to cover is Ravencoin asset names as a digital collectible. Digital scarcity is a powerful concept that we don’t fully grasp yet.
If there is demand from digital collectors for Ravencoin assets, then it will most likely be for asset names named after interesting dictionary words, even though they are not named after an important asset or market.
A few examples:
The Crypto Kitties craze last year has clearly shown us that digital collectibles should not be underestimated. Even with just a few million people actively involved in the cryptocurrency space, the most expensive Crypto Kitty sold for a whopping $170k.
How much would it have sold for if the cryptocurrency space was 20 times larger?
Finally, I also found an idea interesting that was brought to my attention by @mrtb_joe on Twitter. He suggests that short asset names could potentially be incredibly valuable as well. I haven’t put too much thought into this yet, so here’s the idea in the user’s own words:
I agree, a company can just use a random name and change on the on ramp/off ramps when using the chain. But in the long run, I think the most value in a name is one with 3 characters due to the 30 character limit. Then you can have the most sub names. abc/1/2/3/4/5 etc..
— mrtb_joe (@mrtb_joe) November 10, 2018
Asset names can currently only be traded on the Ravencoin Asset Exchange, which launched approximately 1 week after the Ravencoin asset layer went live. At the time of writing, there are approximately 30 assets listed, with prices ranging from as low as $1 up to $100,000. Due to the current lack of a large number of listings, and public record of trades that happened, it is hard to visualize the price trend of asset names and categories.
Listing an asset on the exchange is free and users can add the asset name, price, a picture, categories, and a description in their listing. The Ravencoin Asset Exchange is currently structured in a similar way to “Directory sites”, where users can post a listing, and potential buyers can get in touch with the owner of the listing. Although some may argue that the functionality of the exchange is still fairly limited, that is to be expected from a project that just launched and that is exploring if there is a market for its product.
It will be interesting to observe how Ravencoin asset exchanges evolve over time, and if they become an equally interesting business model as traditional cryptocurrency exchanges.
I’ll keep this short. In order to maximize the potential value of your asset, or the probability of it having value, please remember the following.
When creating a new asset, there is a checkbox that says “Make asset reissuable”. It is checked by default and if your plan is to sell the asset name then you should leave the asset reissuable. It the asset is created as NON-reissuable, then a potential buyer will never be able to create more assets.
At the time of writing, it is only possible to increase the total number of tokens in an asset. Decreasing the number is not possible currently. If your plan is to sell an asset name, don’t create billions of tokens since that may prove to be very inconvenient for a potential buyer.
I am very excited to watch how this article ages as Ravencoin grows both in network size and in adoption, and I will be updating it constantly with new learnings and new developments.
Let’s have a meaningful discussion in the comments. Please do share your opinion on how Ravencoin asset names can be valued and let me know if there is a certain topic that this article is missing.
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