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Financial Risks and Mitigations

Token Launch Liquidity

Estimated reading: 2 minutes

In the initial year following the token launch, the liquidity of MEDRE tokens may be limited due to several factors:

  • Limited Trading Volume: As a new token, MEDRE may experience lower trading volume on exchanges compared to more established cryptocurrencies, potentially making it more difficult for investors to buy or sell large amounts of tokens without significantly impacting the price.
  • Token Lock-ups: A significant portion of MEDRE tokens will be locked up for a certain period after the token sale, reducing the number of tokens available for trading in the open market and potentially limiting liquidity.
  • Market Sentiment: The overall sentiment towards the cryptocurrency market and the tokenized real estate sector can influence trading activity and liquidity. Negative market sentiment or uncertainty could lead to reduced trading volume and liquidity.

Mitigation

To mitigate the risk of limited liquidity in the initial years, MEDRE will:

Preventative Measures

  • Community Building: Foster a strong and engaged community of investors who believe in the long-term vision of the project and are committed to holding and staking their tokens. This can help reduce selling pressure and contribute to a more stable market.
  • Strategic Partnerships: Establish strategic partnerships with key players in the cryptocurrency and real estate industries to increase awareness and adoption of the MEDRE token, potentially leading to increased trading volume and liquidity.

Detective Measures

  • Liquidity Monitoring: Closely monitor the liquidity of MEDRE tokens on exchanges, tracking trading volume, order book depth, and price volatility. This will help identify any potential liquidity issues and enable MEDRE to take corrective action if needed.

Corrective Measures

  • Market Maker Engagement: Engage professional market makers to provide liquidity and ensure smooth trading of MEDRE tokens on exchanges, especially in the initial years when trading volume may be lower.
  • Liquidity Provision: Provide liquidity support on decentralized exchanges (DEXs) to facilitate trading and attract users to the MEDRE token.
  • Existing Community Incentives: Leverage the existing community incentives, such as airdrops and bonus rewards for long-term holders, to encourage holding and staking of MEDRE tokens, reducing selling pressure and contributing to market stability. Additionally, MEDRE will continuously explore and implement new incentives to further promote long-term holding and reward loyal token holders.

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