On a positive trajectory over the last 24 hours and moving along with the general sentiment in the market, Polygon decentralize exchange (DEX) QuickSwap could boost its fundamentals. According to a recent announcement, the project could split its native governance token QUICK.
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Dubbed the “most important governance discussion to date” on the platform’s official social media channel, a fierce debate has taken place between Polygon users. This process is critical, and could precede a voting on the token split, depending on its result.
The main argument behind the proposal is supported by the potential expansion of the Polygon token, QUICK, supply. The project is currently planning changes on its tokenomics. A change in QUICK’s supply stands as the first and one of the most important.
If approve, the community will vote on possibly splitting the Polygon token on a 1:100 or 1:1,000 relation. The team behind QuickSwap clarified the following:
This would mean that for every 1 QUICK you now hold, you would hold 100 QUICK or 1000 QUICK after the split. QUICK’s maximum supply would increase from 1 million to 100 million or 1 billion.
The split would attempt to “open up” QuickSwap to new users, particularly those with intention to invest but that consider QUICK “too expensive” or with “small chances” of future appreciation. The proposal has managed to secure support from a portion of QUICK holders, others remain skeptical.
5/ One concern is that the split could be deemed a taxable event
We know how much dragons value their treasure & wouldn’t want you to part with yours
We aren’t tax experts & can’t give tax advice, but stock splits aren’t taxable events & token splits shouldn’t be either
— QuickSwap (@QuickswapDEX) March 5, 2022
QuickSwap’s Co-Founder Roc Zacharias commented the following on the potential implications of the token split on the DEX ecosystem, and its capacity to improve the platform’s components, such as its treasury:
If this split DOES work out like we think it might, it could strengthen the treasury (which is owned by all of you the community, it could increase reward value which can increase liquidity and indirectly volume etc, and most importantly, it can bring new users! Please think hard about this.
Polygon QuickSwap Token Split And The Polkadot Case
Many users, including the team behind the Polygon decentralize exchange platform, have compared this potential token split with the stock market. In the legacy financial system is “common” for companies to issue more stocks via a similar process addressing a concept called Unit Bias.
This idea indicates, as explained by the team behind QuickSwap, that an investors might be willing to own “more of a less scarce asset”. In the crypto industry, other projects have conducted token splits in the past often leading to price appreciation.
The team behind token swap mentioned Polkadot (DOT), as an example. Via their official Twitter handle, QuickSwap said:
(…) when Polkadot did a 1:100 redenomination, $DOT rose from a sub-100 market cap to the 7 position. More recently, Gains Network did a 1:1000 token split & migrated from GFARM2 to GNS. In dismal conditions, GNS did a 6x.
Remains to be seen if history will repeat itself with QUICK. However, Polygon, and second layer solution on Ethereum, seem to be attracting a lot of attention as they provide users with a cost efficient and more scalable gateway into the DeFi sector.
Today, https://t.co/Y7yxw3SzE7 published a piece analyzing $QUICK’s price
Wallet Investor suggested that QUICK could be worth $7.95 at year end
That’s eerily close to the $7.67 I calculated by averaging #DEX tokens
If QUICK did a 1:1000 token split & rose to $7.67, WWYD?
— NrdGrl007 (@nrdgrl007) March 7, 2022
Related Reading | TA: Ethereum Could Avoid a Major Downtrend if it Closes Above One Key Level
At the time of writing, Polygon (MATIC) trades at $1.43 with a 1.7% profit in the last day.
MATIC trends to the downside on the daily chart. Source: MATICUSDT Tradingview