SMTs will increase the value of Steem by chitty

smt · @chitty · Oct 2 '17 (edited)

$20.30

SMTs will increase the value of Steem

![tradingtips.png](https://steemitimages.com/DQmXnrEDC3J3zT9q6aKfuRAxgmQSWpxNDFgHcDfbQiwcr9s/tradingtips.png)

This post is aimed at speculators and traders. There are no romantic theories of how SMTs can change the world, is just simple math on why the price of Steem should increase.

## Why will SMTs increase the price of Steem?

To answer this question, we need to look at the concept of “Automated Market Makers”:

> “Automated Market Makers are smart contracts, largely based on the Bancor Protocol [2], that may be constructed during the initial ICO setup of an SMT for providing perpetual liquidity to an SMT community.” [SMT White Paper](https://smt.steem.io/smt-whitepaper.pdf)

The liquidity mentioned on the whitepaper is obtained by a reserve in the form of Steem that is locked away so that trades can buy and sell custom tokens immediately. This means that a lot of Steem will be locked away and taken away from the exchanges.

Everyone who creates an ICO or a custom token with the feature of Automated Market Makers will be contributing to the scarcity of the Steem Token, which should in time increase the value of Steem (if demand stays constant).

There are other factors that should contribute to the increase of Steem's value, however the implementation of Market Makers is for me the most compelling reason to invest in Steem now.

If you wish to analyze other reasons why Steem is a good buy at the moment, you can check out @ned [last post](https://steemit.com/steem/@ned/explainer-value-flows-on-steem-with-smts-video), where he states 5 reasons why SMTs will contribute to Steem's growth.

👍 teamsteem, chitty, ajvest, nanzo-scoop, boatymcboatface, kingscrown, gavvet, elyaque, stackin, timsaid, pharesim, drakos, steevc, cryptoctopus, pnc, cryptogee, betamusic, figox, theshell, xeldal, berkah, soundlegion, bitcoiner, dandesign86, dragonslayer109, coinbitgold, etnique, benmar, bobskibob, oscarcc89, t-bot, rossco99, luisucv34, greenstar, journeyoflife, icoinvestor, mafeeva, isacoin, ericarthurblair, mummyimperfect, hcf27, jacor, bravenewcoin, holihop, valchiz, braini, lamech-m, writingamigo, garrettjgrubbs, lauralemons, heriafriadiaka, ak2020, grandpere, mandela, kharrazi, slavix, yennifer, funnyman, dray91eu, albinormaydii, ace84, amaliatul, gordonovich, nirjkolay1, and 24 others

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redpill	472,298,026	1%
bobskibob	10,752,179,017	100%
browncoat	350,028,800	100%
me-do	359,178,743	1%
indiantraveller	116,573,476	0.06%
stackin	142,123,244,514	10%
oscarcc89	10,543,018,958	100%
ericarthurblair	4,711,003,647	10%
etnique	12,023,728,050	100%
isacoin	5,789,281,875	15%
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@g-mor · Oct 2 '17

SMT contribution would change a lot of things

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@amaliatul · Oct 2 '17

Cool

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@dontstopmenow · Oct 2 '17

$0.15

I agree. And I would add that Steem price will increase in a healthy way, creating real life usage.

 While ETH grew a lot in price on the ICO boom (June-July 2017) it was in an artificial way, creating useless tokens most of the time, that still have no use, only an idea backing them up (most of the cases)

SMT on the other hand will feel more organic and healthy.

Cant wait to see this being implemented in many ways and websites!

👍 chitty

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@craigcryptoking · Oct 2 '17

Such exciting times ahead .. great tech great post, here's to the future, Cheers ;)

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@journeyoflife · Oct 2 '17

I think this is exactly what we have been waiting for , and Steem will have its time to rise and shine 2018.

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@inventor16 · Oct 2 '17

https://steemitimages.com/DQmNaxCr3HFYYr3TDKpkJx6iYbYPNLHpLPwezBmpfep48We/STEEM%20MOON%20TIME.JPG

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