As the Pencils Protocol completes IDOs for DAPP on platforms such as Tokensoft, Bounce, and Coresky, while simultaneously launching and opening trading on Gate, Bitget, Bybit, and Kucoin, it signifies the full operation of the Pencils Protocol ecological economic system.
After the DAPP trading opens, the token has also initiated short-term staking activities on Gate, Bybit, and Pencils Protocol, with reports indicating that the staking APY ranges from 50% to 800%. The high APY has attracted a large number of DAPP token holders, including airdrop users and new investors, who actively participate to gain higher returns in terms of token value, significantly reducing the early market circulation of the DAPP token.
As the Pencils Protocol continues to drive a series of market developments, the low circulating supply of DAPP is expected to continuously capture value in the subsequent market and enter a new round of deflation.
What role does $DAPP play in the Pencils Protocol ecosystem?
$DAPP is an important core asset in the Pencils Protocol ecosystem. Holding DAPP tokens provides various functions and privileges, including enhanced staking rewards, higher leverage privileges in the Vaults section, and more allocation opportunities for LaunchPad projects in the Auction section.
Similarly, in the Auction section, $DAPP also serves as collateral for trading NFTs and real-world assets, and is integrated into DeFi products to achieve liquidity and lending. Users will enjoy fee discounts when using Bridge and DEX services.
As a comprehensive yield platform within the Scroll ecosystem, Pencils Protocol offers essential functions, whether it’s the multiple capture of points from Farming, leveraged mining and asset management in the Vaults section, or the upcoming Auction model. This is especially necessary for whale investors, LRT project parties, and AI and FHE projects, all of whom need services from Pencils Protocol, indicating that the demand for DAPP is certain and ongoing.
Pencils Protocol has clearly stated that it will regularly conduct buybacks and burns of $DAPP. For example, Vaults will use 30% of its profit to buy back DAPP tokens to accelerate its deflation, and other sections will gradually use profits to buy back DAPP tokens in the future.
Therefore, from a mechanical perspective, DAPP will have essential demand, especially as the burn mechanism will continuously create deflation.
Low circulating supply of DAPP
The total supply of DAPP tokens is 100 million, which is relatively small compared to other tokens with total supplies in the tens of billions of dollars. From the token distribution perspective, almost all sections have lock-up periods; for instance, the public offering round has a lock-up period of 8 to 12 months, and the airdrop round also has a certain lock-up period, releasing 50% at TGE, 25% after 30 days, and the remaining 25% after 60 days post-TGE.
Currently, only a few million DAPP tokens are circulating in the market, and at this stage, the introduction of a series of staking activities on different platforms has greatly restricted the early circulation of DAPP tokens. Especially with the launch of the Vaults product, the market demand will further reduce the market circulation rate of DAPP tokens.
This also means that DAPP chips are scarce and are more likely to be driven up in price later! Market sentiment is still encouraging more people to participate in buying, aiming for long-term positioning.
Buying pressure far exceeds selling pressure; smart people are buying!
Currently, whether on Gate, Bybit, Kucoin, or Bitget, buying pressure far exceeds selling pressure, indicating that many smart investors are accumulating chips in anticipation of long-term opportunities rather than short-term selling.
This indirectly proves that most people are optimistic about the long-term development of the Pencils Protocol ecosystem and the long-term value of the DAPP token. According to the current market situation, the FDV of DAPP is only 40 million USD, which is inconsistent with the project narrative and severely undervalued. Therefore, this stage represents the lowest cost for holding and positioning DAPP.