In this article, we will conduct an in-depth analysis of the Feed System project and its FEEDTK token. FEEDTK is available for trade on the AAX exchange.
The cryptocurrency industry has possibilities to enter and disrupt numerous other markets across the globe. We have seen crypto disrupt finance, art, social media, gaming, and many more industries. However, one industry that crypto has not truly attempted to penetrate is the hospitality industry. The cryptocurrency industry has only scratched the surface of this industry through alternative payment systems. For example, the popular travel company Expedia currently accepts Bitcoin for payment of services provided. However, this is old news. With the COVID-19 pandemic shaking the hospitality industry to its core, the team at Feed System had a look at how it could be improved through blockchain technology.
What is Feed System (FS)?
Feed System is the organization that created the FS application. The application aims to increase transparency, efficiency, and safety with the overall benefit of improving user experience. Currently, the hospitality industry continues to use double ledger accounting systems, cash payments, old computing systems, etc. The industry has seen a level of technological neglect. Companies such as Airbnb have kickstarted a technological revolution within the hospitality space. However, the industry as a whole remains slow and technologically backward when evaluated against the technologies available. The FS application aims to help the following parties and achieve the following features:
- Instant payments
- Hotels, bars, bookable venues etc.
- Increased booking system speed
- Increased customer check in / check out efficiency
- Easy tips and payment, all through a single token
- Automatic loyalty program
- Increased special offers accuracy
- Faster and easier experience
How does FS leverage blockchain?
FS is being built on the Stellar blockchain. Stellar utilizes a decentralized open-source payments platform allowing users to send near-instant payments with ultra-low fees and numerous kinds of fiat currencies around the globe. The focus on fast international payments makes Stellar well suited for the FS project.
XLM (the native token of Stellar) is the 25th largest cryptocurrency by market capitalization. The current XLM market cap is approximately $8 billion USD. XLM is available for trade on the AAX spot market on the USDT pair.
FEEDTK token usage
FEEDTK token is a utility token that powers the FS application. FEEDTK is anchored on the Stellar blockchain. Payments through the FS application can be made with the FEEDTK token, but also with other stablecoins and fiat. There seem to be many similarities between FEEDTK and other utility tokens. However, there are concerns over FEEDTK’s potential token velocity.
Identified token velocity concern
Most utility tokens are designed in a similar manner, paving the way for users to instantly spend and use all of their tokens. With Feed System, users are encouraged to purchase FEEDTK for venue payment, staff tipping, etc. However, current research seems to find no benefits of holding FEEDTK. Therefore, users will buy their FEEDTK tokens and use them instantly.
The issue with this is that value from that transaction is not held within the network. This problem is further exacerbated by Stellar network’s speed. With ever-improving on/off ramp integrations, this problem is only becoming worse. Users are unlikely to buy a significant sum of FEEDTK and use the token sporadically to lock up network value.
In Layman’s terms, if Feed Systems’ application users increase, the network value will not increase at a similar rate due to high token velocity, decreasing the potential long-term value of the token. For example, Bitcoin has an extremely low token velocity and as it rarely changes hands, users are encouraged to HODL. This is one of the many reasons why the cryptocurrency increased in value so rapidly. However, cryptocurrencies such as IOTA have suffered in comparison. IOTA has an extremely high token velocity, reducing potential long-term token valuation increase despite the Tangles groundbreaking technological breakthroughs.
With users able to instantly exchange FEEDTK against XLM in various fiat currencies, FEEDTK does not currently look set to be an effective store of value. Therefore, token velocity could become a genuine concern for FS in the future.
The maximum supply of FEEDTK is 1,000,000,000 coins. The breakdown of the planned token distribution can be seen in the figure below (current circulating token supply information is unavailable, but the logical figure should be around 400,000,000 (40%)).
Can FEEDTK be traded on AAX?
FEEDTK can be traded on AAX through the AAX spot market. FEEDTK is available for trade against the USDT pair.
Hospitality industry growth projection
According to GlobalNewswire, the hospitality industry currently has a compounded annual growth rate (CAGR) of 6%. This is a relatively poor projected recovery considering that the hospitality industry in the UK saw revenue decrease by -87% during Q2 2020 with £30 billion GBP lost in revenue. This is primarily due to the effect on the industry by the pandemic extending further than initially predicted.
How will this affect FS?
Businesses within the industry will be searching for ways to overcome obstacles regarding the FS application and potentially use it as a solution for businesses. With the hospitality industry obliged to adapt to a world that is slowly recovering from the pandemic, significant adoption for FS could occur if they market themselves appropriately.
FEEDTK historical price action
FEEDTK has an all-time high of $0.0276 USD and an all-time low of $0.0162 USD. Currently, it is trading at $0.0177 USD. With cryptocurrency being very much in its infancy, little price action around this token has occurred. However, during this period, price action has been volatile and it has been uncorrelated from general market price action. The historical price action chart can be seen below.
A technical analysis of FEEDTK / USDT is currently not possible. This is the infancy of this cryptocurrency. If a technical analysis was conducted, it would be highly inaccurate.
In conclusion, FS is attempting to revolutionize operations within the hospitality industry. The concept works, while the team has the necessary experience to pull it off. Concerns surrounding FEEDTK token velocity are genuine and could negatively affect the token’s price action. However, only time will tell whether this is the case.