Quantitative analysis of the Dextools deflationary model

The results show the strengths and robustness of the token $DEXT, a direct consequence of the continuous buybacks.

Disclaimer: We’re not financial advisors. Do not take anything on this blog as financial advice, ever. Do your own research.

 

Quick intro: what is $DEXT?

$DEXT is the utility token of Dextools.io, the leading platform in DEFI analysis and trading tools. You should buy $DEXT because it lets you:

• Access premium features of the app through holding or monthly subscriptions
• Access Dext Force Ventures, the $DEXT whale & investment club
• Benefit from Dextools revenues and growth by simply holding $DEXT

 

Dextools Revenues

We find dextools.io extremely interesting because it has a diversified set of revenue streams, such as:

• Banners in app (with 10m+ views/month)
• DextForce ventures fees and profits
• Fees paid by project to update social info on-app
• Fees from on-platform multi-dex aggregator

The first two points are used to sustain operations, development, expand the Dextools ecosystem, and also to perform acquisitions.

Even though the numbers are not disclosed, we estimate a revenue north of $300k per month for points #1 and #2.

Update social info revenues in $BNB and $ETH are used to cover marketing and expansion activities (roughly, 8 ETH/day) while everything paid in $DEXT (cheapest option) is instead directly burned. The aggregator revenues instead are fully used to buy back $DEXT from the market and burn it.

These two activities create a constant buy pressure, currently in the 500k to 1M $DEXT per month.

But that’s just about the present. Possible use-cases (not yet confirmed, I’m sharing some insider info from the Dextforce Ventures group!) in the short future are:

• Launching its own launchpad ($DEXT used to access different tiers)
• Access infinite
  www.replicatimeshop.com charges putting balai-vapeur-pascher.com
  Dextools data via API ($DEXT used as a method of payment)
• Mint NFTs, and access NFT charting tool
• Pay or get it as a reward in Dextools Academy future website
•  

If any of this becomes reality, the demand of the $DEXT token will increase, and the buybacks as well.

 

Dextools metrics

These revenues could be insignificant for a project like Uniswap or Pancakeswap, with a capitalization of Billions.

To better contextualize the relevance of these revenues, here you can find Dextools metrics. 

Yes, it has a capitalization of just $22m.

Price of $DEXT	$0.22
Circulant supply	101.0M
Market cap	22.2M
Locked supply	39M
% to founders	0%
Trading volume	120.000$/day
Best Exchange listed	Coinbase

 

Regarding $DEXT holders, as we can see in the following picture, they’re just almost 15k, with a constant uptrend.
But still, a low number compared to the 1M monthly unique users that visit dextools.io.

The Model

We’ve created a simple model that takes into consideration $DEXT buybacks and market events, and allows us to predict $DEXT price in a certain timeframe:

 

price_change = (1+((buybacks+market_pressure)*month)/liq)^2 * (1+eth_delta)-1  

new_price_dext = price_change * price_dext

 

Where:

price_dext = current price of $DEXT [$]
buybacks = estimated monthly buy-back [$DEXT]
market_pressure = estimated monthly buy/sell pressure [$DEXT]
month = timeframe considered [months]
liq = number of $DEXT in the liquidity pool (Uniswap)
eth_delta = estimated delta price of $ETH

 

This formula is just an extension of the Uniswap price change formula:

price_change = (1+buy/liq)^2-1

 

The limitations of this simple model are the following:

• $DEXT price is not 100% dependent from Uniswap liquidity, but also from BSC liquidity and Centralized exchanges. Fair to say though, that according to our analysis, Uniswap is still the main driver of the price.
• If $DEXT price increases, it’s likely that the amount of $DEXT bought-back decreases. Hence for longer time periods, it would be more correct to simulate a lower buyback rate, or lower the expected results.

•  

The simulations in the next paragraphs keep these parameters constant. 

Number of $DEXT in Uniswap Pool: 6M

Starting price $DEXT: 0.22$

 

Standard scenarios

STANDARD 1: Today’s metrics

Current buyback (500k $DEXT/month), No market pressure, No price change ETH

The scenario that takes into consideration today’s data.

	1 Month	3 Months	6 Months	12 Months	18 Months
Price	0.26$	0.34$	0.49$	0.86$	1.35$
Variation	+17%	+56%	+123%	+295%	+516%

If buybacks, market pressure, and Ethereum price don’t change, $DEXT tokenomics will allow $DEXT to double its value in just 5 months.

Quite amazing uh?

 

STANDARD 2: A bit worse than today

Current buyback (500k $DEXT/month), 200k $DEXT sell pressure/month, No price change ETH

Current buyback speed and a bit of sell pressure month by month

	1 Month	3 Months	6 Months	12 Months	18 Months
Price	0.24$	0.29$	0.37$	0.55$	0.78$
Variation	+10%	+32%	+68%	+154%	+257%

Even considering selling pressure from holders, the buy-back and burn system would allow the token to absorb the selling pressure, and have positive returns.

 

STANDARD 3: A bit better than today

Current buyback (500k $DEXT/month), 200k $DEXT buy pressure/month, No price change ETH

Current buyback speed and a bit of buy pressure month by month

	1 Month	3 Months	6 Months	12 Months	18 Months
Price	0.27$	0.40$	0.62$	1.24$	2.07$
Variation	+24%	+81%	+186%	+468%	+846%

If in addition to the buybacks, there’s some buying pressure as well, the estimated results look very good.

 

Bearish scenarios

Let’s check what happens if things start to go south, and also when the sh*t hits the fan for real.

BEARISH 1: Ethereum /2

Current buyback (500k $DEXT/month), No market pressure, -50% price change ETH

Everything remains at today’s levels, but ETH drops by 50%.

	1 Month	3 Months	6 Months	12 Months	18 Months
Price	0.13$	0.17$	0.24$	0.43$	0.67$
Variation	-41%	-22%	+12%	+98%	+208%

In this case, we can see how $ETH -50% performance affects $DEXT in the short term, but the buybacks allow $DEXT to recover in around 6 months.

 

BEARISH 2: Ethereum <400$

Current buyback (500k $DEXT/month), No market pressure, -75% price change ETH

Everything remains at today’s levels, but ETH drops by 75%.

	1 Month	3 Months	6 Months	12 Months	18 Months
Price	0.06$	0.08$	0.12$	0.22$	0.34$
Variation	-71%	-61%	-44%	-1%	54%

I believe this is where you need to stop for one second.

Breath.

You’ve read that correctly.
If Ethereum loses 75% but $DEXT maintains current buybacks, it will be at break-even in just 1 year. And +50% in 1.5 years.

That’s the power of buybacks.

 

BEARISH 3: Sh*t hits the fan

Current buyback (500k $DEXT/month), 200k $DEXT sell pressure/month, -50% price change ETH

Bad situation where Dext holders continuously dump and ETH loses 50%.

	1 Month	3 Months	6 Months	12 Months	18 Months
Price	0.12$	0.14$	0.18$	0.28$	0.39$
Variation	-45%	-34%	-16%	+27%	+79%

Selling pressure would make the token suffer more, however, if the buybacks are above the selling pressure, we still have a positive result in the mid-term.

 

BEARISH 4: Sh*t hits the fan harder

Lower buyback (350k $DEXT/month), 200k $DEXT sell pressure/month, -75% price change ETH

In the worst case scenario, dext revenue decreases. Holders dump each month. Ethereum dumps 50%.

	1 Month	3 Months	6 Months	12 Months	18 Months
Price	0.11$	0.13$	0.14$	0.18$	0.23$
Variation	-47%	-42%	-34%	-16%	+4%

In the worst-case scenario (check how bad the situation is!) you’d break even in 18 months. Just to be clear, in the same simulation, you’d have a -75% return if holding Ethereum.

 

Bullish scenarios

We’ve seen $DEXT can survive even disaster scenarios, thanks to its tokenomics.
But how well would the token perform in bullish scenarios?

Warning: as stated in the limitations of the model, in larger time frames (say, more than 6 months), when the token rises, it will be unlikely to be able to maintain the same buyback pressure. Hence, the results for the long term are too good to be true, but still it’s a fair indication coming from the model.

 

BULLISH 1: Finally some green

Current buyback (500k $DEXT/month), 200k $DEXT buy pressure/month, +50% price change ETH

Everything goes well. Constant buyback. Bit of buys. Ethereum goes well.

	1 Month	3 Months	6 Months	12 Months	18 Months
Price	0.41$	0.59$	0.94$	1.86$	3.10$
Variation	+87%	+172%	+329%	+752%	+1319%

Nothing to add here. Just look at the numbers.

 

BULLISH 2: ETH > 3.000$

Current buyback (500k $DEXT/month), 200k $DEXT buy pressure/month, +100% price change ETH

Everything goes very well. Constant buyback. Bit of buys. Ethereum above 3.000$

	1 Month	3 Months	6 Months	12 Months	18 Months
Price	0.54$	0.79$	1.25$	2.48$	4.13$
Variation	+149%	+262%	+473%	+1037%	+1792%

Nothing to add here pt.2 . Just look at the numbers (with dollar eyes, probably)

 

BULLISH 3: YES PLEASE

Current buyback (700k $DEXT/month), 200k $DEXT buy pressure/month, +50% price change ETH

Buybacks increase. Bit of buys. Ethereum increases. Fred buys a private Island.

	1 Month	3 Months	6 Months	12 Months	18 Months
Price	0.43$	0.68$	1.17$	2.53$	4.41$
Variation	+98%	+213%	+436%	+1059%	+1919%

 

Pardon? 

You’re asking where to trade it after seeing this?

That’s the link you’re looking for.

https://www.dextools.io/app/en/ether/pair-explorer/0xa29fe6ef9592b5d408cca961d0fb9b1faf497d6d

 

Conclusions

I guess you now understand why we’re so confident about our $DEXT holdings.

The token allows you to have limited risk on the downside, and explosive upside potential. That’s why we define it as the best choice for this insecure market.

As long as the buybacks continue at this rhythm, there will be significant results. 

 

Article by:

Paolo Montemurro – Blockchain Army Founder and CTO, Dextools Ambassador
With data support of Pierandrea Cecconi – Blockchain Army Project Development

Any further questions? You can directly ask me (@montedev on Telegram) or chat in Dextools’ community.  https://t.me/DEXToolsCommunity