A Quick Analysis of the Circulating Supply of $GRASS and Other Thoughts.

Author: Res

Compiled by: ShenChao TechFlow

Currently, the effective market capitalization of $GRASS is $275 million, with an actual circulating supply of 37 million tokens in the market, which amounts to $60 million (calculated at $1.60 each). This is important because cryptocurrencies are highly speculative assets, driven by momentum and tight liquidity. The unlocked supply is 250 million tokens, which includes 150 million held by the DAO/foundation and 100 million for airdrops.

1. ### For the 150 million tokens held by the DAO/foundation

• Of these, 28 million tokens have been staked at an annualized yield of 52%. Rewards come from the treasury, meaning 15 million tokens are reserved for staking incentives. This constitutes the expected sell-off pressure for the first year, as no additional tokens will be unlocked before October 2025, and locked tokens cannot generate rewards. At the current price of $1.60, the monthly sell-off pressure is approximately $2 million. This pressure is low, known, and fixed, and the market is expected to recognize this. The demand side remains unknown.

2. For the 100 million tokens for airdrops

• 65 million have been claimed, out of 78 million distributed, leaving 13 million unclaimed, with another 22 million in unknown status (a total of 35 million not in circulation). It is unclear why 78 million were distributed when the tokenomics indicate 100 million.

Thus, totaling 250 million tokens, deducting the following parts:

• 35 million unclaimed or undistributed tokens

• 15 million tokens for incentives (i.e., the first year's sell-off pressure)

• 28 million staked tokens

This results in an actual circulating supply of 172 million tokens, calculated at $1.60 each, giving a total market cap of $275 million.

If we do not consider the additional 135 million tokens controlled by the DAO/foundation for growth purposes (*), the actual circulating supply is 37 million tokens, calculated at $1.60 each, with a market cap of $60 million.

(*) I believe this is a reasonable assumption in the early stages, as the use of these tokens may be negligible initially, but over time and with the implementation of various growth plans, the impact of these tokens will gradually become apparent.

While investors typically make decisions based on market capitalization, understanding the details of circulating supply is even more important in the cryptocurrency space. Because in this market, liquidity often has a greater influence than valuation, and everything is driven by momentum. Therefore, the current situation is:

• The actual circulating supply is only 9-10%

• No new token emissions or unlocks will impact the market

• The circulating supply remains constant over the year, with 1.25 million tokens as rewards each month, this known sell-off pressure eliminates a significant degree of uncertainty

• Tokens appreciate in value as demand increases (through buybacks), although this may seem unremarkable, it is good news for market promotion

• As a new concept in the cryptocurrency space, this naturally sparks speculative interest, which, although difficult to quantify, is also an advantage

Under these conditions, the price is likely to rise in the short term, so it is not surprising that GRASS has tripled in a week and may continue to perform well. While fundamentals do matter in the long run, I am working to understand these fundamentals to make more informed decisions, but for now, I am still observing market trends.

Some "fundamental" advantages I have noticed include:

• The ability to handle 80 TB of data, capable of scraping GTP-3 / 3.5 almost twice a day (which requires 45 TB of data for training)

• Scraped nearly 1 billion minutes of multimodal data (including video and images), for which the company paid a considerable amount

• 2.5 million daily active users, achieving rapid growth in just one year

• 2 million nodes

• The network is widely used by AI labs and has attracted attention from Fortune 500 companies

• Plans to be installed on mobile phones and collaborations with Xbox and Roku TV

• The CEO stated that demand for the network has reached nine-digit levels

While I have not meticulously verified all the information, it is clear that this is a story attracting a lot of attention. GRASS has solid data, a strong team, good partnerships, and the potential for large-scale growth. While we need to be cautious about daily active user metrics in the cryptocurrency space, the growth rate is indeed impressive. There are currently 2 million nodes, and if these nodes are indeed used by large companies, then this project may truly have potential.

On the other hand, I have noticed some negative viewpoints, such as regarding $ALAR (Alarum Technologies). It is listed on NASDAQ, has more nodes, quarterly revenues exceeding $8 million, and a market cap of $88 million. By the way, their stock price trend looks like one of those altcoins launched by unreliable teams during market peaks, worth a look. However, I do not know much about this company, and everyone can compare for themselves.

Moreover, scaling to tens of millions of nodes while maintaining decentralization will be a huge challenge, but our goal here is to trade this coin.

From a positive perspective, GRASS's advantages include: decentralization, web3 speculation, low circulating supply and low liquidity, as well as social effects driven by market manipulators and key opinion leaders. Additionally, there are incentive mechanisms, positive feedback loops, and reflexivity promoting growth.

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