Liquidity affects all markets from time to time. Saver Token is no exception. Here are some features of Saver Token that help to ensure that there are buyers for your tokens when the time comes.
- The Savers Pledge. People buying Savers have agreed to the Savers Pledge. This means they recognise that there are times they need to be patient if there are not enough buyers on the exchange. This self-discipline in effect reduces supply until demand picks up.
- Marketing. The expansion of demand for Savers helps to preserve liquidity. When token holders are pleased with their tokens they share their good news with others. This helps to create more demand for the tokens as more people enter the market.
- Restriction of supply. Because new tokens only enter the market at a 2% premium to the Target Price, existing demand is reserved first for people wishing to sell their tokens at the Target Price. Existing token holders have first access to liquidity.
- Reserves. We hold reserves with which we buy tokens at the Target Price minus 2%. This is discretionary on our part. There is no obligation on us to do this. However having a “buyer of last resort” helps the entire market, including ourselves, during liquidity squeezes. We initially aim for 100% reserve covering the value of all purchased tokens. Over time we intend to reduce this to around 30%. Historically over the last two hundred years a 30% reserve has been ample to deal with most liquidity events encountered by central banks and currency boards. In the case of Saver Token, the reserve is secondary to the self-responsibility of the Savers Pledge. The current reserve is published on the website and updated weekly. At present the figures are un-audited.
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