From July 2nd to July 4th , the price of EOS RAM exploded, and in the next 48 hours, it experienced a cliff-like decline. The rapid change of price is shocking even in the currency circle, it create the saying of "RAM in circle one day, currency circle in one year"
As a media person, what fat cat has experienced here in this RAM "roller coaster", is the impact of information dissemination on price changes.
From June 12th, 2018 to July 10th, 2018, the keyword RAM appeared more than 2,400 times in fat cat's more than 60 currency groups. With this slightly longer than one month’s period, the price of RAM has gone through 5 cycles, which can be simply listed as A-E phases, stationary period, development period, peak period, fallback period, and stationary period (2).
A. Stationary period - from mid-June to June 28th
In the discussion group of Fat Cat, the first message of RAM appeared on May 5th, in the EOS general holder community. It is the highlight of Peter's EOS Dawn 4.0 from Chaince:
"The brand-new RAM allocation mode. Now RAM can be freely traded in the market according to the needs of buyers and sellers, it no longer subjects to the limitation of selling RAM at the initial purchase price in 3.0, thus stimulating the willingness of both parties to trade freely.
In order to prevent speculators from speculating in the RAM market, EOS's new smart contract sets RAM to be non-transferable and a 1% charge of fee is removed from the market.
At the time, the EOS main network was not online yet. Most EOS holders may not pay attention to white papers and technological progress, resulting in a large number of EOS holders in the community completely unresponsive to the word RAM. Standing at the current point in time, it is no accident that the Chaince CEO can capture the information of the RAM surge. He saw the RAM allocation mode before the main network show up on online.
The second discussion wave took place from June 7th to June 12th. They discussed in the developer community about how should DAPP developers use RAM for development, but most of the conversations were limited to the correspondence between EOS and RAM. Some developers believe that the EOS system is too expensive, four EOS can only buy about 200KB of memory.
The third wave of discussions took place around June 18-June 26. At this time, the currency media platforms such as CDSN, Bihu, etc. have begun to write articles such as "EOS account opening", "EOS, RAM risk hedging" and "EOS Memory purchase", wallet DAPP began to publish promotional articles. Fat cats noticed RAM in this wave of discussions, the price of RAM has risen 10 times, wondering around 0.1 to 0.13. At this time, some people think it expensive while the others think it cheap. Most people don't understand the pricing of RAM, nor do they understand the Bancor algorithm. They even refused to register a wallet, because they think it troublesome.
1. In stage A, the factors that affect communication are mainly reflected in the threshold of conceptual cognition and the threshold of action.
2. Most people are not eagerly curious about new concepts.
3. Developers are more likely to understand concepts and effects, but if you don't understand the Bancor algorithm, you will have a limited understanding about RAM pricing.
B. Development period - June 27 to July 2
The discussion in the development period belongs to friends with strong curiosity and strong mobility. Topics are mainly about “How to register the wallet” and “How to collect the wallet candy”. The promotion of the wallet developer is basically evenly distributed in the EOS holder community after a week. The dissemination at this stage, in addition to the content distribution at the A stage, the market has added an interpretation about the Bancor algorithm. The EOS Ram telegraph group was established. At this stage, the number of telegraphs did not exceed 1,000.
The more interesting points are:
Account registration: How to register EOS wallet, how to register EOS account, how to transfer money
RAM: What is RAM, how to mortgage EOS, how to buy RAM
Bancor algorithm: How is RAM priced?
1. In stage B, most people began to try to understand RAM due to the price changes of RAM and the promotion of wallets.
2. The general concern at this stage is that since the price has risen so much, is it worth to buy now?
C. Peak period - July 3
One day in the currency circle is one year in the world. Due to the accumulation of users in the AB stage, the EOS wallet registered users skyrocketed. Everyone began to form a soft consensus that "RAM is a scarce resource", and at the same time, the Bancor algorithm belongs to the "gravitational up" algorithm (The higher the price, the faster the increases), the price of RAM reaches the conditions of skyrocketing, and the price rises exponentially. At around 20 o'clock on July 3, Beijing time, the RAM price reached a staged peak of 0.93, and then began to fall.
In that day, the content of the dissemination including all the contents of the A-B stage, the further promotion of the popular Bancor algorithm science. There are two forms, one is the calculation of the formula, and the other is the simple illustration. More and more people intuitively understand that once the memory footprint reaches 90%, the RAM price will reach 1.490 EOS. This picture seems to indicate that "RAM only rises and does not fall", supporting the confidence of those who bought orders at 0.93.
At the same time, since most people's EOS is “locked” in the exchange and cannot be cashed, there are more and more voices on the market calling for the exchange to open EOS selling.
The basic knowledge of science in this period has reached a staged peak. Everyone has passed the word and the market is getting hotter and hotter. From the information that fat cats knows, most people are waiting for 90% of the points, thinking about leaving at this point. According to the Bancor algorithm, the price of RAM will be too high to predict. When most people believe this, the "consensus" is formed.
D. Fallback period - July 3 to July 5
From the curve point of view, the first ones to break the "consensus" is that some people who do not have so many "faiths" to the price. Since most people are waiting for 90% or RAM rises to 1EOS, this point is likely to be trampled. From the perspective of the human nature, it seems safer to quit early. As everyone gradually understands the RAM pricing mechanism, more and more people begin to understand the two risk points that affect the price of RAM, expansion and sidechain. Among them, expansion is the biggest risk point, just like the sword of Damocles hanging above the holder's head.
After all, as long as you have a little understanding of Daniel Larimer (BM), you know that he is a fickle person, EOS DAWN 3.0, RAM and pricing, to the DAWN 4.0 version, it directly changed to Bancor algorithm.
What is the turning point of this price? According to the observation of the fat cat, it is when the RAM transaction opened by the OTCBTC and ZB exchanges and the opening of EOS coin cash out. The impact of this news is that most people want to leave at the hottest point.
At this stage, the price is fluctuating, the long and short power are fighting. From June to early July, there are only a few exchanges that open EOS cash out. During the fall of the RAM price, the Huobi still could not cash out. At this time, there was a remark saying that “Huobi would rather lose money to maliciously short the RAM market” and “the number of Huobi EOS is urgent”. Such remarks have affected a part of the market sentiment, and RAM prices continued to extend downward.
On July 3rd, Li Xiaolai's recording was exposure, which laid the foundation for market sentiment.
In the early morning of July 5th, BM published an article on Medium, a media platform, and further explained the EOSIO system and the Bancor algorithm. It also indicated that the RAM price was changed due to the careless setting of the Bancor Relay parameter to 0.05% instead of 50%. This results the dramatical change of the RAM price. After the article was released, RAM price continued to plummet.
The consensus formed in the stage C is that RAM is a scarce resource, and the Bancor algorithm makes the RAM more likely to increase. As long as there is no expansion, the risk theory can be observed and predicted. Once someone first gives up the "consensus", a stampede like the D-stage curve will happen, and various "long and short" remarks will appear, some of which may be facts, and the others may be lies. Choose what to say and who to trust, depends on whether you are a holder or a player.
E. Stationary period - July 5th to now
At this stage, the price of RAM gradually tends to fluctuate smoothly. Finally reached the BM envisioned "let the free market determine the price of RAM." The number of EOS Rams in the telegraph group has soared, from a few hundred people in the beginning to 3K. BM’s remarks on the telegraph have always touched everyone’s heart. The vertical media focused on EOS reports almost report BM quotations. every day. If BM says it wants to expand, the price will fall immediately. If BM says that the future value of RAM is huge, the price will rise immediately.
If you see this, you may realize that even in the resource like RAM that is determined useful and have a certain algorithm, it is not the user (developer/user) supply and demand market that determines the price change. It is public opinion communication and news that solely determined the price.
Starting from the 3rd, the exchange has opened currency cash out. At this stage, in addition to wallet, BM quotation, RAM price curve viewer, BANCOR algorithm analysis, other tools like EOS account self-registration tool, RAM pending order trading tool and so on has shown up. Some people have accepted the signal that the RAM price may not rise in the short term, and the RAM player group expands.
As for now, from the lowest point of 0.017EOS/KB to the highest point of 0.93EOS/KB, the price change of RAM is dramatic and has completed a similar path to the Bitcoin 4-year trend curve, but in a short time, some people make money and some people lose money. Can you see which is the information acknowledge stage?