Testnet vs Mainnet
Currently, we are in the Test phase Version 2B of Pulsechain, aka Testnet V2b. This most likely will be one of the final test phases that remain.
In a recent interview, Richard Heart stated that Pulsechain could be out within the month; However it should be taken with a grain of salt due to how often software is delayed.
We do not have a date for when Pulsechain will launch its final version, called “Mainnet” What we do know is that when Mainnet goes live, there will be between 24-48 hours before a bridge opens.
The Bridge
The bridge is a tool that allows for users to bring tokens on the Ethereum Blockchain over to the Pulsechain blockchain and vice versa. Without this bridge, there would be no way to migrate a token from Network A to Network B. When the bridge opens and the first trade on Pulsechain is executed, $ value will begin being assigned to tokens.
Before that though, there will be no $ value attached to any tokens, meaning that any exchanging of tokens within PulseX or any exchange will be executed based on a ratio and not $ value.
How does that work?
Ratio Trading
Inside PulseX at launch, the primary way to exchange new tokens (PLSX for PLS, Hex, etc) for another token will be from users placing their tokens in a pool which THEY determine the ratio to.
Normally, the price is used to determine the ratio of what a two token pair needs to be on either side of a liquidity pool.
Before the bridge and without price, users can determine the ratios of a liquidity pool.
This means that they could be setting up a pool that benefits them if you decide to trade before $ value is assigned.
If you are not 100% sure of the ratio of the coin you want to trade for the coin you have, you could get a very bad deal. Secondarily, If you make a bad trade because you could not see the value of the tokens, then when $ value comes over it may take you some time to break even to your original investment amount.
However, since we want to be objective here as best as possible, it COULD be a time to make a VERY good trade that you will not be able to make pre bridge.
The Math
If you decide to make a trade, you are essentially making a prediction on what the market values a pair of tokens to be.
If you are swapping PLSX for PLS for example, a 1:1 trade is a prediction that both PLSX and PLS will perform the same over time.
If you are swapping PLSX and PLS at a 2 PLSX to 1 PLS ratio, you are saying that PLS is 2x more valuable than PLSX. So if you swap half of your PLSX for PLS at this ratio, in order for you to maintain your dollar value, PLS needs to do double the price performance of PLSX for you to break even on the swap.
Conversely if you swap your PLS for PLSX at a 2:1 ratio, you are saying that you expect PLSX to outperform PLS by a 2x.
Now this is where we have to look at the potential for higher ratio trades.
If you make a trade of 5 PLSX:1 PLS you are making the statement that if PLS does a 10,000x, PLSX will do a 2000x in the same period of time. You are essentially saying that you expect PLSX to take 5x longer to reach the same gains as PLS.
Something else to consider
Emotions
If you made a trade based on a ratio that you quickly realized was not good, it is likely that emotions would start to kick in for many of us in a scenario like this.
When our emotions kick in, we become less logical and are more prone to making more poor decisions to try to make up for the previous bad swaps.
In an absolute worst case scenario, this could make you lose a majority of the $ value you had originally invested.
But its not all bad potentially.
The Upside
If you do think that PLSX and PLS will trade at a 4:1 ratio on the market once $ value is bridged over, you could potentially make a great trade should both your prediction be right AND you make a trade for anything equal to or less than 4:1.
Look at it like this: If the market price post bridge is a 4:1 PLSX for PLS and you make the trade of 3:1, you will have accrued an additional 33% in dollar Value on your original investment
This means if PLS does a 100x, your original investment would do a 133x instead.
Should I Swap?
If you understand the risks involved, are experienced with the market and believe you know exactly what you are doing, this may be a great opportunity. However if you are uncertain what the tokens might trade at, how to tell what the ratios are, or can already sense any sort of emotion around the subject, just wait until the bridge.
Pulsechain is likely to experience plenty of X’s in many different coins, so if you are not sure what you are doing it is not worth cutting your investment value in half due to inexperience or your emotions getting the best of you.
Do not act on any Fear Of Missing Out(FOMO).
Be patient and remain logical.
If You Do Decide to Swap
Come up with exactly what you think the market will value the tokens at.
Whatever that ratio for any token pair is, only trade that ratio or less ie. if you expect 4:1, a great trade is that or anything less(3:1, 2:1 or 1:1). Make a plan with an exact percentage of your total amount of tokens you want to trade, for the exact ratio you will trade it for at a minimum and stick to it.
If you are unsure but are going to “risk it for the biscuit” anyways, it is wise to only trade a smaller percentage of tokens to mitigate any potential losses.
But I do need to say one thing.
My Personal $0.02
I think that unless you know EXACTLY what you are doing, just wait for the bridge.
Its too easy to screw something up and wreck yourself. I do not endorse trading, I prefer holding and waiting for price to go up, but I do understand that people may have missed either PLSX or PLS Sacrifices and want to get in before the market.
That is the point of the video, to make sure you understand both sides of the equation and make a decision for yourself.
This is not financial advice, merely a perspective on which to build your own outlook and strategies for the first 24-48 hours of Pulsechain.
We do not know the $ value that will be assigned to many tokens, so it is very hard to predict what the ratio’s might be.
The likelihood of getting it right is very low and should only be attempted if you 100% know what you are doing.
Thank you for reading the blog! Please share it so more people can get informed on the upcoming launch of Pulsechain.
- CRYPTOGRFX