As Pencils Protocol has completed the IDO of DAPP on platforms including Tokensoft, Bounce and Coresky, and DAPP has been launched and traded on Gate, Bitget, Bybit and Kucoin, it indicates that the Pencils Protocol ecological economic system has been fully operational.

After DAPP was opened for trading, the token also started short-term staking activities on Gate, Bybit and Pencils Protocol. It is reported that the Staking APY ranges from 50% to 800%. The high APY also attracted a large number of DAPP token holders, including airdrop users and new users, to actively participate in order to gain higher currency-based returns, which greatly reduced the early market circulation of DAPP tokens.

As Pencils Protocol continues to promote the progress of a series of markets, DAPPs with low circulation are also expected to continue to capture value in subsequent markets and continue to enter a new round of deflationary season.

What role does $DAPP play in the Pencils Protocol ecosystem?

$DAPP is an important core asset of the Pencils Protocol ecosystem. Holding DAPP tokens can obtain a variety of functions and privileges, including increased staking rewards, higher leverage privileges in the Vaults section, and more LaunchPad project quota allocation opportunities in the Auction section.

Also in the Auction section, $DAPP also serves as collateral for trading NFTs and real-world assets and is integrated into DeFi products to achieve liquidity and lending, and users will enjoy fee discounts when using Bridge and DEX services.

As a comprehensive income platform in the Scroll ecosystem, Pencils Protocol provides rigid-demand functions, whether it is the multiple capture points income of Farming or the leveraged mining and asset management of the Vaults section, as well as the upcoming Auction and other models. In particular, whale investors, LRT project parties, and AI and FHE projects also need to obtain services from Pencils Protocol, which means that the rigid demand for DAPP is certain and continuous.

Pencils Protocol has made it clear that it will regularly repurchase and destroy $DAPP. For example, Vaults will use 30% of its profit income to repurchase DAPP tokens to accelerate its deflation. In the future, other sectors will also use their profits to repurchase DAPP tokens.

Therefore, from a mechanism perspective alone, DAPP will have rigid demand, especially when combined with the destruction mechanism, it will continue to generate deflation.

DAPPs with low circulation

The total amount of DAPP tokens is 100 million, which is not much compared to the total amount of other tokens that are worth billions of dollars. From the perspective of token distribution, almost all sectors have a lock-up period. For example, the public offering round has a lock-up period of 8 to 12 months, and the airdrop round also has a certain lock-up period, that is, 50% is released at TGE, 25% is released 30 days after TGE, and the remaining 25% is released 60 days after TGE.

Therefore, there are only a few million DAPP tokens in circulation, and the current series of staking activities on different platforms have greatly limited the early circulation of DAPP tokens. In particular, the launch of Vaults products will further reduce the market circulation rate of DAPP tokens through market demand.

This means that DAPP chips are scarce and more likely to be pulled up in the future! Market sentiment is still pushing more people to participate in buying for long-term layout.

The buying volume far exceeds the selling volume, and smart people are all buying!

Currently, whether it is Gate, Bybit, Kucoin or Bitget, the buying volume is far greater than the selling volume, so this shows that many smart people are absorbing chips in order to wait for long-term opportunities rather than selling in the short term.

Therefore, this indirectly proves that most people are optimistic about the long-term development of the Pencils Proocol ecosystem and the long-term value of the DAPP token. According to the current market situation, the FDV of DAPP is only 40 million US dollars, which is inconsistent with the project narrative and is seriously underestimated. Therefore, at this stage, it will be the lowest cost stage to hold and deploy DAPP.