View source for Unit bias

== Basics ==

* Unit bias is a term used to explain why some people buy 'cheap' tokens, even though when looking at the [[Market Cap|market cap]], the fundamental evaluation might show the tokens are not cheap at all. A good example of unit bias was [[Ripple (XRP)|Ripple]] in 2017, which many new investors bought, since they though [[Bitcoin (BTC)|BTC]] was 'expensive' with it being a couple thousand dollars per coin, and XRP below a dollar. However BTC has a total supply of 21,000,000 and Ripple 100,000,000,000.
*[https://thedailygwei.substack.com/p/chaotic-good-the-daily-gwei-245?token=eyJ1c2VyX2lkIjoxMzk3OTAwLCJwb3N0X2lkIjozNjMyNzQwNCwiXyI6IllKNVRlIiwiaWF0IjoxNjIwODkyMTM0LCJleHAiOjE2MjA4OTU3MzQsImlzcyI6InB1Yi01Mjg5MyIsInN1YiI6InBvc3QtcmVhY3Rpb24ifQ.P3v7vIAJ1wjBty From] [[Daily Gwei]] (16-5-2021):

''"So we’re all well aware of the recent “dog coin” phenomenon playing out in the markets - that is, lots of people (particularly new retail investors) have been bidding up various dog-themed tokens off the back of the recent [[Dogecoin (DOGE)|Dogecoin]] surge. These tokens usually have a very large supply which means their unit price is very low - for example, the most well known of these, [[Shiba Inu (SHIB)|SHIB]], has a total token supply of 1 quadrillion and a current price of $0.00002836. As you may be aware, these sorts of tokens are very appealing to newer investors because they are able to buy lots of them with little amounts of capital (unlike having to spend over $4,000 to buy 1 [[Ethereum (ETH)|ETH]], for example). Obviously this is all really silly because the [[Market Cap|market cap]] of an asset is what really matters, not unit price."''

== Projects taking advantage ==

* Multiple projects realized they could capitalise on this phenomena and divided their tokens in smaller divisions. [[Polkadot (DOT)|Polkadot]] is a notable project which did this where one DOT (old) equals 100 new DOT ([https://wiki.polkadot.network/docs/en/faq 18-8-2020]). [[ARC (ARCx)|ARCx]] [https://arcx.substack.com/p/aip-2-arcx-token-split-110000?token=eyJ1c2VyX2lkIjoxMzk3OTAwLCJwb3N0X2lkIjozNTY2MDUwNiwiXyI6InRxYSs5IiwiaWF0IjoxNjIwMDM0MDY4LCJleHAiOjE2MjAwMzc2NjgsImlzcyI6InB1Yi0yMzI0NTUiLCJzdWIiOiJwb3N0LXJlYWN0aW9uIn0.hZ3eckABb5-_Ma_y0kqLVaR followed] suit with a 1:10,000 token split (27-4-2021).
* [[Aave (AAVE)|Aave]] went the other direction by rebranding from EthLend and [https://aave.com/aavenomics/ changing] the supply from 1.3B LEND to 16M AAVE.
* Other projects thought of other ways to play into the demand of smaller unit prices are yEarn, which [https://twitter.com/bantg/status/1392231374086676483 created] [[Woofy]] where 1 million Woofy equals 1 YFI. And someone [https://twitter.com/brianmcmichael/status/1393291342248386566 created] [[Breaker]], where he pegged Breaker to MakerDAO and 1 billion tokens equal 1 MKR.

[[Category:Jargon/Various]]