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Trading Hedera Hashgraph Hbar tokens before OA - Real or Fake?
Originally published on Medium: https://link.medium.com/N5cXj3sUeV
Recently I have noticed some talks on social channels about the OTC deals relating to Hedera Hashgraph. That looked strange to me because no OTC deals are allowed by Hedera. And any SAFT investor who would enter that kind of deal is may be in a breach of the SAFT contract. So I took the time and decided to look closer into this strange activity.
I noticed that some people were selling hbar tokens that they earned by participating in Hedera’s phase one community testing program. In the grand scheme, this is probably doesn’t matter because the number of tokens earned in phase one of the testing was very small. And the majority of these sellers were scams. I would better encourage you to wait until phase two of Hedera’s community testing for the opportunity to earn hbar tokens by testing Hedera Hashgraph’s services.
Regarding hbar tokens that were sold to investors. These tokens will be distributed after OA (open access of Hedera’s network), over one or four years depending on the SAFT contract. So imagine a hypothetical OTC deal scenario: you get involved with one of these OTC deals, you send your money to be locked in an escrow contract until hbar tokens are transferred.
First of all, the deal would take at least until summer or later, depending on when the first tranche of Hedera’s hbar will be released. That’s not your typical OTC deal where you get your coins in a couple of days. This additional time creates additional risk.
But let’s imagine that you are willing to take that additional risk and move forward with the deal.
Scenario #1. After the hbar tokens are unlocked, the price is higher than the agreed OTC contract price, the seller cancels the contract because he can get a better price on an exchange and you get your money back — if you are lucky. In this scenario, the seller is getting price downside insurance for free.
Scenario #2. If the price on the exchanges is lower than you paid you will get your hbar tokens, but you end up paying a higher price than you could get on the exchange. Again, the seller wins in this scenario.
Scenario #3. You get scammed. From my research, the majority of Hedera OTC deals were scams, to begin with.
And if you would ask: but the OTC desk is trusted, and they will not break the contract. I would answer: It could be that OTC desk is perfectly legit. But the OTC desk can’t guarantee for the sellers’ intentions. The seller may be already in breach of SAFT contract by selling tokens over OTC, so why would you think that he will not break this OTC contract if he would benefit from it?
In all these scenarios you would be at high risk of losing your money and sleep.
I believe it would be prudent to just wait until hbar tokens are on exchanges. And in the meantime, you can participate in the Hedera’s community testing program and earn some hbar by testing Hedera’s services.
I want to thank BrandonH for helping to write this article. You can check his youtube video The Hedera Hashgraph HBAR Bull Case
I am a Hedera Hashgraph Ambassador and MVP, but DO NOT work for Hedera. Opinions in this article are my own.