Monaco Card - Should You Buy More Tokens? The Real Value of MCO

Highs and Lows of Monaco

Monaco (MCO) has had ups and downs. A quick ICO, and questions over CEO Kris Marszalek's role in Ensogo and people were quick to call it a scam coin.

A short time later, we see large (and respected) exchanges like Binance listing MCO and community views start improving. Plans of an App release and a Visa Program Manager announcement see MCO hit above $26 USD, before plummeting back to $11 the next day after it is 'only' an App that is released. Visa labelling disappears from the website - reported around the time as being due to non-disclosure arrangements (which probably counts as irony, since that appears to be disclosing information in itself) - and the worrying starts - again.

More than a month later by end October 2017, after a few poorly communicated last minute delays, we see the Visa announcement (hooray!), only to be overshadowed by the removal of the 1% asset contract. This asset contract was touted by Monaco as a feature that gave some obvious inherent value for token holders (albeit, based on a later explanation by Monaco, it is argued that the value is relatively small).

We then see some hardcore last minute backpedalling from Monaco as the token price crashes down to $7. Monaco quickly decides to up the cash back on their Cards from 0.75% to 1% for Ruby, 1.5% for Metal (Rose Gold/Space Gray), and 2% for the exclusive Obsidian Black, but only after the damage is done. This could have been such a good news story if done right, but is instead viewed as a reaction to the price drop and community backlash.

Posted by Monaco on Twitter 7 November 2017, after price crash and community backlash

This attempt to replace the goodwill lost from the (I'll say intentional) covering of bad news of the lost asset contract with the good news of the Visa announcement doesn't go down well and MCO price continues to trend downwards. Monaco then explain that they are 'discussing with their legal counsel a new smart contract design, which would allow (Monaco) to deliver essentially the same value for token holders'.

That's all very nice - but as of today (end November 2017), this is still in progress, and the token price hovers around $5.50 and falling.

So what now?

Under promising and over delivering is obviously a foreign concept to Monaco, but if they do implement an equivalent of the 1% asset contract, holders could actually be in a better position than the original roadmap because you'll have the equivalent of the 1% asset contract AND increased cash back on Cards.

But still, this fact hasn't moved the price back up. People are (rightly) worried about competition, missed deadlines, communication issues and what exactly you get from your MCO tokens right now, speculation aside.

Speculation Aside - what is the value of MCO?

Right now - what does an MCO token get you?

To keep it simple - once the Cards come out in your country (which could be a hard one to predict), it gets you either a Ruby Card for 50 MCO or a Metal Rose Gold/Space Gray Card for 500 MCO.*

Right now, that is all of the utility of an MCO token.

If that is all MCO does - what is the difference between the 50 MCO Ruby and 500 MCO Metal Cards?

While there are a couple of what I think are fairly minor additional perks, like a higher cap on ATM withdrawals, the main difference is Ruby gives you 1% cash back, while the Metal gives 1.5% cash back.

In short, if you spend $1,000 a month on your Card, you'll get $10 back on the Ruby Card, and $15 back on the Metal Card. Over six months, this would be $60 on Ruby and $90 on Metal - a difference of $30.

So about $5 a month. Even if we doubled our spending it would still only be another $30 on top (so totalling $60 difference) over six months.

Not huge, but hey, it's money for jam. Either way, you have to lock up your 50 or 500 MCO tokens for six months. But you get them all back at the end of that time! So why not get the 500 MCO card if you have the funds?

Obviously more cash back is better, but there is an opportunity cost. That is, what you could do instead with that money you spent on getting an additional 450 MCO tokens. The difference between 50 and 500 MCO in cash at $5.50 per token is $2475 (450 x $5.50). If I put $2475 in a fixed term deposit account of a conservative 4% p.a (depending on where you live) I would get close to $50 in that six months with ZERO risk to my initial capital investment, which can't be said for MCO.^

Interestingly, this 'cash back' will be in the form of MCO tokens, purchased by Monaco from the open market on exchanges, and then provided to you.

From here you can exchange the tokens for regular currency to lock in your cash back, stockpile to upgrade your card (would take a while), keep as an investment in hopes the token price will increase, or use for your regular purchases on the Card.

Where does this leave me? I have a touch over 50 MCO, but nowhere near the 500 MCO needed to get the Metal Card.

While Monaco has repeatedly talked about the 500 MCO Metal Cards being 'beautiful' (and it probably is), I actually need a better reason than a pretty card and an additional 0.5% in cash back for me to drop a stack of close to $2500 in cash to get more MCO at time when its price is falling. The main benefit to me based on my spending habits is $5-10 a month (I'm not interested in a higher cap on ATM fees or interbank limits).

I guess the Rose Gold (cough Pink) and Space Gray Metal Cards look 'beautiful'....but the Red looks pretty good

So like me, if you were making your decision based on what you get RIGHT NOW, you probably wouldn't be convinced to up the ante to 500 MCO.

But you're investing for the future, so...

Speculation Included - what is the value of MCO?

You get... promises!! The future is uncertain as the word 'speculation' suggests - so you get promises. The decision to invest is now largely based on trust and that is part of the problem. Many people feel jipped by Monaco - they see them as a company that doesn't deliver on its commitments, does backflips and generally makes a mess of good news stories and communication.

But lets break it down. Promises so far include:

• reinstatement of an equivalent 1% asset contract, pending advice from 'legal counsel';

• general commitments through youtube clips that 'more is on the way', to try and make the offer for 500 MCO Metal Card a better proposition that will eventually be at 'Amazon-Prime' like levels; and

• tidbits from Q&A sessions through Slack and Telegram on additional perks in the works. Here is the collated list which includes things like Airport Lounge access, which is cool.

After all my digging, that looks to be the extent of it.

I also don't think the 'lock-up' period of six months will necessarily drive up MCO price, unless more people who are late to the MCO party want to get the 500 MCO Metal Cards, which will probably only happen if Monaco deliver on the above features.

If you're like me with 50 MCO - should you get 450 more MCO for a Metal Card?

With 50 MCO, you have enough to get a Ruby card with 1% cash back, $500,000 travel insurance, $400 worth of free ATM withdrawal fees and probably more interbank exchange rates than you'll need. Should you get a massive 450 MCO more (about $2500 USD even at the comparatively low price of $5.50 a token) to get a Rose Gold/Space Gray card?

I think your decision is based on just a few things.

If you trust Monaco to implement an asset contract equivalent - as much to increase MCO value as it is to restore community goodwill and support - and that they can quickly work towards an 'Amazon Prime-like' value proposition despite all off-again-on-again commitments and missed deadlines; then yeah, buying more MCO for the Metal Card is a worthwhile investment.

On top of that, if you think Monaco can deliver these features while their competitors can't, due to say, their relationship with Visa, then Monaco is a good choice. But the competition (of varying quality) is everywhere - Tenx, Centra and reportedly SALT just to name a few.

Will Monaco Rise?

Monaco, by most accounts, looks to have a good working relationship with Visa. But this has done little to improve token price. In my opinion, the real test of value entirely depends on what Monaco can deliver with the Visa label over the next 3 to maybe 6 months. If they don't deliver on any of their commitments by early-mid 2018, I wouldn't be surprised to see MCO drop to the $3 range. On the flipside, if they add more Metal Card features, the rollouts go well, marketing is bang on and community sentiment improves - it could quickly jump back above $10.

If the price hangs around the $5 mark, I'll entertain getting more MCO to be closer to the 500 MCO mark, so if they do start delivering on the goods for the Metal cards and the price starts climbing it won't be much more of an investment to reach 500 MCO tokens. This will work the other way round too - if they don't deliver I wouldn't have dropped thousands of dollars to get a 'beautiful' slightly better Metal Card that may only give me an extra $5-10 dollars extra in cash back a month compared to the Ruby Card.

Also with other coins, including ethereum and ye olde bitcoin doing so well, it is hard to put all your energy into Monaco, which has work to do to regain trust and momentum.

*Some people will be able to get the Obsidian Black for a whopping 50,000 MCO, but that looks to be more for early ICO investors who got in cheap with a limit of 999 Cards. For most people that is now out of the question even at the lower MCO prices - so we'll leave that to the side for simplicity.

^ I realise that as you only have to 'lock up' your tokens for six months once, you only have to think about the opportunity cost issue of buying an additional 450 MCO once. The example is more for illustrative purposes.