Hello Steemian !!
In this article, I will discuss the homework provided by @wahyunahrul which is about token redenomination.

What Is Token Redenomination

Source

Token Redenomination is a process in which a blockchain project token will be recalibrated so that it will generate a new token. The purpose of creating new tokens is to increase the level of token liquidity in the markets and another purpose of token redenomination is to attract the attention of other small investors. Then token redenomination can also be referred to as a process to simplify the token value without affecting the token value. This can be said to be different because of the process of dividing tokens into several places so that the supply increases and small investors are able to get smaller amounts of tokens.

The redenomination will be announced by the developer/project owner by sending an open letter to the investors, then the investors will read the contents of the letter which will explain the intent and purpose of the token redenomination. When a token is redenominated it will get a new value set and the token will have a new token logo, name, and address so as not to conflict with the previous token.

In addition to simplifying the value of tokens, redenomination is also carried out by increasing the features that are in the project, the developers/project owners will try to improve the services available in their projects so that investors will still feel at home to join the project.

Token redenomination is no different from fiat currency redenomination or other asset redenominations. The difference is only in token redenomination, investors do not have the right to approve or reject the redenomination, because all decisions are in the hands of the developer. Meanwhile, the redenomination of other assets, such as shares, investors have the right to refuse the redenomination process at the meeting held.

Pros and Cons of Token Redenomination

1. Pros

• Increase Market Capitalization
  The first advantage of token redenomination is that it can increase market capitalization. As we know that market capitalization is a very important thing for a cryptocurrency, because this can be a reference whether the cryoptocurrency is a good asset or not.

• Updating Features
  In addition to simplifying the value of tokens, redenomination is also often used as an event to improve the existing features of a project. Usually the developers will make various changes to the features when announcing the token redenomination plan, this is so that old investors who have joined the project don't have to worry if the project does not have any progress.

• Bring Small Investors
  By redenominating tokens, the price of tokens that were initially high will become cheaper, this will allow retail investors who do not have large capital to purchase these tokens without having to worry that they will not get a large portion of the project. .

• Make Market More Liquid
  Another advantage of token redenomination is that it will make the market more liquid. This is because many people will start trading on the token market and that will make a lot of buying and selling offers occur so that the market will be more liquid. Market liquidity will greatly affect how many people will trade on a token market, traders will prefer markets that are easy to trade than markets with low trading levels.

2. Cons

• Fear Old Investors
  Although redenomination is a positive thing, it can bring something negative, for example, there are cases where investors who do not have sufficient knowledge about token redenomination are afraid that the project they invest in will scam, so many investors run away. of the project. This may seem silly, but that's what often happens in the field today, because lack of knowledge scares investors and decides not to invest in the project again.

• Token Exchange Fee
  One way to get a new token is to exchange the old token for a new one on an exchange or platform. And to do so there will be a fee charged for investors to be able to exchange their tokens, this can be a factor that makes investors lazy to make the exchange because they have to spend more capital just to exchange their tokens.

• Possible Hacking
  With the update of the new system on the new token, this will open up opportunities for hackers to hack because the new system is still very vulnerable and not too immune from attacks from these hackers.

Do All Cryptocurrency Projects Have To Token Redenomination?

Redenomination is something that is done to increase the supply of tokens but still maintain their value. This is done so that existing trades on the market are more liquid and can attract more investors who do not have large capital. But the thing we need to know is that not all cryptocurrencies have the same problem as this and not always the problem has to be solved through token redenomination.

Therefore, in my opinion redenomination is not a must for all cryptocurrecy projects. Redenomination is one way for a project to survive and improve some of the things needed, but these things don't always have to be solved by making a token redenomination decision.

PundiX Redenomination

Source

One of the tokens currently being redenominated is the PundiX token. This token was originally named NPXS and then the developer decided to redenomic the NPXS token by shrinking the supply from the initial 258 billion to 258 million so that 1 PundiX is equivalent to 1000 NPXS.

Now I will show you how to convert from NPXS token to PundiX.

To do this, we just need to visit the official website of PundiX, then on the start page a notification will appear to exchange NPXS tokens for PundiX, we just have to choose the white Swap Now option.

We will be given several options for choosing a wallet according to what we have, to connect the wallet we choose one of the options provided, here I will choose the MetaMask wallet.

A notification will appear asking us to login to the MetaMask wallet. We have to enter the password of the MetaMask wallet.

A permission request will be displayed asking for permission to have our wallet linked to the PundiX website.

After the wallet is successfully connected to the PundiX website, then we can immediately swap from NPXS tokens to PundiX. Here because I don't have a balance in my wallet, I can't do it.

But I will show you one example I got from medium to exchange NPXS tokens into PundiX. We can see in the picture below that he wants to exchange 10,000 NPXS and he will get 10 PundiX and there will be a fee charged for this exchange process of 0.0066116 ETH.

PundiX Token Analysis

Even though the PundiX token is doing Token Redenomination, it doesn't mean we can buy this token right away for us to invest. There are a few things we should look at first before deciding to buy PundiX tokens.

Currently the PundiX token is ranked 233 of all cryptocurrencies and its current price is at the level of $1.25 which has decreased by 7.08% over the past 1 day. The value of PundiX's MarketCap is also at $323,603,309.

The current circulating supply is 258,491,637.23 PUNDIX, this means that the total number of PundiX tokens in circulation is 100% of all existing PundiX tokens.

But if we look at the price movement chart from PundiX we can see that the price of PundiX has continued to decline from the beginning of the redenomination, this is a negative side that we can consider before buying PundiX tokens.

Currently PundiX has successfully listed on 24 exchanges around the world, it has also successfully listed on major exchanges such as Binance, CoinBase, bitHumb, etc.

Conclusion

Redenomination is a big decision taken by cryptocurrency project developers. Many positive things can be obtained from this activity such as increasing liquidity, increasing the number of investors, etc. But even though not all redenomination projects succeed in achieving their targets, there are some projects that tend to fail after token redenomination. The PundiX token, which is an example of a token that is redenominating tokens, is a token that can be considered as a place to invest, even though the price has tended to decline for a while, but from other data we can see that the PundiX token has an opportunity as a good investment place for the long run.

I thank prof @wahyunahrul who has created a very unique discussion topic like this, I think topics like this will make learning about blockchain and cryptocurrency more interesting to follow.

CC:
@wahyunahrul