Quote from: welshminer on June 09, 2017, 05:53:25 PM

Quote from: ajhodge7 on June 09, 2017, 04:11:01 PM

Ok, $1m trade volume is generous, but a good round number...so $100k in buy back everyday on top of the normal amount, so like you said, a 20% increase in demand. A 20% increase in demand would result in a higher magnitude change in the actual price of the token, not just a 20%. This would result in some serious upward momentum based on economic theory assuming a normal elasticity...ICN's supply is inelastic since quantity is fixed (BUT quantity decreases as buybacks occur). There is multiple factors occurring where these buybacks could get out of hand quickly.

Here is a perfectly inelastic supply line. Note Do moving to D1 and how Po goes to P1:
https://econmicro.files.wordpress.com/2012/10/perfectly-inelastic-supply-in-market-period1.jpg

And here is a "normal" supply (fiat currency):
https://www.ezyeducation.co.uk/images/Lexicon_Images/supply_cuve_shifts.png

NOW decrease the supply and your price change is even greater...

SO, looking at the first graph, move S to the left (call is S'). You'll now be let with a new P- price (call it P2),which will be even higher than P1 since the equilibrium will be where D1 and S' theoretically cross. There are 3 factors causing the magnitude of change to be more than 20% (increase in demand, decrease in supply, and the fact supply is inelastic).

I'm not really offering a solution, just noting the problem.

We are talking about different things - I was trying to say that limit orders during buybacks will be filled and there is no need to buy at market price. You say 20% increase in demand will cause disproportionate increase in price. Sure, I agree.

However, markets are slightly more complicated than what your drawings show.

In the short run supply curve heavily depends on subjective beliefs and can wobble frequently.
Overall the supply curve of ICN looks something like this and shifts back with every burn.

Hey Welsh,

Yes, markets are def more complicated, that is why I said "theory", not reality.

The supply curve does not look like oil though. Oil supply increases as the price increases since one can use methods that are more costly to extract more oil. So supply is not fixed. ICN is fixed and it is not dependent on external factors for changes in its supply...the only thing that changes supply is internal factors which is why it is inelastic. ICONOMI shifts the supply curve (line here) when it burns tokens. Yes, the amount they burn is external, but they ultimately determine supply.

Anyways, I think we are off topic and I missed your original point so my bad there.

I agree limit prices will be filled, but I think another user stated they would be spending more in buy backs by doing that.

Good sh!t here, hope to keep the topic alive.