Binance Smart Chain (BSC) has become the hottest platform for developers to create DeFi projects. One of those projects is Rainbow, which is meant to reward holders of the Rainbow token while pursuing other altruistic goals.
The project whitepaper contains some bold promises for investors and we were curious to find out if the actual product matches the description. This article is the product of our research to help you decide whether or not you should buy the Rainbow token today.
What is Rainbow token anyhow?
As a BEP-20 token, Rainbow token Bsc is one of the tokens that exist on the Binance Smart Chain. But instead of using a single protocol to operate, the Rainbow project combined 7 protocols. This ensures all bases were covered and attracted all kinds of investors regardless of their goals.
How has Rainbow token performed
It was so successful that 6 minutes into the DxSale, $210,000 (roughly 500 BNB tokens) had been spent. The DxSale raised the number of holders to 1,000 just after the launch, but that number would climb to 29,449 at the time of publication.
As you can see from the distribution chart above, most of the 1,000,000,000,000,000 (1 quadrillion) Rainbow tokens minted at launch now remain in the hands of individuals. According to the whitepaper, this is to keep the project decentralized even away from the developers themselves.
So far, over 45k wallets hold the token individually, showing the widespread support the token has received since its launch. This is an important measure to protect investors from rug pulls usually affected when a coin only has a small number of investors.
How does the project work?
The Rainbow project operates by employing 7 protocols each named after a corresponding colour of the rainbow. These protocols all work concurrently to make the project useful for multiple functions and situations thus keeping the Rainbow token valuable.
It begins when a transaction is made by a user, whereby they will be charged a 7% tax. The fee is then distributed into each of the 7 protocols as follows:
Red: burn – 1% of the tax collected is burned by being sent to the burn address ‘0x000000000000000000000000000000000000dEaD’. By reducing the supply of RAIN over time, the value of the Rainbow token ought to rise in value
Orange: buyback – after 1% of the tax is collected from a transaction, it is converted to BNB. Afterwards, in case a user sells RAIN, the collected BNB is used to buy some of the sold RAIN from the liquidity pool. This way, the price of RAIN doesn’t fall sharply
Yellow: reflection – this refers to interest earned simply by holding the Rainbow token. It aims to encourage people to hold on to the token rather than sell it
Green: charity – 1% of the tax is allocated to various charities, and holders can vote on specific charities
Blue: auto-liquidity – some of the tax is also stored in the liquidity pool to reduce price swings even during periods of high trading volume
Indigo: marketing & development – basically, this fund is used to advertise Rainbow and attract more investors such as on Rainbow token Twitter
Violet: lottery – after reaching a specific threshold, the funds collected in a side-pot from collecting the 1% tax from all transactions are awarded to a random buyer of the Rainbow token
How legitimate is it?
Looking at Rainbow token on BscScan is one sure-fire way of telling how the project is doing. As mentioned before, the token already has significant support from individual investors. Furthermore, trading activity is also high, which is a good sign that a particular token is receiving the attention it deserves.
Rainbow has indeed received some legitimate interest from investors. It has been actively traded on PancakeSwap as you can see below and Rainbow token price, as you can also see on the Rainbow token Poocoin price chart, has been rising in value in tandem with other cryptos.
Future price prediction 2022-2025
If you take a look at the token’s price against BNB from CoinGecko, it is clear that the price is higher than it was at launch. In fact, the price of $RAINBOW is up over 3,700% since it was first launched. Compared to other BEP20 tokens, this is high rate of growth, especially when you consider that the current price is even lower than the all-time high.
For the moment, crypto investments are stagnating and trading in a sideways trend following the general crypto market. Nevertheless, the Rainbow token has not lost its appeal and is holding within a price support level. Further pressure to the downside could send it toward the previous level of support around $0.000000016 but it’s unlikely to go any lower.
If all the intended implementations according to the roadmap are implemented, Rainbow token stands a high chance of climbing past the current resistance. It could go up to $0.000000023 by the end of 2021 and at the start of 2022.
Given the progress made so far, it is not difficult to see the coin drop at least one 0 from the market price as it heads toward the $0.0000002 level. That alone would be a growth of nearly 800% in under 5 years, and a very significant growth level.
This is something very likely given the current progress in the project as you can see above. And once more progress is made, we could see even faster growth especially as DeFi continues to grow in popularity accompanied by a different form of investment that aims at environmental sustainability.
Disclaimer before investment
Despite this, the Rainbow network is still not active. It’s still in development mode with the expectation to launch Bifrost Beta sometime this year. This means you can only benefit from the coin’s price fluctuations but none of the 7 protocols promised in the whitepaper.
For this reason, the Rainbow token appears to be a risky investment. That’s not to say it doesn’t deserve your consideration, but merely to highlight the risk involved. Such projects do indeed have the promise of high returns, but you must still be aware of the potential risks so you’re fully informed.