Understanding Risk:
This page explains the main factors that influence the dollar price of Seasonal Tokens, with a focus on understanding how and why prices can go down.
Seasonal Tokens are traded in decentralized markets, and their prices emerge from market mechanics rather than being fixed or guaranteed.
How dollar prices are formed.
Liquidity Pools.
The dollar value of a Seasonal Token is determined by liquidity pools on decentralized exchanges such as Uniswap.
A liquidity pool is a smart contract that holds:
• A Seasonal Token (for example, Spring)
• A base asset (Ethereum or Polygon)
Ethereum pools hold tokens paired with ETH, while Polygon pools hold tokens paired with POL.
Token price inside a pool.
Using the Spring / POL liquidity pool as an example: The price of Spring in POL is given by: Price (Spring in POL) = POL in the pool ÷ Spring in the pool.
If the pool contains:
• 100 POL
• 10 Spring
Then: 1 Spring = 10 POL
Converting to dollars.
To get the dollar value of Spring, we multiply its price in POL by the dollar price of Polygon.
For example:
• If 1 POL = $0.10
• And 1 Spring = 10 POL
Then: 1 Spring = $1.00
How can the dollar price go down?
There are two direct mechanisms:
1. Liquidity pool rebalancing
◦ If Spring is added to the pool and POL is removed, Spring’s price goes down.
◦ If POL is added and Spring is removed, Spring’s price goes up.
2. Base asset price changes
◦ If the dollar price of Polygon or Ethereum falls, the dollar price of Spring falls accordingly, even if the pool balances remain unchanged.
Risk Layers
Structural Risk Layer.
Assume the liquidity pool balances remain constant.
In that case:
• Holding Spring on Polygon has the same dollar risk as holding Polygon.
• Holding Spring on Ethereum has the same dollar risk as holding Ether.
This also works in the opposite direction:
• If Polygon or Ethereum rise in price, the Seasonal Tokens paired with them also rise in dollar value.
In this sense, participating in Seasonal Tokens implies indirect exposure to Ethereum and Polygon technologies.
Internal Risk Layer (protocol dynamics)
Now assume the dollar price of Polygon or Ethereum remains constant.
In this case, risk comes from changes inside the liquidity pools themselves.
During the early years of the project:
• Tokens are continuously mined.
• Miners typically sell part of their production to cover costs or take profits.
• This introduces downward price pressure as tokens enter liquidity pools and base assets are withdrawn.
This pressure is not constant:
• Every nine months, the production rate of the cheapest token is cut in half.
• Over time, new supply decreases, reducing sell pressure.
Market Risk Layer (supply and demand)
Like any decentralized market:
• Buy and sell orders can push prices up or down.
• Prices reflect the balance between available supply and active demand.
As mining supply decreases over time, demand becomes increasingly important in determining prices.
Token demand and long-term context
Over four years of relative price data show that the Seasonal Tokens system is behaving as designed. Future demand depends on:
• More people discovering the system
• Participation in seasonal trading
• Use of the ecosystem as a learning and experimentation environment
As with all decentralized systems, outcomes are driven by participation, not guarantees.
How Seasonal Tokens can reduce risk in crypto
As discussed earlier, the dollar value of Seasonal Tokens is driven by supply and demand in the liquidity pools. Mining supply is designed to decrease over time, so demand becomes the main variable that determines long-term price behavior.
What creates demand for the tokens?
With most cryptocurrencies, demand often comes from a single idea: buy the asset and hope its dollar price rises. Seasonal Tokens can attract that kind of demand too—but they add additional reasons to hold and use the tokens beyond “buy and hold.”
I Demand from a strategy that aims to grow token balance
Seasonal Tokens form a four-token system with repeating relative-price cycles. This makes it possible to use a disciplined strategy that focuses on increasing the number of tokens you own over time, instead of depending only on the market to raise the dollar price.
The key idea is simple:
• When relative price ratios become “wide enough” to offer a favorable swap, you can trade one token into another to increase your total Seasonal balance.
• When ratios are not favorable (prices are too close together), you can guide your trades focusing in “mining time” which is equivalent to “energy spent” on tokens creation. For example: If Spring and Summer prices are very close together, but mining Spring costs more energy, then it is better to trade your Summer for Spring, because relative prices tend to reflect the differences in production cost.
This approach doesn’t remove risk—nothing in crypto does—but it can reduce exposure to timing the overall market, because the strategy is based on relative ratios inside the system.
II Demand from a hedged, internal trading environment
Seasonal Tokens behave like a hedged ecosystem: instead of constantly reacting to external narratives and market swings, you can focus primarily on the relationships between Spring, Summer, Autumn, and Winter.
In practice, that means:
• You can treat POL or ETH as the base currency for entering/exiting.
• Inside the system, most decisions can be guided by relative price levels between the four tokens, rather than trying to predict the whole crypto market.
This can reduce the feeling of “everything depends on Bitcoin today,” because your trades are driven by internal ratios.
III Demand from flexibility and recovery after mistakes
Because the system is cyclical, a trader who makes a poor swap isn’t necessarily forced to “sell at a loss” immediately. They can often wait for the relative prices to move again and look for a better ratio later.
That doesn’t guarantee recovery, but it does encourage a calmer, more process-driven approach compared to one-shot directional bets.