You are currently viewing Coin Report #71: Golem

Coin Report #71: Golem

Welcome to the 71st Coin Report. In today’s report, I will be assessing the fundamental and technical strengths and weaknesses of Golem. This will be comprised of an analysis of a number of significant metrics, an evaluation of the project’s community and development and an overview of its price-history. The report will conclude with a grading out of 10. I hope you enjoy the read!

Introduction

This is the sixth of my subscriber-exclusive Coin Reports, with Golem winning the December poll. Each month, I will run a poll and publish a Coin Report on the winner either that month or the following month, available only to those of you that are subscribed to my premium content.

Keep your eyes out for the January 2021 poll, which will be hitting your inboxes soon.

I hope this report will prove objective where it must be and fair on more subjective matters. For those who’d like to learn a little more about Golem prior to reading this report, here are some primary links:


Fundamental Analysis

General:

Name: Golem

Ticker: GLM

Hashing Algorithm / Token Type: ERC-20

Sector: Decentralised Computing

Exchanges: Poloniex, Uniswap, Coinbase Pro, Bithumb, Binance, Bittrex, Huobi Global, Bitso, Bitfinex, Gate.io, OKex and many more.

Launch Overview

Golem was conceptualised as a decentralised computing network in 2016 by Julian Zawistowski and Andrzej Regulski. Golem launched with a token sale in November 2016 raising ~$8.6 million, in exchange for ~820mn GNT of a maximum supply of 1,000,000,000 GNT. Of the remaining 180mn GNT, 60mn GNT was allocated to the team and advisors whilst 120mn was allocated to the Golem Factory for project development. All tokens are now unlocked and in circulation.

Golem launched Brass Golem in April 2018, which facilitated the earning of GNT for providers of computing power, with requestors spending GNT to purchase that computing power.

In November 2020, Golem announced a migration from the original GNT token to a new ERC-20 token with the ticker GLM, on a 1:1 swap basis. This swap is now underway.

Price-History Overview

As Golem has now been trading for around four years, there is a great deal of available price-history (and multiple market cycles), which I will delve into in the Technical Analysis section. For now, it will suffice to say that Golem formed its all-time low at $0.009 in late December 2016, though its all-time low against Bitcoin formed much later in January 2020 at 335 satoshis. Regarding its all-time high, this formed in June 2017 at 29,650 satoshis, but formed its all-time high versus the Dollar at $1.26 in January 2018.

Project Overview

Golem’s purpose may seem a little complex at first glance but it is primarily concerned with providing a platform for decentralised computing, whereby a marketplace is created for users to exchange computer power for economic value.

As stated in its whitepaper:

Golem is the first truly decentralized supercomputer, creating a global market for computing power. Combined with flexible tools to aid developers in securely distributing and monetizing their software, Golem altogether changes the way compute tasks are organized and executed. By powering decentralized microservices and asynchronous task execution, Golem is set to become a key building block for future Internet service providers and software development. And, by substantially lowering the price of computations, complex applications such as CGI rendering, scientific calculation, and machine learning become more accessible to everyone.

Golem connects computers in a peer-to-peer network, enabling both application owners and individual users (“requestors”) to rent resources of other users’ (“providers”) machines. These resources can be used to complete tasks requiring any amount of computation time and capacity. Today, such resources are supplied by centralized cloud providers which, are constrained by closed networks, proprietary payment systems, and hard-coded provisioning operations. Also core to Golem’s built-in feature set is a dedicated Ethereum-based transaction system, which enables direct payments between requestors, providers, and software developers.

The function of Golem as the backbone of a decentralized market for computing power can be considered both Infrastructure-as-a-Service (IaaS), as well as Platform-as-a-Service (PaaS). However, Golem reveals its true potential by adding dedicated software integrations to the equation. Any interested party is free to create and deploy software to the Golem network by publishing it to the Application Registry. Together with the Transaction Framework, developers can also extend and customize the payment mechanism resulting in unique mechanisms for monetizing software.

I look forward to measuring its progress since inception.

Let’s begin with some Metric Analysis:


Metric Analysis:

Below are listed a number of important metrics, all of which are accurate as of 9th December 2020. For anyone reading this who has yet to read a Coin Report, it might be worth reading this section of the first report, where any potentially unfamiliar terms are explained. For any terms or metrics specific to this post, I will provide explanations besides the figures.

Metrics:

General:

Price: $0.114 (625 satoshis)

Circulating Supply: 1,000,000,000 GLM

Total Supply: 1,000,000,000 GLM

Maximum Supply: 1,000,000,000 GLM

% of Max. Supply Minted: 100%

Network Value: $114,062,500 (6250 BTC)

Network Value at Max. Supply: $114,062,500

Exchange Volume: $1,042,138

Exchange Volume-to-Network Value: 0.91%

Category: Midcap

Average Price (30-Day): $0.112

Average Exchange Volume (30-Day): $9,561,701

Average Network Value (30-Day): $102,066,251

Average Exchange Volume (30-Day)-to-Network Value: 9.37%

Volatility* (30-Day): -0.0231

Average Daily On-Chain Transactions (30-Day): 409

Average Daily Transactional Value** (30-Day): $1,031,129  (source)

NVT*** (30-Day): 110.62

% Price Change USD (30-Day): +29.9%

% Price Change USD (1-Year): +218.7%

USD All-Time High: $1.32

% From USD All-Time High: -91.2%

Premine % of Max. Supply: N/A

Premine Location: N/A

Liquidity (calculated as the sum of BTC in the buy-side with 10% of current price across all exchanges): 21.47 BTC (excluding ~$815k of Uniswap liquidity for GLM)

Liquidity-to-Network Value %: 0.34%

Supply Available on Exchanges: 19,040,250 GLM

% of Circulating Supply Available on Exchanges: 1.9%

*Volatility is calculated by taking the average price over the given time-period, calculating the difference between it and the highest price and it and the lowest price over that same time-period, and multiplying those figures together. The closer to 0, the less volatility during that period, and vice-versa. Read this for more on volatility.

**Transactional Value in $ is calculated by taking the daily transactional value in GLM and multiplying it by average price.

***NVT is calculated by dividing the Network Value by the Average Daily Transactional Value. See here for more on NVT.

Supply Emission & Inflation:

Block Reward Schedule: N/A

Average Block Time: N/A

Current Block Height: N/A

Annual Supply Emission: 0

Annual Inflation Rate0%

Circulating Supply in 365 Days: 1,000,000,000 GLM

 

Token Sale:

The following details were taken from this source.

Public Sale Period: 11th November 2016

Total Tokens: 1,000,000,000 GNT

Total Tokens Available for Public Sale820,000,000 GNT

Total Raised: ~8,600,000

Average Price Per Token: $0.01

Total Tokens Sold820,000,000 GNT

Token Distribution:

  • ICO: 820,000,000 GNT
  • Team and Advisors: 60,000,000 GNT
  • Golem Factory Reserve: 120,000,000 GNT

 

Distribution:

Address Count: 105,044 (inclusive of ~990 new migration contract addresses)

Supply Held By Top 10 Addresses: 12.9%*

Supply Held By Top 20 Addresses: 17.87%*

Supply Held By Top 100 Addresses: 42.85%*

Inactive Address Count in Top 20 (30 Days of No Activity): 14*

*Excluding team and exchange addresses, but including subsequent private addresses. Also only accounting for pre-migration addresses and activity.

 

Analysis:

There’s quite a lot to cover here for Golem and I’d like to begin by looking at the transaction-related metrics, before continuing with the remaining General metrics and concluding with the (lack of) Supply Emission and Inflation and some Distribution analysis:

So, having found some data from Messari, for the past 30 days of activity, I found that there were an average of 409 daily on-chain transactions over that period, equating to $1,031,129 of transactional volume on average per day. This gives Golem a 30-day NVT of 110.62. This is around 2x that of Bitcoin at present.

Now, let’s take a look at Golem’s Volatility, which came in at a moderate level. I calculated its 30-day figure to be -0.0231, which places it among the bottom tenth of prior reports. This is potentially indicative of a consolidation range, and thus possibly accumulation underway preceding a new cycle. We will take a look at this at length a little later.

Moving on, let’s take a look at the two Liquidity-related metrics:

For buy-side Liquidity, I calculated that there was 21.47 BTC of buy support within 10% of current prices across listed exchanges, equating to 0.34% of its Network Value. This is excluding ~$815k of liquidity on Uniswap for GLM. Golem’s buy-side liquidity on the orderbooks is moderate, placing it 14th-highest among previous reports.

Looking at the sell-side, I calculated there to be 19,040,250 GLM available for purchase on the orderbooks, equating to 1.9% of the circulating supply. This is very low and likely due to the current token swap that is underway. Nonetheless, for many exchanges this process has completed, so it is promising to see so little Golem in the ask side of the orderbooks.

Before I move on from the General metrics, let’s take a look at those related to volume:

Golem traded $1,042,138 of Exchange Volume over the past 24 hours, equating to 0.91% of its Network Value; a fairly weak figure. More impressively, its Average Daily Volume for the past 30 days was $9,561,701, equating to 9.37% of its Average Network Value for the same period. This is the 11th-highest figure recorded in these reports and is very much indicative of speculative interest.

Now, with regards to Golem’s supply emission, in short, there is none. This is due to all GLM being in existence already and all of it being unlocked for circulation. Thus, Golem’s annual inflation rate is 0%.

Let’s wrap up this section with a look at Distribution:

Looking at the Golem rich-list, I found that there were 105,044 holders (including ~990 new migration contract addresses), which is the 4th-highest figure found in these reports.

Of these holders, the top 10 addresses control 12.9% of the maximum supply; the top 20 control 17.87%; and the top 100 control 42.85%. These figures are excluding team and exchange addresses and are also only accounting for pre-migration addresses, as the majority of the ~250mn GLM that has been migrated is held in exchange addresses anyway, at present. In the pre-migration rich-list, exchange and team addresses control ~251mn GLM.

Now, regarding the activity of the top 20 non-exchange/team addresses over the past 30 days, many of these were inactive for that period; 14 addresses, in fact. Of the remaining 6, all 6 addresses accumulated GNT (now GLM) over that period, with net inflows of 21,158,413 GNT, equating to 2.1% of the maximum supply.

Let’s now take a look at the Golem community:


Community:

There are two primary aspects of community analysis: social media presence and Bitcointalk threads. I’ll begin with the former before moving on to the latter.

Social Media:

Concerning social media presence, there are four main platforms to examine: Twitter, Facebook, Telegram and Discord.

Golem is present on all four platforms. To begin, let’s look at the various social metrics that I calculated from the Golem Twitter and Facebook accounts:

Twitter Followers: 146,062

Tweets: 3,735

Average Twitter Engagement: 0.02%

Facebook Likes: 11,782

Facebook Posts (30-Day): 8

Average Facebook Engagement: 0.05%

As usual, I will be using RivalIQ‘s social benchmark report for evaluation purposes.

Twitter:

Golem has a very large Twitter audience of 146,062 followers, which places it 1st among coins previously reported on. With such a large audience, it has very weak engagement at 0.02%. This is less than half the average across all industries of 0.045% and a fraction lower than the average in the Tech and Software industry of 0.027%; relative to other Coin Reports, this is the lowest engagement rate ever.

Facebook:

Now, with regards to Facebook, Golem has a much smaller audience of 11,782 Likes, but the engagement is still very poor at 0.05%. This is again around half that of the average across all industries of 0.09% and only 2.5x greater than the average in the Tech and Software industry of 0.02%, despite a much smaller audience than many of the companies in that sector in RivalIQ’s report. Relative to prior reports, it is 4th-lowest. Overall, engagement across both Twitter and Facebook is abysmal for such a prominent project. Attention must be redirected here.

Discord:

There are 1,813 members of the Golem Discord group.

This group is not very active at all, with a dozen or so messages posted to the General channel over the past week, with much of the discussion in the group within the Migration channel, as community members either request support or generally discuss the token swap process. Regarding the activity in General, though there is nothing of particular note here concerning the community itself, it is great to see that support is provided promptly for those that require it.

Let’s take a look at the Telegram group and see if anything more can be gleaned there.

Telegram:

The Golem Telegram group has 2,725 members.

I have provided my key takeaways from recent activity in the group below:

  • The group is not particularly active, with only a handful of messages posted here per day.
  • Development updates are republished to the group.
  • The team are active in the group and respond to the few community queries.
  • Much of the current discussion is focused on the migration from GNT to GLM, which is about 25% to completion, with 251mn GNT converted of the 1bn maximum supply.
  • Many exchanges are supporting the GNT to GLM migration, but migration manually will also be available indefinitely.
  • The primary purpose of the migration to ERC-20 is to add the Approve function, enable layer 2 solutions and for decentralised exchange listings, along with utility for other DeFi solutions. The migration is for improved user experience.
  • Binance has now completed their token swap for GNT holders on the exchange and launched GLM markets.

Beyond that, there is very little else of note in the group.

BitcoinTalk:

The Golem BitcoinTalk thread was created on October 19th, 2016, and has since generated 3200 posts spanning 160 pages in 1513 days. This equates to 2.11 posts per day, on average. However, in the past 90 days, the thread has had 3 posts via 3 individual posters, giving an average of 0.03 posts per day, rendering the thread dead.

In short, many of the platforms on which a community would usually be highly engaged and vocal are rather inactive, which is surprising for such a long-standing project. Whilst I am well aware of the team’s progress on the development front since late 2016, I am a little disappointed in what seems to be a lack of effort to foster community growth following the conclusion of the bull market in January 2018.

And that concludes my evaluation of the Golem community.

Let’s now look more closely at development:


Development:

For the following Development analysis, I will be evaluating project leadership, the website, the roadmap, the whitepaper, the wallets and finally providing a general overview:

Project Leadership:

The Golem team is comprised of 30 employees, as per the website, with 25 employees listed on LinkedIn. The team is currently hiring several roles.

More specifically, the core team consists of:

Website:

The website can be found here.

The website is very much modern in its design, with strong branding and intuitive design, supplemented by clear and comprehensive navigation.

Beginning with the homepage, we find three primary aspects of development currently front-and-centre: the migration to GLM, the current product suite and a For Developers section. Visitors are invited to learn more about each of these immediately. As we scroll down the homepage, we find a useful introductory video on Golem, as well as a brief textual overview of the project that explains its mission to become a global, open-source and decentralised supercomputer, with a marketplace for processing power that enables a wide variety of computing tasks, such as CGI rendering, machine learning and scientific computing. Scrolling further still, we find an overview of the marketplace, which is comprised of requestors that can rent out the power of providers’ machines, all of which is facilitated by GNT (soon to be GLM). We also find links to documentation, Github and the blog (which I will come to shortly).

As the visitor gets towards the footer of the homepage, we find more detail on Golem ecosystem itself and its components, beginning with the Clay implementation (the most recent release but prior to New Golem, which is in development). Clay Golem is on mainnet and allows users to earn tokens by renting out unused computing power, with live use-cases including Blender rendering, gWASM app integration, gLAMBA molecular simulations and video transcoding. There are download links provided here, also. We also find information on the nearly-production-ready Golem Unlimited, which will allow users to create a Hub of linked computers within an internal network. Finally, we find a brief overview of Graphene, which is a Library OS for unmodified applications, bridging the gap between applications programmed for single systems. The footer of the homepage contains a list of recent news articles and social links.

Now, whilst there are plentiful resources on the website, the blog is the most useful for better understanding recent developments from the team, as this is very regularly updated with detailed articles.

Blog

Below, I have provided some key takeaways from recent blog posts to better determine the progress being made by Golem and the state of the project at present:

  • Golem released their most recent implementation, Clay, earlier this year, which is a precursor for New Golem, which will follow the GNT to GLM migration. New Golem remains in development but the Alpha release was launched in August 2020. Alpha 2.0 was released in October.
  • Paragon have been contracted by Golem to work on the project’s public relations moving forward.
  • Golem launched a Community Incentives Program in July that remains running today, in order to improve community engagement and foster growth, incentivising the community with GNT rewards and merchandise.
  • The GNT to GLM migration began in November and is at present 28% to completion. GLM will be the native token for New Golem’s mainnet upon public release, and the utility of an ERC-20 token will be primarily for Layer-2 solutions.
  • Upon the December release of Alpha 3.0 of New Golem, Layer-2 was implemented with a azkSync payment driver by default, allowing providers to test via an incentivised testnet. Moreover, with this release, providers can use their own wallet address for payment receipt, improving UX vastly. Regarding near-future priorities, for New Golem these include mainnet readiness, Secure Execution Environments, Rust API, a fully decentralised network module, more payments drivers and web browser support.

Roadmap:

There is no traditional roadmap available for Golem, and all of the relevant information on the future of the project has been highlighted above.

It is a shame that there is no comprehensive one-stop resource available for the community in this respect, as the fragmentation of the vision of Golem across the blog makes it difficult for new users to better understand what lies ahead.

Whitepaper:

The whitepaper can be found here, but it is now 4 years old and much of it is outdated and thus unsuitable for our purposes of evaluating the current state of the project.

Wallets:

As GLM is now an ERC-20 token, it can be stored on a plethora of wallets, including hardware wallets like Ledger and Trezor, web wallets, mobile wallets and many desktop clients.

And that concludes my fundamental analysis of Golem.

Let’s finish up by analysing its price-history:


Technical Analysis

GNT/BTC

Weekly:

GNTBTCWeekly

Daily:

GNTBTCDaily

GNT/USD

Weekly:

GNTUSDWeekly

Daily:

GNTUSDDaily

Golem has now been in existence for over four years, making it one of the primary beneficiaries of the 2017 bull cycle.

If we begin by looking at GNT/BTC, we can see from the weekly that price spent late 2016 in a bit of a downtrend, finding support at the then-all-time-low of 860 satoshis, before beginning its bull cycle. Price swiftly rallied from there, pulling back once in March 2017 to around 1,500 satoshis before catapulting towards 29,647 satoshis in late June 2017, which remains the all-time high. Subsequently, the pair began its first major bear cycle, erasing the bulk of the gains and breaking through numerous support levels until it found a base at 1,500 satoshis in December, before rallying again into 10k satoshis by May 2018. Following that macro lower-high, price began a slow two-year bleed into new all-time low, where it formed range support at the all-time low of 327 satoshis and range resistance at the prior all-time low of 860 satoshis. If we turn to the daily, we can see that price found that range resistance on a retest of the 360-day moving average in February 2020, having been capped by 750 satoshis prior for half a year. This range was ultimately broken in August 2020 as price rallied just shy of 1,500 satoshis before retracing back into the range, where it is currently wrestling with the 360dMA. I have been a buyer inside this range, expecting price to at the very least retest the 200wMA at 3,400 satoshis, if not the 2018 cycle high at 10k satoshis given sufficiently frothy market conditions.

If we turn to GNT/USD, we can see that price rallied from the all-time low of $0.0088 in December 2016 to an all-time high of $1.26 in January 2018, finding a new base of support for several months at $0.17 prior to that high forming. Following January 2018, however, price retested the June 2017 cyclical high at $0.75, failed to break higher, and began its descent, breaking below $0.17 and flipping it as resistance in September 2018. Subsequently, the pair fell for over a year until it formed a low at $0.027 in January 2020, swept it during March capitulation into $0.02 and has since reversed, potential beginning a new bull cycle. The most important level remains capping price at $0.17, however. This also happens to be the 200-week moving average. If the pair can break and close above $0.17, I think we’ll see significantly higher prices follow, with the prior cyclical high at $0.75 a likely retest.

And that concludes my evaluation of Golem.


Conclusion

This report is now over 4,000 words, and it is time to draw it to a close.

My final grading for Golem is 8 out of 10.

Here, you can find my grading framework, for reference.

Lastly, here is a link to a Google Sheets file with any significant data from previous reports compiled for cross-comparative purposes. I will keep this updated as I continue to write these reports.

I hope this report has proved insightful and that you’ve enjoyed the read! Please do feel free to leave any questions in the Comments, and I’ll answer them as best I can.


 

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