Coin Report #64: Utrust

N.B: In the spirit of full transparency, the following Coin Report on Utrust is a Sponsored Post.

Welcome to the 64th Coin Report. In today’s report, I will be assessing the fundamental and technical strengths and weaknesses of Utrust. 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

Utrust has been a project on my radar for quite some time now, but one that I have never had the opportunity to spend any time properly researching. As such, all of the research presented here is fresh and much of it is eye-opening, particularly for us speculators…

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 Utrust prior to reading this report, here are some primary links:

Fundamental Analysis

General:

Name: Utrust

Ticker: UTK

Hashing Algorithm/Token Type: ERC-20

Consensus Mechanism: N/A

Sector: Payments

Exchanges: Kucoin, Binance, Huobi Global, HitBTC, Huobi Korea, Bittrex, OKEx, Hoo, Bilaxy, Bithumb Global, Digifinex, Bitfinex and Uniswap

Launch Overview

Conceptualised in 2017 by Nuno Correia, Roberto Machado, Filipe Castro and Artur Goulao, Utrust launched with an ICO in November that year, raising ~$17,500,000 for ~275mn UTK at an average price of $0.065 per UTK – the native token to the Utrust ecosystem. The team also raised $1.5mn in a pre-ICO for 50mn UTK at $0.03 per UTK, as well as $2mn in a private sale for 100mn UTK at $0.02 per UTK. Thus, the total raised was ~$21mn for ~425mn UTK.

UTK was created on the ERC-20 standard, with an initial maximum supply of 1,000,000,000 UTK, before a token burn of 500mn UTK slashed the maximum supply in half. Of the remaining ~75mn UTK, 50mn were allocated to the team and 25mn were allocated to the marketing budget. All of the supply is currently in circulation except the 50mn UTK allocated to the team, which is locked until 2022.

Utrust launched its MVP in April 2018, with the project focused on building a comprehensive payments solution and accessible banking platform.

Price-History Overview

Given that UTK has now been traded for almost three years, there is a great deal of price-history available to us for analysis. Whilst I will go into detail in the Technical Analysis section of this report, for now it will suffice to say that UTK formed its all-time low at 100 satoshis in May 2020, coinciding with its all-time low against the Dollar of $0.0054. Regarding its all-time high, against Bitcoin this formed at 9,800 satoshis in January 2018, whilst against the Dollar it formed at $1.41 concurrently.

Project Overview

As stated above, though the Utrust ecosystem is vast and multi-faceted, its purpose is simple and precise: to provide an accessible, comprehensive payments solution and banking platform for e-commerce.

As stated in its original whitepaper:

“UTRUST is a revolutionary payment platform that enables buyers to use their favorite cryptocurrency in order to pay sellers (private or merchants). We provide sellers with the safety and convenience of receiving funds in fiat currency, and offer the best consumer-protection to buyers, by acting as trusted mediators. We combine the best payment protection features of current generation fiat systems with the innovative features of blockchain while blending in the unique features provided by our own token.

The UTRUST Platform aims to provide the consumer protection that buyers take for granted in traditional online purchases, acting as a mediator, resolving conflicts and enabling the possibility of refunds to mitigate fraud, while shielding the merchant from crypto-market volatility. We want to build upon the best features of cryptocurrencies to enable fast transactions, lower fees and low cross-border transaction friction, enabling merchants to sell to a growing worldwide audience of crypto-holders. In summation, we aim to build a payment API for marketplace integration that will become the crypto-contender to PayPal.“

I look forward to evaluating its progress in this respect since the publication of that document three year ago.

Let’s begin with some Metric Analysis:

Metric Analysis:

Below are listed a number of important metrics, all of which are accurate as of 13th October 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: $0.135 (1,175 satoshis)

Circulating Supply: 450,000,000 UTK

Total Supply: 500,000,000 UTK

Maximum Supply: 500,000,000 UTK

% of Max. Supply Minted: 100%

Network Value: $60.811mn (5287.50 BTC)

Network Value at Max. Supply: $67.568mn

Exchange Volume: $2,672,055 ($2,108,833 excluding wash)

Exchange Volume-to-Network Value: 4.39% (3.47% excluding wash)

Category: Midcap

Average Price (30-Day): $0.139

Average Exchange Volume (30-Day): $4,874,477

Average Network Value (30-Day): $62.589mn

Average Exchange Volume (30-Day)-to-Network Value: 7.79%

Volatility* (30-Day): -0.0417

Average Daily On-Chain Transactions (30-Day): N/A

Average Daily Transactional Value** (30-Day): N/A

NVT*** (30-Day): N/A

% Price Change USD (30-Day): -1.1%

% Price Change USD (1-Year): +549.1%

USD All-Time High: $1.41

% From USD All-Time High: -90.5%

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): 13.62 BTC

Liquidity-to-Network Value %: 0.26%

Supply Available on Exchanges: 10,591,181 UTK

% of Circulating Supply Available on Exchanges: 2.35%

*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.

Supply Emission & Inflation:

Block Reward Schedule: N/A (All tokens in existence)

Average Block Time: N/A

Current Block Height: N/A

Annual Supply Emission: 0

Annual Inflation Rate: 0%

Circulating Supply in 365 Days: 450,000,000 UTK (remaining 50mn UTK locked until 2022)

Token Sale:

The following details were taken from this source, this source and via communications with the team.

Public Sale Period: 2nd November – 20th November 2017

Total Tokens: 500,000,000 UTK

Total Tokens Available for Public Sale: ~275,000,000 UTK

Total Raised: ~$17,500,000

Average Price Per Token: $0.065

Total Tokens Sold: ~275,000,000 UTK

Further Details:

Private Sale raised $2,000,000 for 100,000,000 UTK at a price of $0.02 per token.
Pre-ICO raised $1,500,000 for 50,000,000 UTK at a price of $0.03 per token.
The team allocation of 50,000,000 UTK is locked until 2022.

Token Distribution:

ICO: ~275,000,000 UTK
Pre-ICO: 50,000,000 UTK
Private Sale: 100,000,000 UTK
Marketing: 25,000,000 UTK
Team: 50,000,000 UTK

Distribution:

Address Count: 19,496

Supply Held By Top 10 Addresses: 33.42% (~167mn UTK)*

Supply Held By Top 20 Addresses: 37.05% (~185mn UTK)*

Supply Held By Top 100 Addresses: 48.51% (~242mn UTK)*

Inactive Address Count in Top 20 (30 Days of No Activity): N/A

*Excluding smart contracts and exchange addresses, which account for 104.7mn UTK in the top 20, and including subsequent private addresses.

Analysis:

Unlike for many reports, there is a little less material to work through here, for reasons that will become apparent. I’d like to begin by looking at the General metrics before moving onto Supply Emission and Inflation and then concluding this section with some Distribution analysis:

Firstly, let’s take a look at Utrust’s Volatility, which came in relatively low. I calculated its 30-day figure to be -0.0417, which places it 14th-lowest among prior reports. This is indicative of a potential consolidation range, which we will take a closer look at 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 13.62 BTC of buy support within 10% of current prices across listed exchanges (not including $160k of liquidity on Uniswap), equating to 0.26% of its Network Value. This is a modest figure and places Utrust right in the middle of coins previously covered in these reports.

Looking at the sell-side, I calculated there to be 10,591,181 UTK available for purchase on the orderbooks, equating to 2.35% of the circulating supply. Again, this is very much in the middle, relative to previous reports, suggesting that there is no overwhelming desire to sell UTK at any price. This is good for speculators, particularly when one considers that the vast majority of UTK is already in circulation, as clearly the bulk of holders are currently not looking to sell at all.

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

Utrust traded a reported $2,672,055 of Exchange Volume over the past 24 hours, equating to 4.39% of its Network Value; a fairly impressive figure. Unfortunately, it is likely to be somewhat of a false one, although through no fault of the project itself. If we discount the wash trading, Utrust traded $2,108,833 in the past 24 hours, equating to a solid 3.47% of its Network Value. Further, its Average Daily Volume for the past 30 days was $4,874,477, equating to 7.79% of its Average Network Value for the same period. This is promising, as it indicates sustained speculative interest in the project, particularly in the context of a low volatility environment.

Now, with regards to Utrust’s supply emission, in short, there is none. This is due to all UTK being in existence already, with only 50mn UTK of the 500mn UTK maximum supply not in circulation. This remaining amount is the team’s allocation and is locked until 2022. As such, Utrust has no annual inflation, thus no real headwinds for price growth.

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

Looking at the Utrust rich-list, I found that there were 19,496 holders, which is the 11th-highest figure found in these reports.

Of these holders, the top 10 addresses control 33.42% of the maximum supply; the top 20 control 37.05%; and the top 100 control 48.51%. The reason for this being calculated as a percentage of maximum supply as opposed to circulating is because all tokens are already in existence and the vast majority of the maximum supply is circulating, as it is. These figures are excluding smart contracts and exchange addresses, the former of which is the #2 address, which contains the team’s 50mn UTK allocation. Exchanges in the top 20 account for 104.7mn UTK, or 21% of the maximum supply.

Now, where I would usually like to conclude this section by evaluating the activity of the largest holders, due to the recent Kucoin hack, Utrust deployed a brand-new smart contract to ensure users were unaffected, thus there is no data available on activity preceding the activation of the new contract.

Let’s now take a look at the Utrust 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.

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

Twitter Followers: 50,310

Tweets: 1,554

Average Twitter Engagement: 0.49%

Facebook Likes: 12,708

Facebook Posts (30-Day): 16

Average Facebook Engagement: 0.36%

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

Twitter:

Utrust has a relatively large Twitter audience of 50,310 followers, which places it in the top five among coins previously reported on. Despite such a large audience, it still has fairly decent engagement at 0.49%. This is 11x greater than the average across all industries of 0.045% and 18x greater than the average in the Tech and Software industry of 0.027%; relative to other Coin Reports, it is in the top half.

As a side note, Utrust are verified across all socials and clearly take these platforms seriously, with high-quality, consistent content being pushed out. This is great to see.

Facebook:

Now, with regards to Facebook, Utrust has a smaller audience of 12,708 Likes, but the team are clearly committed to keeping this audience informed just as well as on Twitter, with 16 posts in the past 30 days. That said, the engagement here is a little bit weaker despite the smaller audience at 0.36%. This is 4x greater than the average across all industries of 0.09% and 18x greater than the average in the Tech and Software industry of 0.02%. That said, relative to prior reports, it is 17th-lowest.

Discord:

There is no Discord group for Utrust.

Telegram:

The Utrust Telegram group has 7,793 members.

I have summarised the key takeaways from the group below:

This is clearly the community hub, with constant daily discussion. The activity levels in the group are among the highest I have found for Telegram.
Reverse Staking is a concept currently being developed, whereby growth in usage of Utrust will equate to a declining circulating supply. thus creating a deflationary mechanism for UTK.
The community appear to have full faith in the abilities of the team due to high transparency and communication.
SL Benfica was the first merchant accepted for Utrust.
The community actively engage in discussions on the development of Utrust, its future, utility of the platform and the token and other relevant topics, whilst also maintaining discussions on unrelated topics, which is great to see. Often, there is either no relevant discussion and solely chit-chat, or vice-versa. Clearly, this is quite a tight-nit community.
Utrust accept new merchants very regularly – adoption is definitely palpable as the driving force for the team.
The team completed a token swap and deployment of a new contract following the Kucoin hack in order to ensure UTK holders remained unaffected.
In the future, Utrust will release annual token burn reports that will give an indication of Utrust platform usage and growth, whereby a small percentage of transaction fees for cryptocurrency payments via Utrust are burned as UTK. As soon as transactions are made, UTK is bought from the market and once a year these tokens will be burned (this is yet to be activated, however).
Recent merchant integrations include: InnovaFire, PheemMusic, Naturways, SysCorp, StarLanka and Kompakt.

BitcoinTalk:

The BitcoinTalk thread for Utrust was created on August 10th, 2017, and has since generated 12,309 posts spanning 616 pages in 1,160 days. This equates to 10.6 posts per day, on average. However, in the past 90 days, the thread has had 56 posts, giving an average of 0.62 posts per day; a significant decline in engagement, although the thread is still somewhat active.

There is no actual announcement on the thread, with the first post simply linking to the Utrust website.

That concludes my evaluation of the Utrust community.

Let us now take a look 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 Utrust team is comprised of 34 employees, as per LinkedIn, with 10 core team members listed on the website. They are currently hiring.

More specifically, the core team consists of:

As per the whitepaper, the advisory board for Utrust includes:

Marc Howland, Financial Advisor, co-founder and Business Developer at Keyturn
David Bryan, Strategic Advisor, co-founder of Keyturn Public Benefit Corporation
Lilian Yu, Marketing Advisor – China, experienced in product branding and marketing
Sascha Benz, Business Development Advisor, Serial Entrepreneur within e-commerce and mobile
Dhiveshan Govender, Strategic Advisor, Founder and CEO of SVRGN
Joao Figueira, Legal Advisor, Managing Partner at Lugna
Joao Paulo, PhD, Cloud Security Advisor, co-founder of SafeCloud Technologies
Francisco Cruz, PhD, Architecture Advisor, Researcher at INESC TEC and co-founder of SafeCloud Technologies
Francisco Maia, PhD, Distributed Systems Advisor, co-founder and CEO of SafeCloud Technologies

Website:

The website can be found here.

The Utrust website is not really a project website of the sort we more commonly find in these reports. Utrust is first-and-foremost a business, thus its website reflects that, with priorities placed on growing usage of the platform as opposed to educating visitors on the cryptocurrency project that developed the platform. As such, whilst we do find some information here on the team (as covered above) and on prominent partners such as Alternative Airlines, SL Benfica, Luis Onofre, Payrexx, UMT AG and Perfumes.com, the bulk of the website is showcasing the Utrust platform.

The website’s modern design is precisely what I’d expect of such a project, and the innumerable screenshots of the sleek, elegant design of the platform invites users to sign-up, driven by clear displays of the benefits of doing so for both buyers and businesses. I will refrain from going over these in this section, as I cover them a little later, but I do very much believe that the website is designed perfectly for its purpose.

However, in order to learn more about the project and its progress, we must look to the Medium blog, where fairly regular updates are published. Below, I have summarised some key updates from recent Medium posts in order to more accurately determine the progress being made by Utrust:

Utrust recently announced a partnership with NGRAVE, where users will be able to store and transact UTK in cold storage on NGRAVE’s hardware wallet.
Utrust integrated Tether as it first stablecoin in April 2020.
Utrust have released plugins for WooCommerce, Magento and OpenCart, ensuring availability to almost 50% of the e-commerce market.
Utrust were selected to join the Alchemist Accelerator earlier this year, which is the #1 B2B accelerator in the US.
Kompact, the music label, recently joined Utrust as a merchant.
Utrust is being integrated into Upland’s metaverse to allow Upland users to make payments and purchase digital goods and NFTs.
Arms & McGregor International Realty joined Utrust as their first real estate merchant and first Middle East merchant.
Alternative Airlines was announced as a merchant almost a year ago, allowing users to book travel via Utrust.
Utrust have been partnered with Uphold since Q1 2019.
In March 2018, as one of Utrust’s earliest partnerships, UMT AG – the largest mobile payment solution provider in Europe – announced a collaboration in which the two will work together to bring cryptocurrency payments to millions of customers, where UMT reaches over 14mn users.

Roadmap:

Unfortunately, there is no proper roadmap available, in the traditional sense. However, I was able to find a textual roadmap on the Utrust Medium blog.

This roadmap was published in February 2020 and is split into five sections, each corresponding to a different area of future development for Utrust.

The five sections are Automation; Stablecoin and New Merchants; Staking, Cashback and Merchant Referral Program; Building 2021; and Beyond.

Automation occurred in Q1 2020 and saw Utrust focus on scaling their platform by automating on-boarding processes for merchants. This includes settlements, refunds and withdrawals.

Stablecoin and New Merchants began in Q2, with significant growth in merchant on-boarding and an integrated stablecoin.

Staking, Cashback and Merchant Referral Program was the Q3 focus, with cashback and staking features developed and integrated to the Utrust Wallet. Moreover, to continue driving merchant adoption, Utrust began a Merchants Referral Program.

For Q4 2020, Utrust are focused on Building 2021, with the primary takeaway here that Utrust will be using the learning curve of the year to define goals for 2021, with operations focused on growing the platform and improving functionality.

Beyond begins in 2021, with Utrust making it explicit that the team do not work on year-to-year goals, but instead having a long-term vision for the business and the ecosystem. The over-arching goal here is to become a leader in the digital currency revolution.

Though this Medium post highlights some key points regarding the developmental progress and aspirations of Utrust, it would be very useful for a potential new user or speculator to have a more detailed roadmap available, with greater specificity or at the very least some further reading materials linked to each area of development. That said, as is evident from the progress highlighted in the above section, clearly Utrust know what they’re doing and where they’re headed, and – more importantly – how they will get there. It would just be invaluable if a little more of this was shared with the community in one comprehensive resource.

Whitepaper:

The whitepaper can be found here.

It is the original document, published in October 2017, thus is somewhat out-dated. To my knowledge, a more recent document has not been published. I have provided the key takeaways from the whitepaper below:

Utrust is a payment platform at its core – merchants are able to receive fiat payments whilst buyers are able to pay for goods with cryptocurrencies, all whilst retaining the safety mechanisms of fiat transactions.
Utrust act as trusted mediators to provide consumer protections.
Merchants are protected from crypto volatility.
The UTK token will act as a means-of-payment within the Utrust ecosystem, alongside other cryptocurrencies, with the value of UTK tied to the value of the Utrust platform.
Utrust believe current payment platforms are insufficient for optimal transactions and merchant/user adoption.
Utrust allows for mutual trust between merchants and buyers, both of whom benefit from the advantages of cryptocurrency transactions over legacy finance.
On Utrust, merchants are able to accept a multitude of cryptocurrencies but receive their funds in fiat. Buyers can pay with any major cryptocurrency with a small transaction fee or with UTK with no conversion fees. This payment is held for a dynamic holding period that decreases as seller performance increases, as well as a protection period that allows Utrust to mediate conflicts. Funds are then released to the seller, who can withdraw it as fiat to a bank, convert back to crypto or store it in the Utrust wallet.
Buyer Protection is ensured by the amount paid being held until the transaction is validated by the mediator, with refunds assured by Utrust in case of problems with purchases.
Fluctuation Protection is ensured with transparent conversions at market rates.
Sellers have 1% fees on transactions, which is lower than many other e-commerce platforms. Buyers pay a 1% conversion fee for crypto-to-fiat, but no fee on UTK payments.
Unlike PayPal, Utrust accepts multiple cryptocurrencies, ensures safety of funds, has no chargebacks, has a decentralised token linked to the platform, improves upon the efficiency of dispute resolution, has faster payment approval speeds and lower seller fees.

Wallets:

As UTK is 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 desktop clients.

And that concludes my fundamental analysis of Utrust.

Technical Analysis

UTK/BTC

Weekly:

Daily:

UTK/USD

Utrust has now been trading for almost three years, with price having spent the bulk of that period in a downtrend, as is evident from the charts above.

If we look at UTK/BTC, from the weekly we can see that price began pushing higher shortly after initial trading, having set an all-time low at the time of 1,155 satoshis, before rallying to the current all-time high of 9,800 satoshis in early January 2018. From that point, the altcoin bear market began and price fell swiftly back to the low at 1,155 satoshis, printing a double-bottom, rallying into prior support turned resistance at 2,578 satoshis and then rejecting and falling back to support in May 2018. This all-time low soon gave way and became resistance, with price falling to a new low at 405 satoshis in September, with UTK range-bound between that low and 1,155 satoshis as resistance until June 2019. As July came, the low once again gave way, and price slowly bled towards the current all-time low of 100 satoshis in May 2020. Since then, price has began a cyclical reversal, rallying through summer and reclaiming an old level of support at 405 satoshis, before continuing towards that historical pivot at 1,155 satoshis. As you can see from the chart, the reaction as price approached this level reveals all, as the weekly closed firmly back above it and hit 2,040 satoshis before finding any resistance.

If we turn to the daily chart, here we can see this recent action more clearly, with the move above 1,155 satoshis being followed by a pull-back into the level to retest it as support. Price has been consolidating above this level for over a month now, printing somewhat of a bull-flag. Looking at this, if UTK can hold above 1,000 satoshis, I think it is very likely we see upside resolution of the flag and a move towards 2,600 satoshis over the coming months.

Turning quickly to the UTK/USD chart, notice how price had been capped by trendline resistance from the all-time high at $1.40 for over two years before the breakout in Q2 2020, with price now having flipped the prior support turned resistance ~$0.10 as support once more. Looking ahead, holding above this level would suggest to me that a move above $0.24 is coming; close the weekly above that level and there is basically no resistance to the all-time high at $1.40.

I am buying this level with a tight stop on close below $0.098, with an initial target of $0.24 but ultimately looking for that all-time high to be retested. Fundamentally, Utrust is light-years beyond where it was in January 2018, so there is no reason why price shouldn’t retest that level.

And that concludes my evaluation of UTK.

Conclusion

This report is now approaching 5,000 words, and it is time to draw it to a close.

My final grading for Utrust is 8 out of 10.*

*Fundamentally, Utrust is a 9, no doubt about it. However, as a speculator first and foremost (and thus based on my grading framework), there are minor improvements required in several areas that would take it to a 9, one of which simply being that UTK is currently mid-cycle, and so does not present the speculative prospects that it would in a bear cycle. Nonetheless, as I mentioned earlier, I am definitely a buyer here with a clearly defined invalidation level, but I will be looking to enter a larger position in its next cycle. Fantastic progress being made and an efficient, transparent team.

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.

Cryptocurrency Trading | Research | Analysis