Coin Report #15: Ubiq

AD: Before I begin this post, I’d like to briefly mention Bitcoin.Live, who are sponsoring my blog.

Bitcoin.Live offers regular, detailed content on their free-to-access blog, created by a panel of analysts (including Peter Brandt), and covering all manner of market-related topics. I found both the video material and the blog posts to be genuinely insightful, with many differing analytical perspectives available for viewers and readers. The platform also offers premium content for paying subscribers who find value in the free material, with daily videos, alerts and support provided. Check it out and bookmark the blog.

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

Welcome to the 15th Coin Report. In today’s report, I will be assessing the fundamental and technical strengths and weaknesses of Ubiq. This will comprise 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

Unlike the previous two Coin Reports, written on community-selected projects, I am very much familiar with Ubiq, having traded it extensively through 2017. I also held a position in it as recently as August 2018, before exiting on the break of support at ~8500 satoshis. For the sake of full transparency, I re-entered a position in late November 2018, upon mentioning it in in a Market Outlook post, at a price of around 6500 satoshis. That position continues to be held, though I have averaged this somewhat early entry down since.

Poor timing aside, I have always been quite fascinated by what the Ubiq team are doing, and thus much of the research for this post was already completed for my own sake prior to them booking this report in. Having now finished the remainder of the research required, it is quite clear to me where Ubiq’s strengths and weaknesses can be found, and how common it is for this kind of project to fail where it does; spoiler: it isn’t a failure in development.

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

Fundamental

General:

Name: Ubiq

Ticker: UBQ

Algorithm: Ubqhash

Sector: Decentralised Smart Contracts Platform

Exchanges: Bittrex, Cryptopia, Upbit & LiteBit.eu

Launch Overview

Ubiq was launched in January 2017, operating using a purely Proof-of-Work consensus mechanism, originally on the Ethash algorithm. It has since developed and migrated to its own unique algorithm – Ubqhash. The project was launched with no premine or ICO. Ubiq has a fixed monetary policy in place, ensuring that block rewards progressively diminish each year, with the current rate of annual inflation ~5%, eventually decreasing to less than 1%. Keep this in mind, as we shall later discuss its implications for valuation.

Price-History Overview

Given that Ubiq was launched over two years ago, there is plenty of price-history to analyse later in this report. For now, it will suffice to say that several market cycles have played out over that time, with all-time highs against the Dollar forming in January 2018 at around $8, and all-time highs against Bitcoin forming in the summer of 2017 at ~97,000 satoshis. Since this high was set in June 2017, Ubiq has experienced successive lower cyclical highs against Bitcoin, with a price decline that has driven the coin towards prices traded at in March 2017; at the very beginning of its price-history. Perhaps this is an opportunity, but we won’t know for sure until Ubiq’s fundamental and technical components have been adequately evaluated…

Project Overview

Ubiq’s primary purpose as a fork of Ethereum (though operating on its own algorithm) is to facilitate smart contracts, alongside creating an ecosystem of digital assets that exist on its network.

Quoted directly from its one-pager summary:

“The Ubiq network provides a stable blockchain to host an Ethereum Virtual Machine.”

Where Ubiq differs from Ethereum, and seeks to improve upon it, is in its monetary policy, stability and efficiency, all of which we shall delve into a little later.

For now, let us examine some metrics:

Metric Analysis:

Below are listed a number of important metrics, all of which are accurate as of 5th March 2019. 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: $0.21 (5470 satoshis)

Exchange Volume: $475,521

Circulating Supply: 42,609,099 UBQ

Total Supply: 42,609,099 UBQ

Maximum Supply: 50,786,315 UBQ (technically no maximum, so calculated as circulating supply in ~5 years)

% of Max. Supply Minted: 83.9%

Network Value: $8.954mn (2330.72 BTC)

Network Value at Max. Supply: $10.673mn

Category: Midcap

Exchange Volume-to-Network Value: 5.31%

Average Price (30-Day): $0.173

Average Exchange Volume (30-Day): $31,326

Average Network Value (30-Day): $7.366mn

Average Exchange Volume (30-Day)-to-Network Value: 0.43%

Volatility* (30-Day): -0.0098

Average Daily On-Chain Transactions (14-Day): 4490 (source)

% Price Change USD (30-Day): -8.2%

% Price Change USD (1-Year): -94.4%

USD All-Time High: $8.02

% From USD All-Time High: -98%

Premine % of Max. Supply: 0%

Premine Location: N/A

Liquidity (calculated as the sum of BTC in the buy-side with 10% of current price across all exchanges): 3.456 BTC

Liquidity-to-Network Value %: 0.15%

Supply Available on Exchanges: 469,555 UBQ (Bittrex only shows 20 pages of the orderbook)

% of Circulating Supply Available on Exchanges: 1.1%

*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: Current block reward = 6 UBQ, decreasing by 1 every year. See here for more.

Average Block Time: 88 seconds

Current Block Height: 761,831

Annual Supply Emission: 2,105,609 UBQ (~115.17 BTC at current prices)

Annual Inflation Rate: 4.94%

Circulating Supply in 365 Days: 44,714,708 UBQ

Distribution:

Address Count: N/A

Supply Held By Top 10 Addresses: 9.99%

Supply Held By Top 20 Addresses: 16.46%

Supply Held By Top 100 Addresses: 58.41%

Inactive Address Count in Top 20 (30 Days of No Activity): 19

Analysis:

Unlike many of the coins featured in these Coin Reports, Ubiq has no masternode network nor staking functionality, and thus the mountain of metrics is somewhat reduced.

Nonetheless, there is plenty to get stuck into, and I’ll begin by running through the General metrics, before moving onto Supply Emission & Inflation and finally Distribution.

Firstly, I’d like to mention Volatility. Ubiq’s Volatility of -0.0098 is second-lowest of all coins that this has been calculated for previously, behind only Cloakcoin, suggesting that a period of accumulation may well be underway. As of today, we have seen this volatility shoot up as price has broken above the tight resistance it was capped by… we shall dig deeper into this in the Technical section. Nonetheless, this degree of volatility over a 30-day period is precisely what we are looking for when seeking out high-probability speculative positions.

Next up, let us examine the metrics directly related to supply and demand: Liquidity and Supply Available on Exchanges.

Ubiq was calculated to have Liquidity of around 3.45 BTC, equating to 0.15% of its Network Value. This places Ubiq in the middle of the pack amongst coins previously reported on, with weaker relative Liquidity than Cloakcoin, Altbet and Stakenet, for example, and stronger relative Liquidity than Trittium, Bismuth and ALQO.

There are two things that must be taken into consideration here: Firstly, Cryptopia’s recent hack and suspension of trading activities undoubtedly detracts from Ubiq’s Liquidity. Secondly, regardless of this, Ubiq does trade on Bittrex, unlike all three of the coins named that it has greater Liquidity than. As such, I would estimate this to be a moderate degree of demand at current prices.

But how does it fare in its related supply metric? Well, first I must state that Bittrex only displays the first 20 pages of the orderbook on the sell-side, and thus this measure is somewhat inaccurate (though, one could argue that supply in orders beyond this point are actually a positive for speculators, as they indicate an expectation for significantly higher prices in the future).

Nonetheless, there is roughly ~470k UBQ available for purchase on listed exchanges. This equates to 1.1% of Ubiq’s circulating supply, which is a very interesting figure given Ubiq’s lack of staking rewards or masternode network (thus, zero direct profit-incentive to hold).  It is the third-lowest percentage of all coins previously reported on, behind only Trittium and Altbet, despite both having masternode networks and both being on lower-liquidity exchanges.

Now, the caveat to this is that, having checked the Ubiq rich-list, there does appear to be a little under 9m Ubiq in Bittrex addresses, which suggests a couple of things: Firstly, that if any of this supply is in the orderbooks, it is well disguised in the latter pages, beyond our current view. Secondly, such a significant percentage of circulating supply on an exchange indicates a necessity to have immediate access to those funds – perhaps a new bull cycle is indeed imminent?

Moving onto the remaining metrics in this sub-section, let us take a look at price. Ubiq’s all-time high of ~$8 seems so distant from current prices of $0.21. This is a 98% decline. For those like myself who tend to steer clear of high prices despite any fundamental strength, declines like these are precisely what we like to buy into. Perhaps such highs will never be traded again, but this is certainly indicative of a potential bargain entry.

Now, the bulkiest part of this sub-section is, as ever, devoted to volume-related metrics:

Ubiq’s exchange-traded volume over the past 24H is ~$475k, equating to a whopping 5.31% of its Network Value. This is quite frankly stupendous and confirms that there is significant interest at current prices. However, it is, of course, an anomaly (as all accumulation spikes tend to be). Ubiq’s Average Exchange Volume is a more moderate $31.3k, equating to 0.43% of its Average Network Value. This figure again places Ubiq in the middle of the pack of coins previously reported on.

More importantly, however, what is the relationship between Ubiq’s volume and supply emission?

Well, with a current block reward of 6 UBQ, decreasing by 1 UBQ annually, and block times of ~88 seconds, Ubiq’s annual supply emission works out at 2.1mn UBQ (~115 BTC at current prices, or $442,483). This places Ubiq’s annual inflation rate at 4.94% – the third-lowest of all coins from previous Coin Reports.

Now, delving a little deeper, we can calculate the average daily supply emission to be 0.315 BTC, or $1,212 at current prices. Ubiq’s Exchange Volume of $475k covers this almost 400x… but, discount this as an anomaly, even Ubiq’s Average Exchange Volume of $31.3k covers its average daily supply emission by over 2500%; more than sufficient traded volume to sustain current prices. Lastly, Ubiq’s Liquidity of 3.45 BTC covers average daily supply emission by over 11x, thus any declines in price are categorically not due to inflation; rather, they must be the result of distribution, either by large holders or weak hands – the former of which can be identified from the rich-list. When taken into consideration with Ubiq’s supremely low inflation rate, there seems to be near-zero headwinds to price growth.

To conclude this section, let us take a look at Distribution:

Whilst the total number of holders could not be determined, I did calculate that the top 10-richest addresses control 9.99% of the circulating supply; the top 20 control 16.46%; and the top 100 control 58.41%.

Something to highlight here is that I have excluded the 1st-richest, 2nd-richest and 11th-richest addresses from the calculations of the top 10 and top 20’s control of supply, as these are Bittrex, unallocated swap funds and Cryptopia, respectively.

19.4% of circulating supply is on Bittrex and 3.8% of circulating supply is in unallocated swap funds (and thus one could argue discountable from circulating supply overall).

Of the top 20 addresses (discounting #1 and #2, instead including #21 and #22), 19 have been inactive over the past 30 days. Thus, the largest holders have not been accumulating or distributing – at least not for the past month. However, all of them are holding between $46k-$172k-worth of Ubiq at current prices, though, since they have been inactive over the past 30 days, their cost basis was undoubtedly higher than this. The single active address of the top 20 distributed 2,300 UBQ, or 0.5% of position size.

Interestingly, the 52nd-richest added 197k UBQ last month. Also, in April 2018, 6 addresses between the 60th and 70th-richest added 137,707 UBQ each, which lines up with the chart for April 2018, where 5.1mn Ubiq was bought up in a single day.

That concludes this section on Metric Analysis. Onto the Ubiq 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.

Ubiq is present on three of these platforms – all except Facebook. To begin, let’s look at the various social metrics that I calculated from the Ubiq Twitter account:

Twitter Followers: 45059

Tweets: 1271

Average Twitter Engagement: 0.12%

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

Twitter:

As is expressed in this report, the average engagement rate on Twitter across all industries is 0.046%; Ubiq has an engagement rate that is 2.6x greater. Further, the average engagement rate for the Media industry (the most similar industry in the report) is 0.013%; Ubiq’s is 9.23x greater. This is despite Ubiq’s huge following of over 45,000, which is by far the largest of all coins previously reported on (over twice as many followers as that of the second-largest, Cloakcoin). However, whilst impressive relative to global benchmarks, Ubiq’s Twitter engagement isn’t particularly impressive against other cryptocurrencies: in fact, it is the 2nd-lowest level of engagement of previous Coin Reports, greater than only MonetaryUnit.

Discord:

The Ubiq Discord has 5233 members, which is actually smaller than I’d have imagined it to be given the size of Ubiq’s Twitter audience.

Within the group, there is a Welcome channel, providing all relevant links and resources for new users, ensuring accessibility. There is emphasis placed here on the fact that Ubiq was launched with no ICO or premine, that it operates on its own algorithm and that it has its own token ecosystem, with current tokens including DOT, Qwark, GeoCoin and PickleRicks.

Announcements is update once every five or six days, on average, with 5 announcements in the past 30 days. Some of note amongst these include: support of Ubiq on the Guarda wallet; Gubiq development updates; and a quarterly report.

There are also channels for all tokens in the Ubiq ecosystem, plus an entire section of channels devoted to Ubiq itself.

Amongst these, Ubiq is a general chat channel, but only ~40 messages have been posted over the past week, half of which were between team members. Within this, most discussion was focused on development. Ubiq Developers is a much busier channel, where Github commits are pushed throughout the days plus conversation takes place on the topic of these updates, proving that active progress is being made. Here, I found that Go Ubiq (Gubiq) 2.1 is ready for imminent release, and features the largest codebase update ever to the Gubiq full node. What this will bring to Gubiq is serious efficiency improvements across-the-board, including a ~85% decrease in chain storage requirements. Ubiq Marketing is where all PR and team-led updates are pushed out, plus I discovered that Ubiq has applied for listings on Beaxy and Blocknet recently. Ubiq Augmentum is a dedicated channel for Ubiq’s incubator program to ease transition for tokens to the Ubiq network.

Lastly, General is much more active than Ubiq and is where many support queries are answered and conversation takes place daily on all manner of topics. That said, overall engagement for the group is low, given the size.

Telegram:

Whilst the Ubiq Telegram group does contain over 1200 members, it is very much inactive, with only a few messages over the past few months, and with the pinned message directing users to Discord.

BitcoinTalk:

The Ubiq BitcoinTalk thread was created on January 24th, 2017, and has since generated 3286 posts spanning 165 pages in 769 days. This equates to 4.27 post per day, on average. However, in the past 90 days, the thread has had 53 posts via 13 individual posters, giving an average of 0.59 posts per day; a significant decline in engagement.

Regarding the content of the thread, this is mostly team-led updates and developments being pushed out rather than community-led discussion (somewhat of a running theme). There are regular, detailed updates on topics such as the transition to the Ubqhash algorithm; some discussion on mining; integration to Delta Direct; releases of Fusion and Ubiq wallets; the launch of the Escher governance system; the block reward reduction; Guarda integration; and the recent addition of Sphere to Ubiq’s network of tokens.

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:

There are 6 core team members listed on the website.

Of these, there are 4 developers, a business manager and a community manager. The team are fully transparent and there is plenty of information provided on their backgrounds. Overall, the team clearly has strength in development, but perhaps hiring more marketing specialists would help balance this out.

Website:

https://ubiqsmart.com/

Whilst highly informative, with concise and relevant details, the UI/UX is very basic and not particularly attractive as a potential new user. There are also areas where some copy is difficult to read or entirely cut off from our view due to the design. This feels a little unprofessional and certainly unpolished and needs updating. That said, the website does a great job of highlighting the many benefits and strengths of the Ubiq network and ecosystem. The site needs a better navigation menu, however; one that is more structured, to ensure ease-of-use. The social links are also not clear and are shoved out of sight at the bottom right of the homepage – this doesn’t facilitate community growth; if a potential user comes across your website and is attracted by the strengths outlined in the copy, they should be able to seamlessly join a social platform to get more involved.

I do like that there is a dedicated Medium blog with monthly and quarterly reports.

Overall; great content, poor design.

Roadmap:

No roadmap available.

Whitepaper:

https://blog.ubiqsmart.com/ubiq-in-one-page-3e3d335064fc

There is no whitepaper available, but there is this one-pager that I have linked above.

In short, the project’s aims are summarised here:

“The Ubiq network provides a stable blockchain to host an Ethereum Virtual Machine. With several more hard forks planned for ETH’s future, businesses wanting to implement applications on an Ethereum Virtual Machine would be subject to frequent updates and the the risk of instability associated with blockchain hard forks. The Ubiq development team’s commitment and focus on providing a stable and reliable platform, allows customers in finance and enterprise the ability to build today, without worrying about an uncertain tomorrow.”

I am surprised at the lacked of a detailed whitepaper, given the breadth of areas of interest within the Ubiq ecosystem.

Wallets:

Ubiq can be stored on both Ledger and Trezor hardware wallets. There is also a desktop wallet called Fusion for Windows, Mac and Linux, plus a mobile wallet for Android and iOS. Further, there is a web wallet and browser extension. Lastly, there is also Gubiq, which is the core client.

General:

In general, it is clear where Ubiq’s priorities lie; in developing, growing and strengthening its token ecosystem and its smart contract functionality – its two primary aims, as mentioned at the beginning of this report.

The breadth of storage options for users is a massive positive, particularly support on the two most popular hardware wallets. The team is also clearly very experienced on the development front, but there is a lack of balance here that has made itself known through the poor website design, the lack of a roadmap and the low community engagement on social platforms; all of which must be improved to fully capitalise on the fundamental strengths in development.

One thing that does concern me somewhat is that, whilst the existence of no premine or ICO (and the subsequent progress of the project to this day) is very attractive, it does open up a discussion on funding. The project is clearly team-funded alongside community donations, but there are no current revenue streams – at least not that are publicly made known. There is, however, a Network Development Fund, details of which are found in each report published, of around 21 BTC. Ubiq have also managed to survive the bear market as a project despite a lack of consistent funding, which is itself impressive. Nonetheless, perhaps the addition of sustainable revenue streams would be wise.

Technical

Ubiq has been around now for over two years, and during that time several market cycles have played out.

From the Weekly chart, we can see two large market cycles across the two-year period, within which numerous short-term cycles occurred. The all-time high was set ~97,000 satoshis in the summer of 2017, and the following cyclical high in January 2018 was around 53,000 satoshis. Trendline resistance has been in play for the vast majority of Ubiq’s price-history, and, overall, price has continued to decline from the high set in 2017 all the way to the original Weekly Bullish Orderblock from when Ubiq was first listed on Bittrex. This is clearly a significant area of historical support, as just this past week price has rejected it with some strength. In doing so, price is currently breaking out of the shorter-term trendline resistance; a cyclical high from which the price decline occurred on very low volume.

Now, looking at the Daily, we can see more clearly that price has indeed broken out above this trendline resistance from January 2018. Further, we can also see the numerous high-volume spikes that have occurred over the past year. In fact, looking at April 2018, we can see the day on which 5.1mn UBQ was traded; remember from the earlier Distribution analysis that it was during this month that several addresses added ~1.337mn UBQ each to their positions. If this is indeed the price at which so much UBQ was bought (~20k satoshis), is it not likely that price will trade here again in the future?

The Daily 200MA continues to cap price, at present, and UBQ remains below the support turned resistance at ~6k satoshis. There are a lot of resistance levels to clear through before a cylical reversal can be confirmed, however. A Daily close above 9k satoshis would certainly confirm it.

For those less risk-averse, like myself, entries here present ~34% of downside risk, given soft stop losses placed on a Daily close below 3800 satoshis. An upside target, as mentioned earlier, of ~20k satoshis offers 250% of reward, presenting us with a ~7.5:1 reward:risk opportunity.

Conclusion

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

My final grading for Ubiq is 8 out of 10.

As with many development-heavy projects in this space, it is in the marketing department where Ubiq falls short, plus a lack of community engagement despite Ubiq’s large audience and established history. However, speaking first as a speculator, the overall fundamental strength coupled with the metrics and the chart suggest that I am likely no fool for holding a position; at least, not in my view.

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.

If you’ve enjoyed this post and want to receive new posts straight to your inbox, I’ve set up a RSS-to-Email feed that will be sent out weekly; every Monday, 12pm. Just submit your email and I’ll make sure you’re included in the list. Cheers.

Market Outlook #25

AD: Before I begin this post, I’d like to briefly mention Bitcoin.Live, who are sponsoring my blog.

Bitcoin.Live offers regular, detailed content on their free-to-access blog, created by a panel of analysts (including Peter Brandt), and covering all manner of market-related topics. I found both the video material and the blog posts to be genuinely insightful, with many differing analytical perspectives available for viewers and readers. The platform also offers premium content for paying subscribers who find value in the free material, with daily videos, alerts and support provided. Check it out and bookmark the blog.

Market Outlook #25 (3rd March 2019)

Good afternoon, and welcome to the 25th Market Outlook. A violent end to last week has led to some interesting changes in market structure across-the-board, though much remains looking positive for at least this month.

In today’s post, I’ll take a look at the past week’s price-action in Bitcoin, Ethereum and Monero, as well as LBRY Credits, which I believe may be offering a low-risk, high-reward opportunity at present.

Bitcoin:

Price: $3900

Market Cap: $67.972bn

Thoughts: In last week’s Market Outlook, I mentioned that Bitcoin was coming into multiple levels of significant resistance and that we might falter back toward the trendline support that had formed. Sunday night brought a violent dump and with it a break in market structure to the downside. This took price further than I had expected, but it remains supported by the prior area of resistance around $3780.

Nonetheless, the break in market structure cannot be ignored, and price remains bearish short-term – perhaps culminating in another test of the $3780 support – unless we see a 4H close above $3990. This would be a reclamation of bullish market structure, opening up the possibility for price to retest the macro range resistance above $4300.

I did like the strong and fast initial rejection from $3780 a couple of days ago, but there was no follow-through…

This is, in essence, no man’s land, with no clear direction whilst critical support holds firm but 4H market structure remains bearish.

Ethereum:

ETH/BTC

Price: $135.08 (0.035 BTC)

Market Cap: $14.196bn (3,678,624 BTC)

Thoughts: Ethereum has dropped off from the high it formed last week, now looking at retesting the Daily 200MA. Declining volume on this pullback indicates that this is simply relief prior to another leg up. If the 200MA gives way despite price breaking above it for the first time in many months, this would suggest that the trendline support that has formed would likely also give way. I expect this will not be the case, and I remain bullish mid-term, targeting 0.05 BTC over the coming months.

Monero:

XMR/BTC

Price: $48.96 (0.01292 BTC)

Market Cap: $839.218mn (217,610 BTC)

Thoughts: Well, what do you know – Monero remains range-bound for another week. Today, I’ve provided the duration of the range, which is currently over 11 weeks. That is an extensive accumulation period, all of which has occured with continued high volume. Very bullish on a breakout and new bull cycle beginning sooner rather than later…

LBRY Credits:

LBC/BTC

Price: $0.02 (630 satoshis)

Market Cap: $5.235mn (1,359 BTC)

Thoughts: LBRY Credits suffered a more dramatic decline than the rest of the market, falling ~94% from its January 2018 highs but over 98% from its summer 2017 highs. This is undoubtedly due to the inflation rate during this period. However, price has now formed a strong base above 500 satoshis, with high volume buyups occurring on numerous occasions, but price remaining capped by the Daily 200MA. Support at ~620 satoshis has been reclaimed after falling in winter 2017, and entries here have ~25% downside risk, with soft stop-losses on a Daily close below 480 satoshis. An upside target of the resistance at ~1500 satoshis offers ~150% reward, making this a 6:1 opportunity.

That concludes this week’s Market Outlook. I hope you’ve enjoyed the read!

Feel free to leave any comments or questions below.

If you’ve enjoyed this post and want to receive new posts straight to your inbox, I’ve set up a RSS-to-Email feed that will be sent out weekly; every Monday, 12pm. Just submit your email and I’ll make sure you’re included in the list. Cheers.

Coin Report #14: Cashaa

AD: Before I begin this post, I’d like to briefly mention Bitcoin.Live, who are sponsoring my blog.

Bitcoin.Live offers regular, detailed content on their free-to-access blog, created by a panel of analysts (including Peter Brandt), and covering all manner of market-related topics. I found both the video material and the blog posts to be genuinely insightful, with many differing analytical perspectives available for viewers and readers. The platform also offers premium content for paying subscribers who find value in the free material, with daily videos, alerts and support provided. Check it out and bookmark the blog.

N.B: The following Coin Report on Cashaa is community-selected. Cashaa placed 2nd in the recent poll; Bettex won; and NKN placed third. Last week, I published a report on Bettex, and NKN will also have a report written over the coming weeks.

Welcome to the fourteenth Coin Report. In today’s report, I will be assessing the fundamental and technical strengths and weaknesses of Cashaa. This will comprise 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

Prior to researching this report, I had no idea what Cashaa was. In truth, after last week’s community-selected Coin Report on Bettex, I was a little worried that this one might follow suit in the mediocrity of many aspects of the project; having completed my research, I’m happy to say that I was wrong, but we’ll come to all of that a little later…

Unlike the majority of the reports I publish, this one is focused on an ERC-20 token that was funded via ICO. The only other Coin Report featuring an ICO was the one written on Covesting. As such, I will reference it on occasion to provide more accurate comparisons and evaluations.

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

Fundamental

General:

Name: Cashaa

Ticker: CAS

Algorithm: ERC-20

Sector: Banking Services Platform

Exchanges: HitBTC, TopBTC, Exrates & IDEX

Launch Overview

Cashaa was incorporated as a company in 2016 in London, but raised funds via ICO (and thus created its token) in November 2017. CAS – Cashaa’s native token – was created as an ERC-20 token, with a maximum supply of 1bn. Of these, 365mn CAS were locked for development, whilst the remainder were available for sale. The ICO raised $18.3mn, with an initial cost of $0.10 per CAS (prior to bonuses), with 542mn CAS distributed. The company refunded over $14mn of funds due to strict KYC procedures.

Price-History Overview

Cashaa has around 12 months of available price-history, setting an all-time high against BTC ~2000 satoshis in February 2018. It also hit it s all-time high against the Dollar around the same time at $0.20. Since these highs, CAS has followed the trajectory of the overall market in its decline, with a short bull cycle occuring in the summer of 2018; the price of the token has, however, continued to bleed. We’ll get into the nitty-gritty details of this in the Technical section.

Project Overview

As a project, Cashaa has a clear identity and path, seeking to become a leading banking services platform that bridges the current gap between the traditional financial system and the use of cryptocurrencies.

Though admirable and undoubtedly one of value, the goal is somewhat broad and highly competitive. We shall see how Cashaa is faring soon enough…

Metric Analysis:

Below are listed a number of important metrics, all of which are accurate as of 26th February 2019. 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: $0.007 (175 satoshis)

Exchange Volume: $29,519

Circulating Supply: 606,355,312 CAS

Total Supply: 606,355,312 CAS

Maximum Supply: 1,000,000,000 CAS

% of Max. Supply Minted: 60.64

Network Value: $4.1mn (1061.12 BTC)

Network Value at Max. Supply: $6.762mn

Category: Midcap

Exchange Volume-to-Network Value: 0.72%

Average Price (30-Day): $0.008

Average Exchange Volume (30-Day): $200,504

Average Network Value (30-Day): $4.978mn

Average Exchange Volume (30-Day)-to-Network Value: 4.03%

Volatility* (30-Day): -0.03579

Average Daily On-Chain Transactions (30-Day): 14.07

Average Daily Transactional Value** (30-Day): $19,729 (source)

NVT*** (30-Day): 207.82

% Price Change USD (30-Day): -2.4%

% Price Change USD (1-Year): -94.6%

USD All-Time High: $0.20

% From USD All-Time High: -97%

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): 0.781 BTC

Liquidity-to-Network Value %: 0.07%

Amount Available on Exchanges: 8,677,174 CAS

% of Circulating Supply Available on Exchanges: 1.43%

*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 CAS and multiplying it by 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: Zero inflation, as Cashaa was created as an ERC-20 token with an ICO.

Average Block Time: N/A

Current Block Height: N/A

Annual Supply Emission: N/A

Annual Inflation Rate: N/A

Circulating Supply in 365 Days: N/A

Distribution:

Address Count: 12,373

Supply Held By Top 10 Addresses: 41.34%

Supply Held By Top 20 Addresses: 55.46%

Supply Held By Top 100 Addresses: 73.7%

Inactive Address Count in Top 20 (30 Days of No Activity): 18

Analysis:

Unlike the majority of these reports, Cashaa does not have quite the same barrage of metrics to evaluate, given its ERC-20/ICO status. Despite this, there are several important points to highlight; the first of these being the metrics related to transactions:

As CAS is a utility token, it is important to determine the extent to which it is currently being utilised. Using the Etherscan explorer, I found that Cashaa averaged ~14 daily on-chain transactions over the past 30 days. Whilst this is a fairly low number of transactions, it did equate to around $20,000 of on-chain transactional value, giving CAS a NVT of 207.82; around 75% greater than the NVT of Bitcoin at present. Though not necessarily indicative of undervaluation, this is not particularly high, as utility tokens go.

For the rest of this section, I’ll run through the remaining General metrics, followed by Supply Emission & Inflation and finally Distribution.

First up, let’s take a look at Volatility, which I calculated to be -0.03579. This is the second-lowest degree of volatility of the the coins I have calculated it for, suggesting that we may be in an accumulation range; something that can only be confirmed by looking at the rich-list and the chart.

Next, let us take a look at the supply-and-demand-related metrics:

On the demand-side, Cashaa scores rather poorly, with Liquidity of 0.781 BTC, equating to 0.07% of its Network Value. This is the lowest figure for liquidity of all coins previously reported on, suggesting that overall demand at current prices is low.

On the supply-side, there is ~8.7mn CAS available for purchase on exchanges, equating to 1.43% of the circulating supply. This places CAS in the middle of the pack, relative to other coins that this has been calculated for; that said, all of the coins with less supply available on exchanges (Trittium, Altbet and Bulwark) operate with masternodes, providing reward incentives for holders – Cashaa does not.

Now, let us look at the metrics related to price:

Cashaa’s all-time high of $0.20 means that it is currently trading at a ~97% discount, suggesting that there is potentially a low-risk, high-reward opportunity here if the fundamentals and technicals give us a reason to buy.

What about volume, however?

Well, Cashaa experienced $29,519 of Exchange Volume over the past 24 hours and a whopping $200,504 on average daily for the past 30 days. This gives CAS an EVNV of 0.72% and an Average EVNV of 4.03%. Whilst the former is nothing noteworthy, the latter is the third-highest of any coin previously reported on; and certainly indicative of interest at current prices, conflicting with the Liquidity metric.

Now, as Cashaa is an ERC-20 token that was funded via ICO, there is zero inflation. This means there are no headwinds to price growth via daily supply emission; the caveat to this is that 365mn CAS are locked, and when they come into circulation, they will provide some degree of headwinds, though this is guaranteed to be less than 35% inflation.

To take the worst possible case for headwinds to price growth, let us assume all 365mn CAS come into circulation over the next 12 months (this is not the case, as these tokens are released in predetermined percentages at various times). 365mn CAS at current prices is 638.75 BTC, or ~$2.46mn, which equates to 1.75 BTC of average daily supply emission ($6,762). Cashaa’s Exchange Volume and Average Exchange Volume would cover this supply emission by 4.37x and 29.65x, respectively. This indicates that there is plenty of volume to sustain current prices. However, there is not enough Liqudity, as Cashaa’s buy support of 0.78 BTC within 10% of current prices is less than half of the possible average daily supply emission. I stress that this is the worst possible case, and does not follow the release schedule detailed in the Cashaa whitepaper.

To conclude this section, let us take a look at Distribution:

The top 10 richest addresses control 41.34% of the supply; the top 20 control 55.46%; and the top 100 control 73.7%. This is the least decentralised supply amongst the top 100 addresses of any coin previously reported on.

Of the top 20 addresses, 18 are inactive across the past 30 days. Of the remaining 2 addresses, the 8th-richest has added 21mn CAS this past month, and the 18th-richest has added 9mn this past month. The majority, in conclusion, are seemingly comfortable with their positions. Importantly, there is zero distribution occuring amongst the largest holders at current prices.

And that concludes this section on Metric Analysis. Onto the Cashaa 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.

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

Twitter Followers: 10,018

Tweets: 1169

Average Twitter Engagement: 0.18%

Facebook Likes: 15,979

Facebook Posts (30-Day): 27

Average Facebook Engagement: 0.05%

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

Twitter:

Whilst the Cashaa Twitter account does boast a moderately-sized audience, it does not experience the engagement expected of Twitter accounts in the cryptosphere. That said, in RivalIQ’s report, we find that the average Twitter engagement rate across all industries is 0.046%, which means that Cashaa’s engagement rate is currently 3.91x greater. Further, the average engagement rate for the Media industry (the most relevant in the report) is 0.013%, thus Cashaa’s is 13.85x greater. However, its engagement rate relative to other cryptocurrencies is quite poor, coming joint second-bottom with GeoCoin of all coins reported on.

Facebook:

Facebook, unlike for many cryptocurrencies, is Cashaa’s largest audience, with close to 16,000 likes. They also commit to regular updates, with 27 posts in the past month. However, once again, it is the engagement that lets them down, with a 0.05% average engagement rate over the past 30 days. This is suggestive of low levels of active community interest at present, despite the large followings on social platforms…

Cashaa’s average Facebook engagement rate is also lower than the average across all industries of 0.16%, and lower than the Media industry average of 0.08%. Not particularly encouraging.

Telegram:

The Cashaa Telegram, however, is very much engaged, with over 100 individuals involved in the constant discussion that takes place, amongst a group of 6407 members. This is undoubtedly the hub of the Cashaa community; the downside of this not being on Discord is that there is a barrage of messages to work through to figure out anything about the project, unlike the clearly delineated and structured channels in a Discord group. That said, the pinned message contains all relevant links and some concise points about the project itself.

As for the community, there does seem to be an overwhelming focus on the price of the token, perhaps because it is ~94% from its ICO price. There is some degree of PR material and conference recordings that are pushed out, including the recent exhibition at Blockchain Summit India. Regarding issues, one member pointed out that there is an issue with IBAN being provided for Business account holders only on the Cashaa platform, rather than Personal account holders – we shall dig into this a little later…

Users are generally happy with support provided by the team; with wallet functionality; and with the wbesite itself. As I say, much of the conversation and thus the issues stem from the price of the token.

In the group, I did discover that the Cashaa CEO, Kumar Gaurav, is also Chairman of Auxesis Group; one of the largest blockchain companies in India. I also found out about an exchange listing on Next. In general, however, it was rather difficult to learn about the project in this social channel, as there is very little discussion on the components of the project.

Importantly, however, and regarding the Blockchain Summit, I did find out that Auxledger (created by Auxesis) have up to 60m active users in India, and that Cashaa will be moving its token to Auxledger’s network from Ethereum.

There is also an official Cashaa channel, with 1741 member, which
pushes out regular updates and PR material.

BitcoinTalk:

The Cashaa BitcoinTalk thread was created on October 15th, 2017, and has since generated 546 posts spanning 28 pages in 499 days. This equates to 1.09 post per day, on average. However, in the past 90 days, the thread has had 6 posts, giving an average of 0.066 posts per day.

Very much inactive.

Development:

For the following Development analysis, I will be evaluating project leadership, the website, the roadmap, the whitepaper and the wallets:

Project Leadership:

There are 20+ team members listed on the website and 12 advisors.

The CEO, Kumar Gaurav, is also the Chairman of Auxesis Group, as previously mentioned. Overall, the team has a lot of cumulative experience in development, management and marketing, which is great to see. Amongst the advisors, Bernard Lietaer, John Henry Clippinger and Tim Campbell are of note, with much of the board having senior experience in companies/environments like Visa and MIT. Overall, very impressed with the strength, depth and balance of the team and board.

Website:

https://cashaa.com/

The website is professional, full of relevant information and well-designed. There are details given on the various membership plans. The UI/UX is smooth and clean, with all social links available, as well as a regularly updated Medium blog.

I also signed up for the platform to test it out and found that it was certainly functioning and easy-to-use. The dashboard featured the multicurrency wallet. Overall, I was just happy to see a working product after an ICO.

Roadmap:

https://cashaa.com/#/road-map

The full history of Cashaa is available from 2016 at the click of a button, with an accessible, sleek roadmap design. Further info links are provided, and the content is detailed and concise. The roadmap itself is segregated by
month with progress visible. I’ll refrain from going through the whole roadmap, as it is extensive, but I’ve provided brief snippets below:

Cashaa Limited was founded in London in June 2016.

Jan/Feb 2018: KYC/AML policy development; won Technology
Provider of the Year award at Small Business Awards in New Delhi.

March/Apr 2018: Regulatory compliance finalised; 8507 participants
able to buy CAS tokens in ICO, with remaining participants refunded $14.37m; token audit and distribution; 365m CAS locked with 3-year
vesting period; development of banking functionality; team grew to 28
including staff from HSBC, Barclays etc.

May/June 18: OCT exchange live; FCA regulation underway; African Payment Alliance partners Cashaa with 40 African countries via financial services companies; First Business account users onboarded (Populous World & BoonTech); Bonus tokens distributed to holders (total 192m CAS available over multiple instalments); TechCrunch nomination for Hottest Crypto Finance Project.

July/Aug 2018: Cashaa Compliance API testing; e-KYC for business
customers; wallet functionality development; TopBTC listing.

Sep/Oct 18: Invited to BBVA HQ to present their platform.

Nov/Dec 18: Membership plan details released; Compliant Multisig cryptocurrency wallet goes live; CAS STAKE begins; Business customer onboarding in the UK & EU.

Jan-Mar 2019: All of these are to be completed: Functionality to buy cryptocurrencies with card payments; Business API; rebranding of website + marketing campaign; Asia Business customer onboarding; Phase 1 business account issuance; Personal account onboarding.

Overall, I am once again impressed not only by the presentation of the roadmap but particularly by its content; plenty to be excited about and plenty that has been accomplished.

Whitepaper:

https://cashaa-cdn.s3.amazonaws.com/cashaa/pdf/cashaa_wp_v2.pdf

The document is 40 pages long, which seems rather excessive. That said, it is very professional in its format.

The Executive Summary focuses on the problems of traditional banking and those that it leaves in the dark – cryptocurrencies can solve said problems but are struggling to at present “due to poor usability, non consumer-centric approach and improper legal implementation.”

Vision and Mission: Cashaa’s focus is on providing financial services to businesses and individuals.

Problem: Some of the copy here is broken and in need of proof-reading. The section discusses how traditional banking does not have the infrastructure or understanding of digital assets required and relies on its old infrastructure: there is a lack of AML/Compliance API for cryptocurrencies; and for businesses/individuals involved in crypto, there are no banking services available; plus the gateways between fiat and cryptocurrencies are still being built.

Solution: Cashaa’s solution to the aforementioned problem is a single account for old and new money systems. One thing I didn’t like here is: “World needs Cashaa solution!!” – this just reads as unprofessional and is written in broken English. The tagline is “Global Multi Currency Crypto Friendly Banking Platform.”

Products: Cashaa’s products are a single-sign-in platform and mobile app that will provide services like IBAN, a multicurrency wallet, corporate and personal debit cards, and CAS-Invest. Each account with Cashaa will be assigned an IBAN but will be functional for multiple currencies. CAS Tokens will be “used and/or earned”: owning CAS allows customers to get a free IBAN account; increase account limits; enable free local/international
transfers; and free foreign exchange. There are five plans: World Traveller; Premier; Smart Value; Basic; Blue (each attributed to holders of 1mn CAS, 500k CAS, 50k CAS, 25k CAS and 0 CAS, respectively).

There is also a 3-key multi-signature wallet with inbuilt AML. The aim of this will be to increase transactional ease and convertibility. Plus, CAS tokens will reduce transaction fees and allow fee-free reversals.

About Cashaa: The company was founded in 2016, and is based in London, with other offices in Estonia and Mumbai. There is 200+ years of cumulative experience amongst the team.

Token: CAS, the token, was launched with a 1bn maximum supply, with 365mn locked for the team and development. 542mn CAS were distributed in the ICO, at a cost of $0.10 per token, prior to any bonuses. This works out at 244 satoshis, or 6632 ethtoshis.

Overall, the whitepaper is very useful, informative and well-written but should be shorter; there is lots of repetition.

Wallets:

As an ERC-20 token, Cashaa can be stored on all ERC-20-enabled Ethereum wallets.

Technical

Whilst Cashaa made its all-time high against Bitcoin at the very beginning of its price-history, it also experienced a mini cycle in the summer of 2018, where the cyclical high of 1200 satoshis was formed. Since then, price has bled along with the rest of the market, with a bottom eventually being found at 120 satoshis. From this point in September 2018, Cashaa has experienced continually rising volume despite price being range-bound between 120 satoshis and 280 satoshis for the vast majority of the past 5 months.

Regarding risk-reward, entries here would have ~25-30% of downside risk, with soft stops placed in case of a Daily close below 120 satoshis. An upside target of the recent cyclical high at 1200 satoshis gives a potential reward of ~680%. This gives a whopping reward:risk of 22:1. Of course, with price making lower highs even within this range, there is a significant chance that the low at 120 satoshis does not hold. Conservative traders could await a breakout on volume before entering a position.

Conclusion

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

My final grading for Cashaa is 8 out of 10.

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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