Welcome to the second Coin Report. This report provides an extensive examination of the fundamental and technical strength of ALQO. If you missed the first Coin Report, which covered GeoCoin, you can find it here. In that first report, I spent some time introducing and explaining the framework for this series of posts, so new readers may find it useful to at least take a quick look at those opening paragraphs to get an idea of what they can expect from the lengthy report that follows.
The first Coin Report was incredibly well-received, and the process of writing it was not only invaluable to myself but also seems to have been rather informative to many of you. I hope this report on ALQO lives up to scratch. Enjoy.
ALQO (A Liquid Object) has long been an altcoin of some repute among those of us that value old-school, no ICO, Proof-of-Work/Proof-of-Stake low-caps. I first found out about it early this year, but found that the project was a little too expensive to get involved in, and thus my interest in it faded and I forgot about it for many months. Then, July came around, and I noticed that ALQO had dropped off towards pre-euphoria levels (much like the rest of the market), and so I picked up my first few. In hindsight, a ~3500 satoshi entry was a little early, but it certainly felt more reasonably priced than when I first glanced at the chart earlier in the year.
Fast-forward to today, and I am still buying. I had done my usual amount of fundamental research and I knew I loved the chart; but, having learnt a lot about GeoCoin that I was previously unaware of after writing my first Coin Report, I figured that it would be useful to do a deep-dive on ALQO, and garner as full an understanding as I possibly could about an altcoin I thought showed huge upside potential.
There is, indeed, much to talk about concerning ALQO, given its grand ambitions and the extensive portfolio of current and future developments. I hope the following report will prove as exhaustive as that first report, if not more so.
If you’d like to find out more about the coin, prior to reading the report, here are some of ALQO’s primary links:
Sector: Financial & Cloud Services
Exchanges: CoinExchange and CryptoBridge
ALQO was launched in November 2017, and, as such, has only experienced one full market cycle, with the peak coming in mid-January. I’ll discuss where I think price is at regarding the current market cycle more extensively in the Technical section, a little later; but, almost twelve months on from its launch and subsequent run-up, ALQO is once again showing signs of life.
The project began with a Proof-of-Work consensus mechanism, no ICO and a small premine of 100,000 XLQ (about 0.16% of the maximum supply), much like the altcoins of 2014/15. This premine, as stated in ALQO’s whitepaper, was used exclusively for the purposes of setting up a network of masternodes off-the-bat, and it is scheduled to be burned on November 1st (a week from now). Further, the initial Proof-of-Work stage has recently ended, with a transition to Proof-of-Stake occuring around 80,000 blocks ago. This transition has brought with it further incentive for the speculator to begin to build a position, as we’ll discuss later when examining supply emission and inflation rates.
As a project, ALQO has ambition, to say the least. Unlike GeoCoin, which was very much focused on a micro-niche, ALQO is targeting on the grandest of scales; with the aim being global acceptance as a means of payment and the development of a comprehensive financial and cloud services ecosystem. Big dreams require equivalent talent, consistency and no small amount of luck. There are hundreds of altcoins with similar goals, but, as far as I can see, few of them (particularly in the low-to-midcap range) have delivered as much in so short a time, as we’ll discover in a short while.
Below are listed numerous metrics of significance, which I will analyse and evaluate at the end of this section. Firstly, it is important to note that these metrics are accurate as of 24th October 2018. Secondly, if any of the terms or figures seem unfamiliar or confusing, there is a short passage with explanations of the following metrics in the Metric Analysis section of the GeoCoin report, which you can find here. Thirdly, because of the very limited functionality of the ALQO explorer, it wasn’t possible to accurately determine Transactional Volume, so that and any relating metric has been omitted, including NVT. Further, it wasn’t possible to assess the rich-list due to this, so distribution analysis is limited. It is also not possible to find out the Network Staking Weight. In short, they need a more useful explorer or a wider range of explorers to choose from. Lastly, the masternode-related metrics are sourced from https://masternodes.online/currencies/XLQ/.
Price: 3196 satoshis ($0.21)
Exchange Volume: $30,049
Circulating Supply: 59,291,514
Total Supply: 59,291,514
Maximum Supply (Reported): 63,816,840
% of Max. Supply Minted: 92.91
Network Value: 1894.96 BTC ($12.273mn)
Exchange Volume-to-Network Value: 0.24%
Average Price (30-Day): $0.19
Average Exchange Volume (30-Day): $19,298
Average Exchange Volume (30-Day)-to-Network Value: 0.18%
Network Value at Max. Supply: $13.210mn
% Price Change USD (30-Day): +3.6%
% Price Change USD (1-Year): N/A
USD All-Time High: $2.94
% From USD All-Time High: -92.9%
Premine Allocation: https://explorer.alqo.org/block/00000644bf4c94d8f717f3ed31e6d28d96ce7e7ba321d69c54aceb4c60e3d77b
Liquidity (calculated as the sum of BTC in the buy-side within 10% of current price across all exchanges): 2.306 BTC
Liquidity-to-Network Value %: 0.12%
Staking & Masternodes:
Network Staking Weight: N/A (the wallet and the explorer don’t provide this information)
Staking ROI (Annual): 65.9% (according to http://126.96.36.199/alqo/index.php)
Masternode Price: $2,070
Masternode Collateral Size: 10000 XLQ
Masternode Count: 2952
Masternode Count Growth (30-Day): +8.74%
Masternode ROI (Annual): 53.15%
Masternode Reward / Block Reward: Libra Effect dynamically increases or reduces the percentage according to the number of masternodes online. See: ALQO Whitepaper, or later sections discussing it.
Masternode Network Value: $6,110,640
MNV / Network Value: 49.79%
Supply Emission & Inflation:
Block Reward Schedule: 60-second blocks. 50 XLQ per block for next 30205 blocks (21 days). 25 XLQ per block for following 43199 blocks (30 days). 10 XLQ for 43199 blocks (30 days). 5 XLQ per block thereon (from Block 604801).
Remaining Days Before 5 XLQ Blocks (Block 604801): 81
Remaining Supply Emission Before 5 XLQ Blocks: 3,022,215 XLQ (96.59 BTC)
Inflation Rate (For Next 81 Days): 5.1%
Circulating Supply At Block 604801: 62,313,729 XLQ
Annual Supply Emission After Block 604801: 2,628,000 XLQ (83.99 BTC)
Annual Inflation Rate After Block 604801: 4.22%
Circulating Supply in 1 Year: 64,358,529 (different to reported max. supply)
Network Value in 1 Year at Current Price: $13.515mn
Supply Held By Top 25 Addresses: 10.23%
Supply Held By Top 50 Addresses: 13.1%
Supply Held By Top 100 Addresses: 15.77%
So, there’s a seemingly endless number of figures to wrap your heads around, but which are the most relevant and most significant? Given the goals of the ALQO project, one would have to say that one of the most insightful metrics (concerning means-of-payment) is unfortunately missing from the list. That is, of course, NVT and Average NVT. If ALQO seeks to be accepted as a global currency in the long-term, then Transactional Volume is more important than Exchange Volume. But given that this information is very difficult to determine due to the limited functionality of the sole ALQO block explorer, we must, regretably, move on. There is plenty to talk about.
Let’s start with the more general metrics: the first figure that stands out is the % of Max. Supply Minted. The fact that almost 93% of the supply is already in existence is a point-of-interest for any shrewd speculator. This, as should be evident, means that remaining supply emission is severely limited, and thus the headwinds for appreciation are barely noticeable. If you take another look at the collection of figures on Supply Emission & Inflation, notice how there are ~81 days (less than 3 months) remaining before ALQO block rewards decrease to their final (and lowest) stage of 5 XLQ per block. In that time, a little over 3 million XLQ are estimated to be minted; the equivalent of 96.59 BTC, or 5.1% of current circulating supply. That equates to an average daily supply emission of 1.19 BTC (for this remaining period. Now, let’s take a look at the Exchange Volume and Average Exchange Volume figures: the former is ~$30,000 and the latter is closer to $19,000. That means that the average daily volume over the past 30 days is ~240% greater than the supply currently being minted daily. This is a good sign of sustained demand, and especially when taken into consideration with the fact that price is up in $ over the past 30 days by 3.6%. This suggests that the current level of demand is very much likely to soak up the remaining 81 days-worth of supply prior to the final block reward stage beginning at block 604801. Now, if you thought 5.1% inflation for the next few months was impressive, take a look at the levels of supply emission post-block 604801: 4.22% annually (0.23 BTC per day at current prices… an amount that can be covered over 10 times with current Liquidity). This all speaks volumes for the upside potential of ALQO. As a speculator, I seek opportunities for maximal profit with minimal risk, usually over the course of many months, if not over a year. These figures present that opportunity, in my opinion.
Where I find some room for improvement, concerning the General metrics, is in the Volume-to-Network Value ratios. As with GeoCoin in the previous report, these figures are much lower than I generally like to see, but, given that we remain in a macro bear market (though signs of reversal are beginning to appear), this is somewhat forgiveable. Also, I believe this is at least in part due to ALQO only being listed on two relatively small exchanges in CryptoBridge and CoinExchange. Listing on more volume-heavy exchanges (perhaps KuCoin, LiveCoin or Mercatox?) would, I believe, bring these figures closer towards the 1% level that implies significant interest. And, before we move onto the metrics concerning masternodes, I think the 0.16% premine is noteworthy in its slightness. Rarely now do I come across launches with so small a premine, and, what’s more, with a clearly detailed justification for it plus a date for its burning. The 100,000 XLQ from the premine are scheduled to be burned in about a week, according to the whitepaper.
Okay, so the General metrics and the supply emission schedule seem to be pointing towards a promising opportunity, at least on the mathematical front if not the fundamental. But, given that ALQO has masternodes, the less useful market cap (or Network Value) figure can be disregarded in place of the Masternode Network Value, which I discuss at length in my blog post titled The Speculator’s Guide To Masternodes and Masternode Network Value. Where Network Value is often vague and sometimes useless in assessing value or determining demand, MNV gives you a more accurate overview. ALQO has an MNV of ~$6.11mn at current prices, which is the total value of all online masternodes. This represents just under 50% of the circulating supply of ALQO, and hence it must follow that almost 50% of the circulating supply has been purchased directly (not merely mined or minted in any other way). Whilst MNV doesn’t account for the various prices at which this supply may have been purchased at, it provides a clearer picture of demand for ALQO, with ~50% being a strong ratio of MNV / Network Value. Further, in the last 30 days, the Masternode Count has grown by almost 9%. This equates to roughly half a million dollars-worth of ALQO being bought in the previous month for the express purposes of running a masternode. Further signs of strength being exhibited here. However, where ALQO as a project continues to show weakness is in its explorer functionality… I was unable to determine network staking weight using either the local wallet, ALQO block explorer or the staking-specific (though very limited) explorer linked in the Discord group. As such, thorough staking analysis could not be undertaken and accurate staking ROI figures could not be calculated; I have used the annual % figure provided on the explorer.
Finally, we come to the Distribution metrics. My apologies for these being sparse, but, once again, the block explorer has let us down. Rich-lists are unavailable and the only distribution figures available are those concerning supply held by the top 100 addresses. I had a similar problem in the last report with (the lack of) rich-list analysis. Hopefully, in future reports this won’t be a recurring theme of otherwise strong altcoins. Anyway, let us make do with what we have, and what we have is as clear a picture of the definite decentralisation of ALQO as one could get. The top 100 addresses control a mere 15.77% of the circulating supply. This is about as low a figure as I’ve ever seen for an altcoin. They’ve certainly held up their promise of pushing the decentralisation of supply, but I do wish I could do an in-depth examination of the activity of those top 20 addresses. Oh well.
That concludes my analysis of the metrics. Onto the ALQO 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.
Concerning social media presence, there are five main platforms to examine: Twitter, Facebook, Telegram, Discord and Slack.
ALQO doesn’t have Slack, but is present on the other four. Slack seems to be going out of favour with the crypto-community, in general. To begin, let’s look at the various social metrics that I calculated from the ALQO Twitter and Facebook accounts:
Twitter Followers: 7158
Average Twitter Engagement (30-Day): 1.3%
Facebook Likes: 204
Facebook Posts (90-Day): 1
Average Facebook Engagement (90-Day): 3.43%
As discussed in the GeoCoin Coin Report, RivalIQ release a yearly report on benchmark social metrics across various industries. ALQO’s 1.3% Average Twitter Engagement rate is exactly 100x greater than the average for the Media industry and 28x greater than the average across all industries. This is promising. What is less promising is the lack of commitment to Facebook, with the ALQO team having only posted once in the previous 90 days; a weakness that is evident from the 204 Facebook Likes compared to the 7158 Twitter Followers. For that single post, however, there was a 3.43% engagement rate… but there’s little than can be gathered from such a small sample size.
Moving on to Telegram, ALQO has a group containing 1575 members. This is a mid-sized group for altcoins, as there are many projects that have groups of well over 5000 members at a similar age and network value to ALQO. The discussion is primarily support-focused, with community questions and concerns being raised by over 50 individual members over the past week. These questions are promptly answered. I did also spot a little community input on future marketing campaigns, which was another promising sign. If I had to score the Telegram group out of 5, I’d give it a 4. The conversation is there but the scale isn’t.
The ALQO Discord, however, is a different beast entirely. With 6114 members, it towers over the ALQO Telegram and even over the Ubiq Discord, in which GeoCoin operates. There is clearly a very vocal community, and admins are incredibly responsive. The existence of numerous channels makes discussion flow constantly, seemingly 24/7, and allows for ease-of-use for any newbies. This clear delineation between topics of interest is a big plus; all too often do I see groups with three of four channels, commonly named General, Announcements, Trading and Miscellaneous. Not very useful that. There also appear to be a consistent stream of development updates and announcements, and project resources have their own channel for greater accessibility. I particularly liked seeing the existence of community-led updates, specifically video round-ups of the previous week’s ALQO news. Overall, thoroughly impressed. 5 out of 5.
After evaluation of the Discord group, it was always going to be difficult to find a similar level of constant engagement and discussion of ideas elsewhere, but the BitcoinTalk thread did well enough. Having launched in November 2017 (almost a year ago to-date), ALQO has generated 84 pages of conversation, with 1662 posts. More recently, there have been 140 posts by 52 individual posters in the past 90 days – a post-to-poster ratio of 2.69. Taking the entire history of the thread into account, ALQO generates an average of 138 posts per month; an average they have fallen under of late. However, what was more promising was the overt statement-of-intent by the team to refocus attention on BitcoinTalk. In general, conversation was community-led, focusing on support questions, as would be expected of a thread.
Overall impression of the ALQO community is one of evident commitment and genuine excitement towards the project.
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:
According to the website, there is a permanent team of 7, with 3 executives and 4 other members. Backgrounds seem strong across-the-board, particularly for the 3 leading members of the team. When taken into consideration with the strength and size of the community, I believe the project is in a strong position concerning leadership. Furthermore, it’s positive to see the CEO, COO and CTO all involving themselves in the community, answering questions and generally taking the time to seriously address the thoughts of community members on project direction. Regarding weaknesses, there doesn’t seem to be a marketing specialist on the team, so that would be an ideal area for expansion given the overall potential of the project.
The first thing I notice about the ALQO website is that it is well-branded, visually appealing and exhibits clean and responsive UI/UX. Those are undoubtedly the three traits that are integral to an altcoin’s website, as it serves as the first point-of-reference for the majority of new users and thus is inextricably linked to the community growth of the project. Regarding the content of the site, it is highly informative and clearly delineated, covering all possible topics of interest with links to further reading (such as the whitepaper). There is also a native forum, but I was surprised not to find a native blog, especially for a project like this.
The roadmap is certainly impressive relative to the roadmap we saw in the GeoCoin Coin Report. There is a history of goals and targets from the initial launch, and clearly defined, specific goals for the present and future. The whole roadmap is split by quarter, and short descriptions are provided for future developments alongside their project code-names to ensure user accessibility. The roadmap goes well over a year into the future and exhibits a number of ambitious goals, such as the current launch of the Liberio wallet; the nearing launch of the Bitfineon exchange; upcoming integration of Zerocoin for anonymity purposes; a new and improved whitepaper; a payment processor; a smart contracts system; and real-world partnerships with financial institutions. The team certainly seem to have hit all quarterly deadlines for historical goals, and with the imminent launch of both Liberio (with full-functionality) and Bitfineon, it seems they will continue to do so. However, there could be improvements made in the visuals/graphics area, and quarterly goals could be given greater specificity. Overall, a 4 out of 5.
Here is a link to the ALQO whitepaper, if you’d like to give it a read: https://alqo.app/whitepaper.pdf
My first impression of the whitepaper was that it felt refreshing to read one that lacked all verbosity and unexplained technical jargon (fluff, essentially), and contained clear and concise material segmented by relevant chapters and sub-sections. This makes the whitepaper accessible to all, even the most tech-illiterate. Any potentially unfamiliar language and terminology is explained and visuals are included to further ensure accessibility. The document clearly describes the aims of the project but I am not surprised at the upcoming whitepaper update, as this original document is much less ambitious than the current state of the project. The goals set out are generic, primarily revolving around instant transactions with optional privacy; a far-cry from the present and future developments of a full financial and cloud services ecosystem, though inklings of these ambitions do exist in the whitepaper. There is also some rather vague discussion of the future use of HyperSend (instant transactions) within commercial applications. it would help if this was more specific, but I would imagine we’ll see greater specificity in the new whitepaper now that the project is a year into its plans. Overall, the whitepaper is informative and comprehensive but simply out-dated. A solid 4 out of 5.
The current available wallets are three local (windows, Mac and Linux) and a limited version of Liberio. I believe the fully-functional version of Liberio, which will act as the central platform for the ALQO ecosystem, will be launched this quarter. The Windows wallet that I use is responsive, easy to use and requires minimal CPU.
There is a lot going on regarding ALQO. They have several interesting projects and developments ongoing, but I believe Liberio and Bitfineon will be the two most important releases for the growth of the coin. Liberio’s one-click functionality will allow for greater user-base growth, whilst a successful launch of Bitfineon has the potential to make ALQO a top 100 altcoin. Why do I say this? Because, in a recent interview, CEO Jared Grey said this:
“Every significant interaction on the Bitfineon platform will have some touch point with ALQO, whether it’s to secure a project’s listing fees, secure its candidacy in an upcoming community vote, for users to vote for said coin(s), to receive trading fee discounts, loyalty and referral benefits and take part in Bitfineon’s SharePool, a revenue sharing program where 50% of all revenue generated on the platform is exclusively distributed to ALQO holders, and other related use cases.”
Now for some cross-comparative study: what Jared is essentially saying here is that, upon Bitfineon’s launch, ALQO will also function as an exchange token. This is significant for those of us concerned with price growth. I recently compiled this list of exchange tokens and calculated some important metrics: https://docs.google.com/spreadsheets/d/1hG6Hy6XexnvJFHVAUBdF2Os12uDQujaTMoxouceYtUA/edit#gid=0
The average exchange token, according to that list, trades at a ~13.5x multiple of average 24H volume (30-day) of the native exchange. This, however, does not take into account the fact that most of these exchange tokens do not offer a share in revenue for holders. One coin that does, and that is very useful for our comparative purposes, is BridgeCoin; the exchange token for CryptoBridge. Holders of BCO receive a 75% share of revenues generated by the exchange, and the coin trades at a 22.5x multiple of CryptoBridge’s average 24H volume. ALQO holders will receive 50% of exchange revenue; a third less than BCO. Projecting that forward, it would not be a surprise to see ALQO trade at a 15x multiple of Bitfineon’s average 24H volume. This presents a world of opportunity for price discovery, based on this single value proposition, let alone any of the other use-cases the ALQO team are developing. Continuing with our BridgeCoin case, if we use CryptoBridge’s average 24H volume of $1.6mn as a starting point for a successful Bitfineon launch (though I think the potential is greater), that would put ALQO’s Network Value at $24mn; around 2x its current level. For fun, let us consider that in a year’s time, Bitfineon is trading $10mn daily… this would put ALQO at a potential $150mn. Entry into top 100 altcoins only requires ~$60mn currently.
The scope for growth is huge.
Now, let’s take a look at the ALQO chart. In Market Outlook #3, which was published around a month ago, I posted some analysis of the ALQO chart at the time, and relatively little movement has happened since that time. Considering the short price-history of ALQO, the only relevant chart is ALQO/BTC Daily.
This is about as textbook as it gets when it comes to a market cycle. We saw an explosive run-up to all-time highs shortly after ALQO’s launch, when the whole market was euphoric. This was followed by a Complacency shoulder that then led to this extended drop-off and current consolidation. Price seems to be slowly rising from the Depression range towards potential Disbelief. However, volume is still low, and I would like to see this pick up in the coming weeks to confirm the reversal and beginning of a new market cycle. As is evident, the reward-to-risk based purely on the technicals is huge. Price is still around 90% below the all-time high in BTC-denomination, let alone USD… an all-time high that came only two months after the coin’s launch. There is a lot of price discovery remaining going forward, I would imagine.
This report is fast drawing towards the 5,000-word mark, and I believe I’ve covered a lot of ground here. This research process has been even more fascinating than that of the first report, and my bullish outlook on ALQO has been cemented by the deeper scrutiny.
My final grading for ALQO has to be a 5 out of 5. GeoCoin scored a final grade of 4 for being strong in all the right areas, but ALQO has excelled in them. There is room for small improvements here and there, particularly concerning the lack of block explorer functionality for more thorough rich-list analysis, but overall this presents a very strong opportunity for maximal future profit with minimal risk.
Lastly, I’d like to quickly note that, concerning these gradings, it is improbable that you will see a 0 or a 1, as all of the coins being reported on are already in my watch-list (and thus have undergone at least some fundamental and technical analysis). It is also highly unlikely that there will be many 2s, as this would indicate a huge oversight on my part with the altcoins I’m primarily interested in, though I wouldn’t rule this out. Also, these reports take around 12-15 hours of work to publish, so it would be a waste of time for me to write them on altcoins I know are going to score poorly. I would get no valuable, actionable insight out of it, and neither would you. Thus, the majority of these reports will likely score either a 3, 4 or 5, though a 5 will be reserved for what I believe to be only the strongest opportunities.
Please do let me know if you’ve enjoyed this second Coin Report; which sections you found most valuable; where you’d like me to develop further/refine/improve etc. And feel free to leave any questions in the Comments section and I’ll get back to you. Oh, and sign up for the mailing list if you want these delivered direct to your inbox!
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