Coin Report #10: Altbet

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

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

Before we begin, I must confess that prior to researching this report I had not even heard of Altbet. Someone connected to the project contacted me and asked if I would be interested in writing a Sponsored Post for them. I had a quick look at their website and Twitter account and agreed to do so, as there seemed to be plenty to talk about. My only reason for rejecting a proposal for a Sponsored Post would be if the team did not agree to my research process or if I felt that the report would not be of much interest, either to myself or to readers. Neither was the case, and so I pencilled the project in on my schedule for publication this week.

Having now completed my research, I can confirm that there is indeed a great deal of interesting discussion to be had about Altbet, but also a number of problems and flaws – at least in the eyes of the speculator – that need addressing.

Regardless, I hope that 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 Altbet prior to reading this report, here are some primary links:


Fundamental

General:

Name: Altbet

Ticker: ABET

Algorithm/Consensus: Quark (Proof-of-Stake/Masternodes)

Sector: Mutual Betting Platform

Exchanges: CryptoBridge

Launch Overview

Altbet was launched in June 2018, operating with a Proof-of-Stake consensus mechanism on the Quark algorithm, supplemented by a network of masternodes. At launch, there was a 1% premine, amounting to 210,000 ABET, allocated to development and marketing; the specifics of which I shall go into a litter later. The coin is now approaching its final reward stage, which is expected to begin ~30 days from now. This final reward stage will provide 10 ABET block reward for 4 years, until the maximum supply of 21,000,000 ABET is reached. I’ll discuss the block reward schedule at length when I tackle the Metrics.

Price-History Overview

Given Altbet’s brief existence, there is very little price-history to dissect, but the coin made its all-time high against the Dollar of $2.54 on 31st October, 2018. This coincided with its all-time high against Bitcoin of ~40,000 satoshis.

Project Overview

With regards to the project itself, Altbet is unique in that it is the first mutual betting platform in the space. Mutual betting is a form of betting wherein bets are pooled together and divided amongst winners. Despite being around 6 months old, the project seems to have a clear sense of identity and direction, and is firmly settled in its niche. Most impressive at first glance is the existence of a fully-functioning betting and gambling platform with no multi-million dollar ICO, but we’ll get into this later. Overall, as stated in its whitepaper, the project aims to revolutionise online gambling by providing cryptocurrency-backed mutual betting with zero house edge.

Let us see how it fares against this aim.


Metric Analysis:

Below are listed a number of important metrics, all of which are accurate as of 22nd January 2019. For anyone reading this who has yet to read a Coin Report, it might be worth reading the corresponding 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: $0.67 (19008 satoshis)

Exchange Volume: $5,736

Circulating Supply: 780,008 ABET

Total Supply: 780,008 ABET

Maximum Supply: 21,000,000 ABET

% of Max. Supply Minted: 3.71%

Network Value: $522,326 (148.26 BTC)

Network Value at Max. Supply: $14.062mn

Category: Lowcap

Exchange Volume-to-Network Value: 1.1%

Average Price (30-Day): $0.621

Average Exchange Volume (30-Day): $7,245

Average Network Value (30-Day): $370,001

Average Exchange Volume (30-Day)-to-Network Value: 1.96%

Average Daily On-Chain Transactions (30-Day): Unable to determine due to lack of explorer functionality – as such, I’ve used the last 100 transactions to calculate the related metrics below.

Average Daily Transactional Value* (Last 100 Transactions): $21,781 (source)

NVT** (Last 100 Transactions): 23.98

% Price Change USD (30-Day): +26%

% Price Change USD (1-Year): N/A

USD All-Time High: $2.54

% From USD All-Time High: -74%

Premine % of Max. Supply: 1%

Premine Location: https://altbet.io/explorer/#address/APni2QrxtB8JgpCqK3R987RrBTVKgK8kqY

Volatility (30-Day)***: -0.0774

Liquidity (calculated as the sum of BTC in the buy-side with 10% of current price across all exchanges): 0.9611 BTC)

Liquidity-to-Network Value %: 0.65%

Amount Available on Exchanges: 5,181 ABET

% of Circulating Supply Available on Exchanges: 0.66%

*Transactional Volume has been calculated using the last 100 transactions, as opposed to the average daily volume over the past 30 days, as this is the limit of the block explorer functionality. The figure is calculated as the sum of all ABET transacted in the last 100 transactions multiplied by current price. This is a less accurate figure than was calculated for MonetaryUnit in the previous report, as there is far less data available.

**NVT is calculated as the Network Value / Transactional Volume. See here for more on NVT.

***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 calculating volatility.

Supply Emission & Inflation:

Block Reward Schedule: 1440 blocks minted per day, with increasing block rewards until the final reward stage begins at block 182441 (~30 days). Current block reward = 7.5 ABET. Final block reward will be 10 ABET, and final block reward stage will last 4 years. For more info, see p7 of the whitepaper.

Average Block Time: 60 Seconds

Current Block Height: 139684

Annual Supply Emission*: 4,985,471 ABET (947.64 BTC)

Annual Inflation Rate: 639.16%

Circulating Supply in 365 Days: 5,765,479 ABET

*Annual Supply Emission is calculated as: supply emission pre-block 182441 + (days remaining of one year * block reward * blocks minted daily) = 161471 + (335 * 10 * 1440) = 4,985,471 ABET

Staking & Masternodes:

Network Staking Weight: Unable to determine

Staking ROI (Annual): 544.84%*

Masternode Collateral Size: 1000 ABET

Masternode Price: $669.64

Masternode Count: 597

Masternode Count Growth (30-Day): 90.73%

Supply Locked in Masternodes: 597,000

Masternode ROI (Annual): 668.07%**

Masternode Reward / Block Reward: 80%

Masternode Network Value: $399,776

MNV / Network Value: 76.54%

*To calculate annual staking ROI: (Annual Supply Emission * (Stake Reward / Block Reward)) / Network Staking Weight. In this case, Network Staking Weight is calculated as the maximum possible staking weight (circulating supply – supply locked in masternodes), to give a minimum staking ROI: (4985471 * 20%) / 183008 = 544.84%

**To calculate annual masternode ROI based on current active masternodes: (Annual Supply Emission * (Masternode Reward / Block Reward)) / Supply Locked in Masternodes: (4985471 * 80%) / 597,000 = 668.07%

Distribution:

Address Count: N/A

Supply Held By Top 10 Addresses: 8.11%

Supply Held By Top 20 Addresses: 10.68%

Supply Held By Top 100 Addresses: 24.85%

Inactive Address Count in Top 20 (30 Days of No Activity): 0

Analysis:

So, there’s a lot to get through here, but which of the above metrics are most relevant, given the aims of the project? Well, as a mutual betting and gambling platform, the most important metrics are those related to on-chain transactions. These give us an indication as to how often (and to what degree) ABET is being utilised, excluding for speculative purposes. A better measure of ABET’s usage would be volume data for the betting platform, but this is yet unavailable.

Usually, for transactional metrics, I like to use 30 days-worth of data, but the Altbet explorer only allows for the last 100 transactions to be shown. As such, Transactional Volume and NVT are admittedly less reliable than in previous reports. That being said, let’s crack on:

Altbet’s on-chains transactions amount to $21,781, using the current price of ABET and the sum of ABET transacted across the previous 100 transactions. This gives Altbet a NVT of 23.98 for the period measured. Now, this differs to the NVT calculated for MonetaryUnit, as that was based on the average daily transactional volume across a period of 30 days.

Given that the 100 transactions used for this calculated occurred within a period of 3 days, we can crudely argue that the average daily transactional volume of ABET is closer to $7,260 (one-third of the total). This would give Altbet a NVT of 71.94. For context, Bitcoin’s current NVT is around 120. In short, ABET is trading at a lower multiple of its on-chain transaction value than Bitcoin. But, Bitcoin operates on such a vastly grander scale that this is to be expected; further, ABET has some monetary policy flaws that will skew this calculation, as we will shortly uncover. Overall, however, it is good to see a healthy amount of on-chain transactional value for a relatively new lowcap project.

Now, the next point I’d like to highlight is the unbelievably low Supply Available on Exchanges. Altbet is only currently listed on CryptoBridge (technically untrue, as it is on Escodex but there is zero volume and only 10 ABET in the orderbook). On the CryptoBridge orderbook, there is only 5,181 ABET available to buy, equating to 0.66% of circulating supply. This is the lowest supply available for purchase of any coin I’ve produced a report on, and by some measure: the next-lowest was Bulwark, with 1.18% of its circulating supply on exchanges – almost twice that of Altbet. What does this tell us? Well, simply that the incentives to hold ABET are great enough that very few wish to sell at present.

The counterpart to this metric comes in the form of Liquidity, which is a measure of the buy support available on exchanges. For Altbet, this amounts to 0.9611 BTC within 10% of current prices, which equates to 0.65% of the Network Value – a demand metric that is almost equivalent to its supply metric. This level of Liquidity is also the highest of any of the coins I’ve produced a report on, with Stakenet coming in second at 0.51% of its Network Value. This suggests that demand is high at current prices and supply is low, pointing more strongly towards strong incentives to buy and hold. We’ll come to these incentives shortly. But, for now, it seems like Altbet is in a very strong position based on its supply, demand and transaction-based metrics.

Moving onto price, there are a few points that need highlighting:

Firstly, the all-time high of $2.54 was set when ABET was first listed on CryptoBridge. Initial trading usually produces anomalies due to illiquidity; as such, I do not believe this to be a useful figure.

Secondly, the average price for the past 30 days is $0.62, around 8% lower than current prices. For a lowcap on a single exchange, this indicates some degree of price stability, and suggests potential accumulation taking place at current prices. This will have to be confirmed when we come to volume analysis and an evaluation of the rich-list.

Lastly, and more alarmingly, at current prices, the Network Value at Maximum Supply stands at $14.062mn – around 27x the present Network Value. Thus, the catch for all the positive metrics so far seems to be a great deal of inflation. We shall study this in detail before the conclusion of this section…

Now, before I move on to the most substantial area of the General sub-section (volume), there’s one final metric to highlight: Volatility. This is a relatively new metric to these reports, first appearing in the previous report on MonetaryUnit. It is one I devised recently when writing a post on risk management. It measures the 30-day volatility of a coin from its average price across that same period. The closer to 0, the less volatile the coin across the past month. MonetaryUnit had Volatility of -0.1103. This was a degree of volatility similar to that of Ethereum. Altbet has Volatility of -0.0774. This indicates that Altbet is almost a third less volatile than MonetaryUnit over a period of 30 days.

To conclude the analysis of the General metrics, we must look at volume:

For the past 24 hours, Altbet traded $5,736 of volume. This equates to 1.1% of its Network Value. Given the present market conditions and the fact that Altbet is only traded on CryptoBridge, this is quite impressive. Further, its Average Daily Volume for the past 30 days was $7,245, equating to 1.96% of its Average Network Value for the same period of ~$370k. Both, EVNV, and Average EVNV, place Altbet towards the top of the pack, relative to other coins I’ve written reports on. Only MonetaryUnit and Arionum beat it for Average EVNV. This is certainly indicative of a high level of market interest.

Let us now move on to analyse what I feel is the dealbreaker for any speculative position: Supply Emission and Inflation:

The block reward schedule sees the final reward stage for ABET entered within the next month, after which point rewards will be set at 10 ABET per block for the next 4 years, with 60-second block times. Using the block reward table provided on p7 of the Altbet whitepaper, we can work out that 4,985,471 ABET will be minted over the next year. This equates to an annual inflation rate of a whopping 639.16%, and puts the circulating supply at 5.765mn ABET in 365 days. This is hyper-inflation on steroids, and is disappointing to see given the very strong metrics found thus far.

Further, of the coins previously reported on, Altbet’s annual inflation rate is 6x that of the next highest: Arionum. Purely based on present inflation, I cannot sincerely recommend any speculator to buy at current prices in an effort to turn a short-or-mid-term profit. That being said, there are potential advantages the long-term holder, based on the incentives that shall become clearer a little later. Overall, however, such high inflation is not what I like to see.

Now, using the figure of ~4.985mn ABET minted over the next 365 days, we get an average daily supply emission of 13,658 ABET. This equates to 2.595 BTC of new ABET minted daily at current prices, or a little over $9,000-worth. This means that the amount of ABET minted daily surpasses the amount of trading volume that the coin tends to experiences over the same period; a sign of strong headwinds for price growth at present. Also, if we consider the Liquidity of 0.96 BTC, daily supply emission is three times the amount of buy support within 10% of current prices – it would seem depreciation is inevitable.

Update: Having spoken to the team at length, they have informed me that, as per the wishes of the Altbet community, the team are considering options available to curb the hyper-inflation ASAP. This is good to see. Such high inflation will destroy what, at this stage of the report, seems to be a very decent coin.

Now, let us move on to Staking and Masternodes:

Unfortunately, I can’t determine the Network Staking Weight, as the explorer does not have this functionality; as such, I’ve used the maximum staking weight, calculated by subtracting the supply locked in masternodes from the circulating supply, to find a minimum annual staking ROI. Using these figures, the staking ROI comes in at 544.84% – an insane ROI but expected given the hyper-inflation. Further, this ROI does not actually cover the annual inflation rate.

With regards to masternodes, there are 597 active masternodes; a count that has grown by 90.73% in the past 30 days. This is huge growth of the masternode network. But why are so many flocking to join the MN network? Well, because the current annual returns are in excess of 668%. This figure does cover the annual inflation rate, and thus would seem the wiser choice for those seeking ultra-high, short-term returns. But, as I lay out in The Speculator’s Guide to Masternodes, such returns are problematic for those seeking short-term profit, as it is really just a gamble as to which masternode operators can dump their rewards before others, thus securing returns at current prices.

That being said, there is a possible advantage for long-term holders, as I mentioned earlier. Those who believe in the longevity of Altbet can use the high returns to increase their position size exponentially (something that cannot be done at present via exchanges) and, in doing so, lower their average entry price. The objective here would be to continue to accumulate ABET to the point where hyper-inflation has dissipated, average entry cost is very low and price can finally experience a period of growth undeterred by headwinds. This is a risky game.

To conclude the analysis of the masternode network, let’s consider the value of it. At current prices, the Altbet masternode network is valued at $399,776, which equates to 76.54% of the Network Value. This is indicative of a very strong masternode network, but also presents the problem of low circulating supply for the purposes of betting and gambling on the the Altbet platform.

Now, to bring this lengthy section on Metrics to a close, I’ll take a look at Distribution:

The total address count cannot be determined via the block explorer, but the decentralisation of supply is evident.

The top 10 addresses control 8.11% of the circulating supply; the top 20 control 10.68%; and the top 100 control 24.85%. Less than a quarter of the circulating supply is in the hands of the top 100 addresses. This is the third-lowest of all the coins I’ve reported on, only behind ALQO and Bulwark. Further, none of the top 20 addresses have been inactive over the past 30 days.

But what comprises such a high level of large-holder activity?

Well, only 1 of the top 20 addresses is in distribution. The other 19-richest addresses are either staking, accumulating masternode rewards or actively buying. This aligns with the aforementioned thought that ABET is currently in accumulation, despite the hyper-inflation. At present, it seems, large holders are willing to neglect the supply emission in favour of the high returns.

Now, let’s take a look at the Altbet 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.

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

Twitter Followers: 1669

Tweets: 239

Average Twitter Engagement: 3.1%

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

Firstly, it is quite surprising that Altbet have neglected to create a Facebook page for their platform – there is a lot of opportunity for community growth here being missed.

The Altbet Twitter account has a little under 1700 followers, which is quite modest in its size. That being said, the project has only been on social media for around 4 months. Its engagement levels, however, are very strong. Of course, it is easier to show high engagement with a smaller following, but 3.1% Average Twitter Engagement is over 67x greater than that across all industries in the RivalIQ report, and 238x greater than that of the Media industry. Further, it is the second-highest engagement rate of all the coins previously reported on, behind only Dero at 3.64%.

Discord:

The Altbet Discord cements this strength in engagement and is perhaps the most engaged Discord group I’ve seen in the process of research these reports. The only group I can think of that was as engaged was that of ALQO.

The Discord has 3645 members (much larger than the Twitter audience) and the Welcome channel shows 158 new members this past week; a weekly growth rate of 4.33%. The group features an admin ID channel to help prevent new members from being scammed by being able to clearly identify team members and moderators.

More importantly, however, are the two separate announcement channels; one for Major Announcements and one for Minor Announcements. Minor is updated almost every day, indicating a strong commitment to keeping the community informed with day-to-day activities of the team. Major is generally updated weekly or fortnightly. In the Major Announcements channel, I found a detailed end-of-year update from December and a decision to split an upcoming major announcement across three days due to the depth of the update.

This major announcement series began this week, with the following taken from the first day: Altbet is branching out from mutual betting to create multiple use-cases moving forward, with a second platform being developed; new games are to be released this quarter; special events are upcoming; a referral program is in the works; the platform is being optimised for mobile; wallet update incoming; second platform release incoming; and a whitepaper and roadmap update also incoming. It is made clear that these announcements are outline or overviews, with more specific announcement relating to each individual goal set to be released upon their respective completions.

The second major announcement was related to ideas for events and tournaments, and an update on exchanges: sponsorships are in the works for streamers and gamers; community and local tournaments are being considered with prizes; and a platform competition based on leaderboards is also being considered. Regarding exchanges, Mercatox listing was discarded as the community expressed a distrust for the exchange and Cryptopia was hacked before a listing had been paid for. The options remaining are STEX, CoinExchange, Crex24, Shardax and Graviex.

The third announcement is to follow today – see their Discord upon publication of this report for more info.

With regards to the rest of the content of the Discord, there is an Official Links channel with all relevant resources, increasing accessibility for new users. Further, there is a native channel for the Roadmap that is kept updated upon the completion of a goal. This is not something I see in most Discord groups. There are channels dedicated to media and PR, too, as is the norm.

Lastly, we come to the General channel, which is the hub of all discussion. This channel is always active, and I found a lot of excitement and genuine interest in the platform itself from the community. There were around 100 members active over the past week, and some community members have taken to calling themselves altbetters. At first, one could be forgiven for thinking this is a little cheesy, until you realise that almost all strong fanbases or communities of public products or personas have a name; it is a crude sign of commitment. Further, there seems to be far more discussion about the platform than the price of the coin, which is refreshing and implies a lot of the members are users of the platform and not just speculators.

Overall, very impressed.

Telegram:

The Altbet Telegram group is, as expected, less impressive than the Discord, but it seems to be a secondary platform for the community. There are 925 members, with 10 new members in the past week. Updates and announcements are pushed out here, which is good to see, but the group is not very active outside of sharing memes and gifs.

BitcoinTalk:

The Altbet BitcoinTalk thread was created on 26th November, 2018, and has since generated 73 posts spanning 4 pages in 57 days, giving an average of 1.28 posts per day. This isn’t particularly strong, as the first few months of a project’s launch is usually the busiest period of discussion on its Bitcointalk thread.

That being said, the announcement does highlight the 0% fees/zero house-edge on an already-launched platform at the time of thread creation. This is impressive, as they had a working product almost immediately. The copy in the announcement needs proof-reading, however (as does much of the website and the whitepaper, as I’ll discuss a little later). What I like more than anything in the thread, however, is the clear breakdown of the premine and its allocation. I also liked that some early data was provided as to the userbase of the platform in November/December 2018: 16,000 unique monthly visits in the month of launch. Overall, there’s not that much content to dissect here, but most of the discussion is again focused on the platform.

Update: The first Altbet BitcoinTalk thread was deleted due to an issue with bounties, which explains the low page count.

That concludes my analysis of the Altbet community. Onto 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:

There is no information related to the team on the website. There are 2 contributors to the Github and 4 team members mentioned in the Discord group.

Having spoken to the lead dev, I have been informed that full team information will be released once Altbet has been incorporated and is granted licences. For now, the team is comprised of altbetdev (the lead dev), JJ (the web developer), French (the social media manager) and TFinch (helping with the blockchain. There are freelancers that work on the project also.

It would be great if we had some further information on the relevant experience of these team members; anonymity is not a problem at all, but lack of information relating to experience is.

Website:

https://altbet.io/

The website is well-branded and contemporary in its design but the navigation bar is quite poorly-designed, in my opinion. Provably Fair shouldn’t be a navigation heading, but perhaps belongs within a menu relating to the features of the platform. Having broader but clearer headings with menus providing further specificity would greatly improve UI/UX. The content of the site is highly informative but the copy needs a lot of attention; there are grammatical errors everywhere that reduce the perception of quality of the platform itself. The content does, however, highlight the advantages of the Altbet platform. Wallets and social media channels are clearly linked, and the roadmap is native to the homepage, allowing new visitors to effortlessly get a better understanding of the direction of the project. Further, the coin specification, block reward schedule and premine allocation are clearly displayed with infographics – full transparency is great to see. Lastly, I like that there is a dedicated Medium blog with detailed weekly updates.

The block explorer works perfectly well but is limited in its functionality. Perhaps investing in a Chainz explorer, or building similar functionality into the native explorer, would be useful for users.

Roadmap:

The roadmap is presented in timeline format with monthly separations. It’s not very visually appealing or highly detailed but it is certainly comprehensive and specific:

May 2018 was a period of research.

June 2018: The project launches and the platform is developed.

July 2018: The whitepaper is written and the roadmap devised; the team is organised; and social accounts are launched.

September 2018: The launch of the closed alpha for the platform; mobile version testing; the blockchain is developed; the wallet is created; website launched; BTCTalk pre-ann created; the whitepaper is release; and early marketing begins.

October 2018: There is a presale of one-third of the 1% premine; genesis block created; wallets released; public platform beta goes live; social campaign begins; CryptoBridge lists ABET; and further platform development occurs.

November 2018: New games are released; price pegging integration; and eSports mutual betting launched.

December 2018: New games released; CMC listing (not yet done); and CoinExchange listing (not yet done).

January 2019: Sports betting launch; promotion and marketing; and mobile wallet research begins.

February 2019: Updates and optimisation of platform; mobile wallet development; and governance platform development.

March 2019: Mutual betting launches for tradeable markets; plus promotion campaign and governance platform launch.

Q2 2019 and forward: Roadmap update; whitepaper
update; ‘big’ exchange listing; mobile wallet release; global marketing campaign; and web wallet research + development.

Overall, there is lots to like but it would help to have more information on individual goals/aims, as well as some indication as to progress.

Whitepaper:

https://altbet.io/whitepaper/371967dfb4c2c351f85732f51ed33848/altbet-whitepaper.pdf

The whitepaper is dated October 2018. It is written mostly in broken English and is in dire need of proofreading. The prose is generally easy to understand but the grammatical errors lower the quality of the document; this should have been outsourced. Perhaps a community member would be willing to make the necessary corrections?

The Overview states Altbet’s aims of revolutionising online gambling by providing zero house edge mutual betting using their own cryptocurrency, ABET. The mutual betting mechanism is then explained and the whitepaper explicitly states that there will be no ads on the platform to increase user satisfaction.

We are then told that the platform will cover Sports, eSports, Markets and Special Events, as well as traditional casino games. The document goes on to introduce masternodes, which, on top of the usual reward-based incentives, will allow special privileges on the platform. The masternodes will receive 80% of block rewards, which is a very high reward.

The following section on price sustainability clarifies how ABET functions within the platform: the current ABET/BTC rate determines the amount of
ABET required per bet placed. This will be pegged to USD in the future. I would have expected some sort of reward scheme here for holders or
something similar; potentially buy-backs to counteract the insane inflation rate.

The Coin Specification section is highly informative, as is the explanation of the block reward schedule (but the inflation ratebecomes clear here). The roadmap is also printed within the document. Market Potential goes on to provide some indication of market size and highlights the issues with traditional online gambling. This is great, as it shows that there is indeed a gap for Altbet to exploit, but this is a highly competitive space.

The Market Plan section shows how the platform is provably fair and transparent, as well as highlighting that it is the first mutual betting platform in the space. There is zero house edge, anonymous gambling and the project is actively seeking out licences. Further, there are 3% commissions on eSports and Sports betting.

The concluding pages of the whitepaper detail facts about the premine: 1% of the maximum supply was premined, amounting to 210,000 ABET. One-third of these will be sold publicly to raise funds for platform development and launch, with the total raised from this sale expected to be 28.5 BTC.  One-third will go into the bankroll for the live games on the platform; 19.3% to promotion and marketing; 7% to the team; 5% for the community fund; and a miscellaneous fund of 2% is for unforeseen circumstances. The remaining 99% of total coins are to be minted over the course four years.

Wallets:

There are currently Windows, Mac and Linux wallets available, with mobile wallets scheduled for release in Q2 2019.

General:

In general, I really like a lot of what I have uncovered in the process of researching this report. Altbet, as a project, has a clear niche with a working product, developed without an extravagant ICO. This shows commitment and competency on the part of the developers. Further, the team are also clearly equally committed to keeping the community well-informed.

The most significant development goal so far achieved was undoubtedly the succesful launch of the betting platform within the first three months of the project’s launch. I look forward to monitoring how this platform is updated and expanded over the coming six months, in line with the aims on their roadmap.

With regards to funding, the team have informed me that the 210,000 ABET premine is now reduced to around 120,000 ABET, accounting for development and marketing costs of the platform launch, with much of the expenditure being funded via Bitcoin by the team themselves. This leaves roughly $82,000-worth of funds at current prices. Further, the platform takes 3% commissions on Sports/eSports betting and the bankroll on the platform grows with user losses and these fees.

Most importantly, as a speculator, the team are seriously considering options to cut inflation. As I have stated already, present inflation is beyond that which is acceptable for me to personally invest, but I look forward to seeing how this unfolds going forward.

That concludes my Fundamental analysis of Altbet.


Technical

Unfortunately, I can’t provide a detailed dissection of Altbet’s price-history for a couple of reasons. Firstly, the project is only a few months old, so there ais barely any data to analyse, as it is. And secondly, it is not listed on Coinmarketcap, and so, TradingView charts cannot be drawn for ABET. Instead, I have sourced the following chart from CoinGecko:

Altbet Price

As I said, there’s very little to discuss here. That being said, we can see that ABET seems to have found a bottom above 8000 saotshis, and has sinced bounced and formed a short-term uptrend, with a series of higher-highs and higher-lows, despite the daily supply emission. Regardless, based purely on current levels of inflation, I would not recommend buying at these prices. I would like to see either a reduction in supply emission before entering a position or prices around 6000 satoshis; the latter would give ABET a Network Value at Maximum Supply of around $4.5mn, which is much more reasonable.


Conclusion

This report is now approaching 6,000 words, and it is time to draw it to a close.

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

*The caveat to this being that, were it not for the team acknowledging the need to curb the hyper-inflation ASAP, the project would score a 6. As they have made their intentions clear, and the project is otherwise fundamentally strong, in my opinion, I believe an 8 is fair. Any decision against significantly reducing the supply emission would have this grading decreased.

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.

Coin Report #9: MonetaryUnit

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

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

MonetaryUnit is a rather special case with regards to my Coin Reports, as one of their team members is a friend of mine in the space: @notsofast. As such, I’m going to be even more brutal than is the norm and tear MUE to pieces… only kidding nsf.

In fact, I first came across the project in November 2017, when notsofast tweeted that he’d had a meeting with the MonetaryUnit team at Brewdog; a brewery I’m a big fan of. Discussion of beer was indeed my first contact with the project. Following that, however, I didn’t pay much attention to it until around June 2018, when I bought a little based on the range it had formed between 1200-1600 satoshis for a period of around four months. The market swiftly sat me down for doing no further due diligence than this little slice of technical analysis, and price broke the range a few weeks later. I sold out of my position at a minor loss, and have not looked at the coin since. Strangely enough, price has again formed a long-term range… but we’ll get to that a little later.

Moving away from my past experience with the project, what is more important is where the project stands now; what it has accomplished; where it is failing on its promises; where it has room for improvement; and whether there is an opportunity here, at current prices, for us speculators. Having completed my research, I can say from the outset that there is quite a lot to get through…

I hope this ninth Coin 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 MonetaryUnit prior to reading this report, here are some primary links:


Fundamental

General:

Name: MonetaryUnit

Ticker: MUE

Algorithm: X11 (now pure Proof-of-Stake)

Sector: Decentralised Payments & Services + Masternode Platform

Exchanges: Bittrex, Upbit, CoinExchange, CryptoBridge, Bittylicious

Launch Overview

MonetaryUnit was launched in July 2014, as a Quark clone, but was relaunched in June 2017 as an X11 Dash hybrid. It has since migrated from the X11 Proof-of-Work consensus mechanism to fully Proof-of-Stake, operating alongside a network of masternodes. This migration took place in October 2018. There was a 1% premine (which has since been distributed in its entirety, towards bounties, Bittrex listing and other developments) and no ICO. Further, the coin is in its final block reward stage; a stage that will continue indefinitely – 40 MUE block rewards in perpetuity. This is important to note as we will discuss it in greater depth when we move on to talk about inflation and supply emission.

Price-History Overview

MUE has been trading for over four years, and, as such, has perhaps the most substantial price-history of any coin that I’ve produced a Coin Report on thus far. Since its inception, MonetaryUnit has hit an all-time high of around $0.50 against the Dollar and ~8000 satoshis against BTC. Since hitting these highs, it – as is the case with the entire market – has dropped off considerably, shedding well over 95% of its value against the Dollar. This may be an opportunity, but we’ll know for certain by the end of this report.

Project Overview

When it comes to goals and identity, it seems to me that MonetaryUnit knows where it stands and knows what it wants. This much is clear from even the most surface-level research. In their whitepaper, they state that MonetaryUnit “is designed to be a virtual currency accessible to all” with a clear focus on developing an “ecosystem of services and apps”. If a little broad in the former aim, at least the project is clear in its path to success via the latter. Talk is cheap, however, and we’ll soon see whether the team are succeeding at their intended focus on payments and services.

But first, some metrics:


Metric Analysis:

Below are listed a number of important metrics, all of which are accurate as of 8th January 2019. For anyone reading this who has yet to read a Coin Report, it might be worth reading the corresponding 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: $0.019 (465 satoshis)

Exchange Volume$13,142

Circulating Supply: 147,601,670 MUE

Total Supply: 147,601,670 MUE

Maximum Supply: 4,000,000,000 MUE (over 120+ years)

% of Max. Supply Minted: 3.69%

Network Value: $2.761mn (686.35 BTC)

Network Value at Max. Supply: $74.827mn

Category: Midcap

Exchange Volume-to-Network Value: 0.48%

Average Price (30-Day): $0.019

Average Exchange Volume (30-Day): $67,773

Average Network Value (30-Day): $2.851mn

Average Exchange Volume (30-Day)-to-Network Value: 2.38%

Volatility* (30-Day): -0.1103

Average Daily On-Chain Transactions (30-Day): 115

Average Daily Transactional Value** (30-Day): $118,056 (source)

NVT*** (30-Day): 23.39

% Price Change USD (30-Day): +15%

% Price Change USD (1-Year): -96%

USD All-Time High: $0.496

% From USD All-Time High: -96.3%

Premine % of Max. Supply: 1%

Premine Location: Fully distributed

Liquidity (calculated as the sum of BTC in the buy-side with 10% of current price across all exchanges): 1.8826 BTC

Liquidity-to-Network Value %: 0.27%

Amount Available on Exchanges: 6,267,367 MUE

% of Circulating Supply Available on Exchanges: 4.25%

*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 calculating volatility.

**Transactional Value in $ is calculated by taking the average daily transactional value in MUE and multiplying it by the average price for the past 30 days.

***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: 40 MUE block reward in perpetuity. 2160 blocks minted per day = 86,400 MUE minted daily. No halvings.

Average Block Time: 40 seconds

Current Block Height: 206852

Annual Supply Emission: 31,536,000 MUE (146.64 BTC at current prices)

Annual Inflation Rate: 21.37%

Circulating Supply in 365 Days: 179,137,670 MUE

Staking & Masternodes:

Network Staking Weight: 39,058,181 MUE (source)

Staking ROI (Annual):  36.33%*

Masternode Collateral Size: 500,000 MUE

Masternode Price: $9,353.48

Masternode Count: 89 (source)

Masternode Count Growth (30-Day): 5.62%

Supply Locked in Masternodes: 44,500,000 MUE

Masternode Reward / Block Reward: 45%

Masternode ROI (Annual): 31.89%**

Masternode Network Value$832,459

MNV / Network Value: 30.15%

*To calculate annual staking ROI: (Annual Supply Emission * (Stake Reward / Block Reward)) / Network Staking Weight = (31,536,000 * 45%) / 39,058,181 = 0.3633 = 36.33%

*To calculate annual masternode ROI based on current active masternodes: (Annual Supply Emission * (Masternode Reward / Block Reward)) / Supply Locked in Masternodes = (31,536,000 * 45%) / 44,500,000 = 0.3189 = 31.89%

Distribution:

Address Count: 43,979

Supply Held By Top 10 Addresses: 36.26%*

Supply Held By Top 20 Addresses: 41.15%*

Supply Held By Top 100 Addresses: 69.64%*

Inactive Address Count** in Top 20 (30 Days of No Activity): 3

*The top 4 addresses belong to Bittrex and equal 30.13% of circulating supply. This will be in the form of cold storage, hot wallets and MUE in the orderbook. Discounting this amount, the top 10 (5th-15th richest = 8.93% and the top 20 = 12.99%.

**This is discounting the 4 addresses belonging to Bittrex.

Analysis:

That may be the largest pile of metrics I’ve ever published on a coin, but that’s simply because MonetaryUnit ticks all the metric-related boxes: it is a project that features staking, masternodes and has a Chainz explorer, which allows for high-level distribution analysis.

However, it is important to begin with the metric that is most relevant to MonetaryUnit’s core aims; namely, payments. Given this specific aim, on-chain transactions are of the utmost significance, and, for the first time in a while, I’ve been able to calculate transaction-related metrics. Thank you, Chainz. Many explorers make it very difficult to extract information concerning on-chain transactions, but the Chainz explorers make it incredibly easy, though there is admittedly no way to determine just how accurate this data is. Regardless, we’ll make do with what we have – at least there is data:

According to the explorer, MonetaryUnit is experiencing around 115 on-chain transactions per day, using the past 30 days of data. Further, and more significantly, the average daily transactional value is ~$118k. Using this information, we can calculate the NVT of MUE for the past month, and the results are rather stunning: the coin has a NVT of 23.39.

What does this mean, and why is it significant? Well, to give some context, the NVT of Bitcoin is currently around 119, or 5x greater than that of MUE. In other words, if Bitcoin is fair value at current prices, MonetaryUnit seems heavily undervalued based purely on the value of on-chain transactions relative to the respective network values. Now, don’t get me wrong – this is no fair comparison: Bitcoin and MonetaryUnit are playing at entirely different scales. But, it must be said that the most reliable metric for the usage of MUE as a means of payment is very much positive.

So, we’ve established that the coin fares well with regards to its principal aim, but how does it fare elsewhere? I’ll begin by running through the remainder of the General metrics, before moving onto those concerning Supply Emission & Inflation, Staking & Masternodes and finally Distribution.

The first metric that catches the eye is that of the supply of MUE available on exchanges. At 4.25% of the circulating supply, it is rather large, relative to coins from other reports; in fact, MUE has the second-largest percentage of circulating supply available on exchanges of any of the prior coins reported on. This is a measure indicative of a lack of willingness (or incentive) to hold MUE, which, though not a positive for projects concerned with being seen as a store of value, is in fact expected of a coin focused on its utility as a means of payment.

However, MonetaryUnit does feature staking and masternodes as an incentive for holders, but perhaps the rewards are not alluring enough: coins like Bulwark had only 1.18% of the circulating supply on exchanges, at the time of writing, but presented annual returns of around 60% for masternode holders; almost twice those offered by MonetaryUnit masternodes.

Where the above is concerned with measuring supply for the market, Liquidity is its counterpart, relating more closely to demand. MonetaryUnit has Liquidity of 1.88 BTC, or 0.27% of its Network Value. This is indicative of a moderate level of demand at or near current prices, and Stakenet and Bulwark are the only two coins from previous reports to have shown greater Liquidity; Bulwark beating MUE by only 0.02%, however, with Stakenet clearly the most liquid at 0.51%. Regardless, MonetaryUnit doesn’t fail to show signs of buying interest, even in such difficult times for the space.

Next, we should take a look at price, particularly the all-time high. At current prices, the coin is trading at a 96.3% discount to the high of a little under $0.50. This is a possible opportunity, presenting huge upside potential if MUE is otherwise fundamentally and technically sound, as is yet to be determined.

Before I conclude the evaluation of the General metrics by discussing volume, there’s a couple, more isolated points to tie up:

Firstly, the maximum supply of MonetaryUnit is 4,000,000,000, which puts the current circulating supply at less than 4% of the maximum supply. On the surface, this would suggest extreme inflation is inevitable, and thus there shall be major headwinds for price growth, but it so happens that the maximum supply will not be reached for over 100 years, which is well beyond the life-span of anyone reading this and thus irrelevant. We shall come to its implications for inflation shortly.

Secondly, I have included a new metric in this report; namely, Volatility. This is a metric I devised recently when writing a post on risk management, and it is merely a simplistic method of assessing the volatility of any given coin over any given period. As stated in the footnote to the General sub-section, the closer the figure to zero, the less volatile the coin during the period measured. MonetaryUnit scores -0.1103 for its Volatility over the past 30 days.

Having tested the methodology with numerous altcoins over the same period, I can say that this is not too dissimilar from that of Ethereum. As more reports are written, and my spreadsheet of metrics updated, this metric will become more useful; cross-comparisons will be possible based on the volatility of the underlying markets.

Now, let’s take a look at Exchange Volume to conclude this sub-section of metrics: MonetaryUnit experienced ~$13k of Exchange Volume over the past 24 hours, which equates to 0.48% of its Network Value. This is around half of what I like to see for Exchange Volume-to-Network Value, but, given the current market conditions, it is expected. It actually places MUE half-way in the pack of previous coins reported on. But a single day of data is not so reliable.

MonetaryUnit’s Average Exchange Volume for the past month has been closer to $68k. This equates to a much more healthy 2.38% of the Average Network Value across the same period. This is certainly more promising with regards to smart-money interest. Further, it is the second-highest Average EVNV of any coin reported on, beaten only by Arionum. Given present market conditions, I’d say this was a sure sign of accumulation taking place, but this can only be verified by the chart and the rich-list.

Moving onto Supply Emission & Inflation, MonetaryUnit is very much straightforward. With its block reward schedule of 40 MUE per block in perpetuity and 40-second block times, we can calculate that there are 2160 new blocks minted daily, or 86,400 MUE. This equates to an annual supply emission of 31,536,000 MUE, which, at current prices, is 146.64 BTC. The annual inflation rate implied by such supply emission is 21.37% – a modest amount. In fact, it once again places MUE in the middle of the pack: Arionum, Bismuth, Dero and Bulwark all experience greater annual inflation; Stakenet, Covesting, ALQO and Geocoin experience less.

This is, however, surface-level evaluation. Let’s break it down a little bit further and take a look at the relationship between volume and supply emission:

Using the figure of 86,400 MUE minted daily, we can calculate that this is roughly 0.4 BTC-worth at current prices, or $1,620. MonetaryUnit’s Exchange Volume covers this emission by ~811%; its Average Exchange Volume covers it by ~4183%. In other words, MUE trades far more volume on a daily basis than it mints new coins, thus current prices should be sustainable. Decreasing prices at present are more likely to be panic sellers or smart-money distribution than the effect of newly minted coins being dumped. This is important, as it tells us that manipulation has a firmer hold on price than inflation. Further, these calculations are not taking into account the fact that 10% of each block reward is locked in a governance system for budget proposals; something I will discuss at length later. Lastly, when we take into consideration the Liquidity of around 1.88 BTC, daily supply emission is covered almost 5x by buy support within 10% of current prices…

Now, let’s take a quick look at the metrics related to Staking & Masternodes. Unlike for most Proof-of-Stake coins, we are able to determine network staking weight for MUE thanks (again) to the explorer. Given the network staking weight, the annual supply emission and the fact that 45% of the block reward is distributed to stakers, I have calculated the annual ROI to be 36.33%.

More important, however, are the metrics concerning masternodes. With a masternode priced around $9300, they are a little more expensive than many others, which perhaps accounts for the fact that only 89 are active. However, this equates to 44.5mn MUE locked in masternodes, which gives us an annual ROI of 31.89%. At present, it seems staking is more profitable. Both options, however, give solid returns that are greater than the annual inflation.

What about Masternode Network Value? Well, with 44.5mn MUE locked in masternodes, the MNV of MonetaryUnit is $832,459. This equates to a little over 30% of the Network Value, which is indicative of a masternode network that is moderate in strength, but with plenty of room for growth.

Finally, Distribution:

Now, the first point to highlight is that MonetaryUnit has the highest address count of any coin I’ve managed to find that figure for in previous reports – and by some margin. But that doesn’t tell us much about the distribution of the coin or the activity of the largest holders.

With regards to distribution, at the surface, it seems as though the top 10 addresses own over a third of the circulating supply. However, on closer inspection, the top 4 richest addresses belong to Bittrex, so, for more accurate figures, we should discount those. The top 10 richest addresses excluding these Bittrex addresses (i.e 5th-14th) control 8.93%; and the top 20 (i.e 5th-24th) control 12.99%. This is strong decentralisation of supply, but with enough concentration towards the richest addresses to indicate smart-money interest. Further, only 3 of the top 20 addresses (again, excluding those of Bittrex) have been inactive over the past 30 days… but what exactly have the remaining addresses been doing?

Well, 12 of the top 20 are staking their positions and have been doing so for some time, and a 13th address is also staking but distributing its stakes. Of the remaining 7 addresses, 3 are inactive, as mentioned earlier, 2 are running masternodes and accumulating the rewards, and 2 are adding heavily to their positions. Of these 2, one is the 5th-richest address, which has added over 1.5mn MUE to its position since December; the other is the 7th richest, which has more than tripled its position in a month. Very promising signs, indeed.

And that concludes this lengthy section on metrics. Let’s now turn to the MonetaryUnit 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.

MonetaryUnit is present on only two platforms: Twitter and Discord. To begin, let’s look at the various social metrics that I calculated from the MonetaryUnit Twitter account:

Twitter Followers: 15,109

Tweets: 9841

Average Twitter Engagement: 0.09%

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

Unfortunately, MonetaryUnit isn’t on Facebook, so we can’t do a comprehensive evaluation of its social benchmarks. I am quite surprised at the lack of a Facebook page altogether; let alone a well kept page with a decent audience, as Facebook is a huge opportunity for userbase growth, particularly for a project that has its sights set on being used for payments in e-commerce. Rather disappointing.

Anyway, as is expressed in the RivalIQ report, the average engagement rate on Twitter across all industries is 0.046%, and the average in the Media industry (the most resemblant industry in the report) is 0.013%.

MonetaryUnit’s rather large Twitter following of over 15,000 does seem to be suffering from a lack of engagement; despite having an average engagement rate twice that across-all-industries, and around 7x that of the Media industry, it falls short against other cryptocurrencies. In fact, of the coins I’ve produced reports on, MUE’s engagement rate of 0.09% is half that of the coin with the second-lowest engagement rate – Geocoin. Clearly, there is work to be done here.

I believe one of the reasons for such low engagement is the frequency of tweets; with almost 10,000 tweets since the account’s inception, MonetaryUnit have been tweeting (or retweeting), on average, 6 times a day for four and a half years. No doubt, being active is super important in building an audience and thus a potential userbase, but there is a lot of fluff. It is quite clear that the higher-quality, more informative tweets posted do show good engagement, particularly those concerning the project itself, as opposed to (for example) tweets about the numerous cryptocurrencies accepted on Flubit.com.

Now, moving onto Discord, MonetaryUnit has 633 members in its group – a very small group relative to the size of its Twitter audience. That being said, the Welcome channel indicates that 24 new members joined in the past week, equating to a 3.79% weekly growth rate, which is quite strong.

The Discord itself has plenty of channels for relevant topics, allowing for ease-of-access and usability. Announcements is updated every 3 days, in general, which is good to see, with recent announcements covering the following: the appointment of a marketing advisor; iOS app release; new wallet release; and cashback for Flubit users in the form of MUE, as a means of growing awareness (very impressive – though I’ve mentioned it twice now, we’ll get to Flubit a little later). Budget Proposals has not been updated since the end of November; Twitter is useful as it allows members to view all MUE-related tweets natively; and Suggestions is not all that active but I did see something about Ledger integration and a listing on Bitfineon… good ideas, both of them. There are also several channels for specific areas of Support, which is very useful for newer users as the responses are specific to their issues; all Support channels also appear to be prompt in their solutions. Lastly, before moving onto the most important channel of the group, there is a Links channel with all important resources linked.

The vast majority of the discussion occurs in General, as is often the case. In this channel, around 30 members of the MonetaryUnit community engage in near-constant daily discussion, equating to a 4.73% engagement rate. This is far, far better than the engagement seen on the Twitter account. However, whilst there seems to be a lot of general conversation and some talk on ‘Muenion 2019’, which I’ll assume is a MUE conference with a terrible name, there does seem to be a lack of discussion regarding future development, community growth and ideas. There is, however, some discussion on price and much on the acceptance of MUE as a means of payment for numerous services. I would like to see the community’s strong engagement (around 4.7% of the group is involved in conversation) more concentrated towards fostering ideas for the growth of the project; perhaps this can be incentivised in some way. Or perhaps my evaluation of the past couple of weeks of discussion is an anomaly.

BitcoinTalk:

The MonetaryUnit BitcoinTalk thread was created on 11th September, 2014, and has since generated 4314 posts spanning 216 pages in 1580 days, giving an average of 2.73 posts per day. However, in the past 90 days, the thread has had 97 posts via ~32 individual posters, giving an average of a little over 1 post per day, suggesting that activity has died down of late.

Regarding the content of the thread, there are clearly lots of development updates being pushed out, which is great to see. I found mentions of an Android wallet release; the changover to MUE 2.0 (full Proof-of-Stake); a new explorer; the launch of MonetaryUnit’s direct-buy service, where MUE can be bought natively on their website; Flubit integration; listing on EmblemDEX; a podcast episode on YouTube; an iOS app; and more. In short, there seems to be a lot going on; strange that this was less evident in the Discord group.

Support queries from the community are swiftly responded to and resolved, and much of the community discussion is focused on masternodes versus staking, in the context of probability. This is good to see, as new users who come across the thread will immediately be inundated with the financial incentives of buying MUE…

That concludes the section on Community. Onto 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:

With regards to project leadership, there are 7 core members listed on the website, 307 contributors to the Github and 10 members of the Taiga roadmap platform.

Of the 7 core members, there is the Founder of MonetaryUnit (Byron), 3 Developers, 1 Tech Advisor, 1 in control of Finance and 1 ‘Project Controls’. Whilst this is a moderately-sized core team for the size of the project, it would be great to have more information on these roles and the individual members’ experience and expertise – no doxxing necessary; just more indication of experience. Also, there does seem to be an imbalance towards development, which, in itself, is no bad thing, but the lack of a marketing specialist is perhaps an explanation for the weaknesses shown in social media presence and group size on Discord. As was stated earlier, however, a marketing advisor from the Crypto-Twitter community has recently been appointed, which is good news, but I believe a core team member with marketing expertise would be even better.

Update: A recent announcement has brought to light a significant expansion of the MonetaryUnit team, which now comprises of all core members plus the entire staff at Flubit.com, who will be working as part of the MUE project. Flubit is the world’s largest crypto-enabled marketplace, and the original partnership and integration of MUE to the website was impressive enough. But the merger of the two is massive for potential userbase growth of MUE. Good work. Further, the website has been updated to include all of these new additions to the team.

Website:

https://www.monetaryunit.org/

Firstly, I’d like to say the website is well-branded with regards to colour-scheme, and screams MonetaryUnit as soon as the homepage loads. However, I am not overly impressed with the rest of it. The site is far less information-dense and resource-dense than would be optimal – a website is, after all, usually the first point-of-reference for new users. Further, it is not as easy or intuitive to navigate as many other websites in the space, by projects of equal (or smaller) size. In general, there needs to be more consistency with the design, as some fonts are used for certain copy and others elsewhere, and an update of the UI/UX would be of great service to the project, I think. The Why MUE? section is great; clear and concise and informative – the website needs more of this.

The block explorer is solid and functional, but is not linked in the navigation menu, making it very difficult to find without a direct link. The roadmap isn’t linked anywhere on the website either; more optimally, there should be a native infographic for new users to understand the past, present and future of the project.

Oddly enough, there is a beautiful branding guide linked in the navigation menu. This is amazing, and yet doesn’t seem to be consistently applied across the website.

There is, however, a dedicated forum, but this is hosted on a separate website, and (again) not linked in the main website. Cohesion is paramount. Make things native or at least seamless to navigate to optimise community and userbase growth. A regularly updated blog would be perfect, given the plethora of updates and developments being pushed out elsewhere in snippets. The podcast that is being produced and uploaded to YouTube should also have its own section on the website – make the MonetaryUnit site the one-stop shop for everything MUE; having resources and tools fragmented all over the place does nothing for growth.

Roadmap:

https://tree.taiga.io/project/monetaryunit-monetaryunit/kanban

Whilst not the most user-friendly way to present the MUE roadmap, it is certainly comprehensive and ambitious – as seems to be recurring theme.

Before I dissect the roadmap by sub-section, I’d like to mention that brief descriptions of the goals would be super useful so that new users know exactly what is being focused on and why.

Currently in progress: GSPoint loyalty scheme; MUEX.io (business card cold storage wallets – nice); muewallet.com (web staking wallet); and MUE integration to Coinomi.

Ready for testing: MUE on Ledger; and CryptoFeed.io (altcoin data and statistics).

Live now: Bittylicious integration; MUE 2.0; shared masternodes; Flubit.com integration; and governance system for budgets.

Done: Public block explorer; StartMy.io (crowdfunding for cryptocurrency projects); and MUE Whitepaper (which isn’t linked anywhere, as I’ll come to in the next section).

Ideas: Cloud Staking; web wallet; MUE casino; investment shares; sidechains; and escrow.

Overall, there is a lot to be impressed by in past achievements and much to look forward to going forward, but the roadmap itself could be far more effective at informing new users. Make an infographic version and write brief descriptions of each of the goals, alongside some sort of expected delivery date for each so that progress can be measured accurately by the MUE community.

Whitepaper:

https://docs.google.com/document/d/1r4-LA-GTkmw1YJpw49ru5cAOGllIYzplFSR70FVEsN8/edit

For some reason, the whitepaper is linked nowhere outside of the Taiga roadmap. It is possibly because it is in need of updating (the whitepaper is dated June 2014), but as it is the only whitepaper currently available, I’ll make do.

The whitepaper is brief, at a length of 5 pages, but jargon-free, clear, concise and informative – everything you want in a whitepaper besides a degree of depth. The primary aim of the project is stated immediately: Designed to be a virtual currency accessible to all. Further, the path to achievement of this aim is via an ecosystem of services and apps. This is certainly something that is being upheld by MonetaryUnit.

Contrasts against Bitcoin are provided to highlight the difference between it (often seen as a store of value first and foremost) and MUE (primarily a means of payment). This establishes the use-case. There are then clear points provided on why it is suitable for this purpose (faster block-times, low transaction fees, block size can be increased via governance system etc.). We are then shown the emission model, with 120+ years of supply emission before maximum supply of 4bn MUE is reached. Lastly, an explanation is provided as to how the multilayer Proof-of-Work/Proof-of-Stake hybrid solves potential 51% attacks – MUE is now fully Proof-of-Stake, having suffered a 51% attack last September.

Overall, the whitepaper simply needs fleshing out and updating, but the team are aware of this.

Wallets:

Windows, Mac and Linux wallets are available, as are Android and iOS mobile wallets.

The Windows binary was flagged by Avast but this is common in first launch of Qt wallets. Other than that, the wallet is functional, fairly well-branded (though it could be more visually appealing) and, most importantly, it does not occupy a large amount of CPU when running.

Again, this just needs updating, particularly for a payments-focused coin, as the potential userbase may not be familiar with the user-interface of these wallets. Make it seamless for them to store and transact the coin by redesigning the UI/UX of the local wallets and by providing a web wallet (which is in development).

General:

In general, the most significant development achievements have been the Flubit integration (the significance of which, I believe, is very much underplayed by the market as a whole at present, as a symptom of the macro market conditions) and the various ‘assets’ created by MonetaryUnit to function as services for the utility of MUE. These are StartMy.io, CryptoFeed.io, CoinBuy.io, MUEX.io and, of course, Flubit.com (now that they are as one). Further, I think the migration to fully Proof-of-Stake was the right decision.

As for the future, I look forward to seeing MonetaryUnit on Ledger and to the launch of the cold storage business cards (as this is a potential additional revenue stream). Another, more lucrative, revenue stream would be the MUE casino…

The launch of the web wallet goes without saying as a useful addition to the MonetaryUnit toolbox, as it will greatly streamline the ability to transact in MUE online.

With regards to innovation, that’s not really what MonetaryUnit is about. They’ve hit a home run with their partnership and merger with Flubit, and that is what needs to be capitalised on more than anything going forward…

Lastly, concerning the project’s funding, 10% of the block reward is currently allocated to the budget, amounting to 3.15mn MUE annually, or a little over $60,000 a year. Whilst a solid amount, this is likely not enough to really push the growth of the project, and those aforementioned revenue streams will help alleviate the burden of self-funding and any potential clearout of the budget due to unforeseen future issues. Also, if the price of MUE falls, so does the purchasing power of the budget, and with it fails the ability to continue development. This is a single point-of-failure. I’d strongly suggest thinking about additional revenue streams to those mentioned.

Further, I would suggest going all-in on establishing the brand identity of the project, using mediums such as the podcast (and ideally a blog, also) to generate an audience, inform the community, and ultimately entice customers into transacting with MUE. The ‘15%-off for paying with MUE’ incentive on Flubit.com is a perfect start.

To conclude this section on the fundamentals of MonetaryUnit, I’d also like to implore the team to make the project more cohesive in its various links, tools, components and resources. There must be a clear and smooth path of navigation through the MUE ecosystem.


Technical

Firstly, the Weekly chart depicts something of great interest; the opening price of MonetaryUnit’s price-history on Bittrex (from almost four years ago) has formed a level of support for the current range, indicating a lack of willingness to sell below this historical level.

For further analysis, we must shift our view to the Daily, however. Support at a little over 1000 satoshis has since turned resistance, and MUE’s decline from the highs of summer 2017 (18 months ago) finally looks to have found a bottom. A range has formed between ~300 and ~660 satoshis, which has been in play for around four months. Buying interest seems to be growing, and, around Christmas, over 25% of the circulating supply was traded within 24 hours. These are all the signs of accumulation, made more certain by the earlier rich-list analysis.

With regards to current prices for a long-term position, I’d be a fool to say anything other than that you are effectively paying the same price for MUE today as many did in 2015, except with all the developments and partnerships that have come since at little extra cost. This seems like a low-risk, high-reward proposition to me. I will be entering a long-term position, with an aim of an average 450-satoshi entry price. A higher time-frame close above 1100 satoshis would signal a reversal and the beginning of a new bull cycle, so those who are more risk-averse should perhaps wait until that time…

And thus concludes my analysis of MonetaryUnit.


Conclusion

This report is now over 6,000 words, and it is time to draw it to a close.

My final grading for MonetaryUnit is 7 out of 10. There is clearly a lot of promise for MUE going forward, especially with the recent addition of the Flubit team to their own. And the strong performance in significant metrics, coupled with the current price, cannot go without mention for those of us looking to turn a profit. However, there is much that is restricting the growth of the project, but all of it is seemingly easy to fix, if the team resolve to do so.

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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The Application Of Risk

Risk is an elusive concept to cover, and certainly a much misunderstood one. It is defined in different ways for different purposes but it is critical to fully understand what constitutes risk in order to find sustained success in any speculative venture.

Depending on the context, risk can mean the expectation of volatility and illiquidity: This market is one of great risk. It can also be an albeit abstract measurement of the likelihood of success or failure: I believe this is a low-risk proposition. Lastly, risk can be a calculation related to exposure and downside versus upside potential: I have £5,000 at risk here, though my returns could be as great as £15,000. This latter definition is the one most commonly used by traders, but I believe an understanding of them all is particularly useful for profitable speculation. Only by seeing the full picture of market volatility, exposure and risk versus reward can we then come to some sort of conclusion on the second definition; whether our current speculations will prove successful. In fact, part of the full picture of risk is illuminated by the price-history of the market, depicting where, in the past, similar scenarios to those we are presently expecting have seen success or failure.

This post will, I hope, serve as foundational material for those who are unfamiliar with applying the many aspects of risk to their speculative positions. I will run through the process for each of the three relevant definitions of risk and how they each relate to the full picture.

Firstly, however, I’d like to emphasise the most essential point concerning risk: Particularly when speculating in the cryptosphere, the thing that determines whether one masters risk management or not is whether one invests money they cannot afford to lose. If you start out with non-discretionary income, you’ve already lost the game. The other components of risk management are only relevant if your speculations are comprised of money you can afford to lose. If this is not the case, the likelihood is that no amount of searching out low-risk, high-reward opportunities is going to save you, as your emotions are inextricable from your positions.

For those that the above applies to, stop reading and reorganise your portfolio until it resembles something that you could lose the entirety of tomorrow and it would not affect your quality of life. For the rest of you, let’s crack on.


Risk, as in volatility and illiquidity:

When a market experiences high levels of volatility (as is the case with all cryptocurrencies), it is said to be risky. Similarly, when a market is highly illiquid, there is inherent risk in exposing your capital to said market, as there is a possibility that, once a position is entered, it would be very difficult or costly to exit until market conditions improve sufficiently.

These aspects of risk management are critical to one’s speculative positions, as they are very much linked to personality and thus the quality of the decisions one makes. If you are highly risk-averse by nature, entering a position in a more volatile and illiquid market is perhaps not the brightest idea; if you are risk-tolerant, an illiquid market may not bother you and high volatility may not affect your trading decisions. In either case, having a clear understanding of these aspects of risk prior to entering a new position is a contributing factor to the likelihood of success.

But how can one determine volatility and illiquidity as a component of risk management? Most commonly, these are abstract terms for the general market participant, relative to the more concrete calculations one makes for exposure and reward-to-risk. However, simple calculations can be made to make things clearer.

For volatility:

  1. I tend to first determine the duration that I’m expecting to hold a position for. In my case, this almost always tends to be over a month. We’ll use a month for the purposes of clarification.
  2. Given this trade duration, I collate (in a spreadsheet) 30 days of historical price data for the coin I’m interested in using Coinmarketcap’s Historical Data tab.
  3. I delete everything except the Close Price data.
  4. I then calculate the average Close Price for the 30 days. This is my benchmark figure.
  5. Using this average Close Price, I calculate the percentage change from it to the highest Close Price during the month.
  6. I do the same for the lowest Close Price, also.
  7. For example, if the average price was $1, the highest price was $1.50 and the lowest price was $0.30, this would give me figures of 50% and -70%.
  8. The final step is to multiply these figures together to find a volatility ratio for the given duration. In this case, it would be -0.35 over the past 30 days.
  9. The closer to 0, the less volatile the market during that period of time, and vice-versa.

This process is particularly useful for cross-comparing the volatility of altcoins over the same time-period. It is rudimentary in its methodology, but gives us some form of concrete figure to apply to our risk management. Those that are risk-averse may opt to only enter positions in coins that have volatility between 0 and -0.1, for example.

For liquidity:

  1. This is even simpler than the calculations made for volatility. The first step is to calculate the buy support across listed exchanges for the coin you’re interested in, within 10% of the current price. Calculate this in BTC-denomination.
  2. Now divide this figure by the market cap of the coin (again, use the BTC figure).
  3. Multiply the result by 100 to get the buy support as a percentage of the market cap.
  4. Anything lower than 0.1% is highly illiquid. Anything higher than 1% is highly liquid. Most altcoins tend to be between these two figures.
  5. Do this once a day for a week and calculate the average to get a more reliable figure.

Now, the most important thing to do with this information is devise a benchmark that works for your personal relationship with risk. And stick to it. For some, this will be a commitment to only entering positions in coins with greater than 0.5% liquidity and between 0 and -0.05 volatility. Just make sure you know what works for you.


Risk, as in likelihood of success or failure:

This second definition of risk is, as mentioned earlier, more abstract than the other two. We often use low-risk synonymously with high-probability in everyday conversation, or high-risk synonymously with low-probability. The utility for speculators comes from finding historically similar scenarios to those we are expecting to profit from and evaluating their successes and failures. To make this clearer, let’s use a simplistic example:

First we must define the terms of the position we are considering. Let’s say I am considering an entry on X at 3000 satoshis. I am anticipating prices above 6000 satoshis, and would consider my trade idea incorrect below 2000 satoshis (which would be my soft stop-loss). I am willing to hold the position for 3 months.

Given these points-of-reference, we would simply backtest the trade using the coin’s price-history. Every time price reaches 3000 satoshis, we would enter an imaginary trade; does price reach 6000 satoshis? Does it reach it within 3 months? How many times would the position be stopped out? Ask all the relevant questions and compile an historical evaluation of your trade idea. If we’re looking at a trade that has been successful 80% of the time in the coin’s price-history, it gives us some degree of confidence that our own position will be successful, also. Of course, to be able to evaluate your idea to this degree, you first need to know all the critical information regarding exposure, entries, exits and risk versus reward. As such, the most important aspect of risk management outside of using capital you can afford to lose is found in the third definition.


Risk, as in exposure and returns:

Risk management for traders is mostly concerned with this third definition of risk that concerns all things quantitative, and for good reason. For me, calculating exposure is a prerequisite to entering a new position. It is the primary element upon which the rest of the trade is structured. Speculating without a clearly defined plan for capital exposure is a sure-fire way to wipe out your portfolio, and we don’t want that, if we can help it…

I will, at a later date, be writing an in-depth post on position sizing, which itself is a integral part of managing exposure, but for now let’s consider the basics. You could, of course, create an intricate plan of position sizing based on the volatility and liquidity calculations I mentioned earlier – almost as though you’re basing your risk on, well… risk itself. Riskception. But for the purposes of this post, let’s stick to the most common method of determining position size, which is focused on market cap or network value, however you like to refer to it:

  1. Firstly, you need to calculate the value of your portfolio. This is the base figure that you will use to calculate exposure for a new position. Let’s say it is 10 BTC, or ~$40,000 at current prices.
  2. Now, figure out whether the coin you are considering a position in is a microcap, lowcap, midcap, highcap or megacap. These are arbitrary terms, of course, but I can only offer my approach here. I categorise these using the following figures: microcap = 0-25 BTC; lowcap = 25-250 BTC; midcap = 250-2500 BTC; highcap = 2500-25,000 BTC; and megacap = 25,000 BTC or higher. These, again, are subjective numbers based on my own experiences in the space. If you wanted to use $ figures (though I advise against it, as these are heavily dependent upon the price of Bitcoin), then I’d opt for 0-$250k for a microcap; $250k-$2.5mn for a lowcap; $2.5mn-$25mn for a midcap; $25mn-$250mn for a highcap; and $250mn or higher for a megacap.
  3. Now, for each of these market cap-based groups, I have a different band of exposure based on the original value of my portfolio prior to entering the position: 0-1% for microcaps; 1-3% for lowcaps; 3-5% for midcaps; 5-10% for highcaps; and 10% or more for megacaps. I do not commit to the minimum percentage exposure within these bands, but I explicitly do not exceed the maximum for the given market cap. For example, I might choose to only allocate 5% of my capital to a megacap, but I would never allocate 5% of my capital to a microcap.
  4. Of course, there are some caveats here. Firstly, this approach is known as fixed-risk, wherein one allocates a fixed percentage of capital to a position often in lieue of setting a stop loss (but not always, as we’ll come to shortly). The position is then held until: it reaches its target price(s); it fails to reach its target within the predetermined duration of the trade, at which point it is exited; or, the coin dies. This is a common approach with microcaps and lowcaps, but makes less sense when one is concerned with the larger coins.
  5. When it is these larger coins that are being considered, the bands of exposure are still used, but a stop-loss (hard or soft) is added as a second risk-mitigator. My approach to stop-losses is that they should be based on technical factors rather than predetermined percentages, such as the break of long-term support or something similar, but it is often useful to have a maximum percentage stop-loss in place. For example, let’s say we were looking to enter a position in ABC. ABC is a highcap and so our capital exposure is a maximum of 10% of the value of our portfolio. Further, since it is a highcap, we choose to place a stop-loss. The maximum we are happy to lose is 25% of the initial capital, and thus a stop-loss is placed 25% below the average entry price. This equates to 2.5% of the value of our portfolio, which is our maximum capital loss.

Now, there are numerous other avenues one could go down when devising an approach to risk management, but I believe this approach will suffice for most. The issue is that stop-losses can and must (in my opinion) be linked to the risk versus reward of the trade. So let’s discuss the final aspect of risk for this post: returns.

The goal in investing is asymmetry – Howard Marks

Asymmetrical opportunities are the real secret to profitable speculation and proper risk management. Finding opportunities that present returns many multiples greater than the potential risk is what is so special about this space – they are ubiquitous.

Reward is almost always predicated on the price paid for the position, which is why buying low is so important. It allows for the low-risk (here meaning minimal amount of capital loss), high-reward opportunities. The most important thing to take away about risk versus reward is to exclusively go after opportunities that offer at least twice the reward against the risk. So, if, after calculating your capital exposure and your stop-loss, you have a maximum capital loss of 2.5% of the value of your portfolio (as in the earlier example), then your opportunity must present a reward equating to 5%. This is why the fixed-risk approach is suitable for the smaller altcoins; the potential rewards are so large that the trades are often asymmetrical in our favour despite the potential loss of the entire position.

Now, to conclude this post, how do we tie it all together? Well, what you can do is create a risk framework that all future trades must adhere to, and this would be based on your own level of risk tolerance. For example, you could decide to only enter positions in coins that have 0.5% liquidity, between 0-0.1 volatility over the past 90 days, at least one instance of success of a similar scenario in the coin’s price-history and at least 3:1 reward-to-risk. Play around with the numbers to see what works for you – the important thing is to have a consistent framework to which you always adhere.

I hope this post has proved useful. Feel free to leave any comments and questions below and I’ll get back to you!


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