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N.B: The following Coin Report on Quant is community-selected.
Welcome to the 24th Coin Report. In today’s report, I will be assessing the fundamental and technical strengths and weaknesses of Quant. 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!
I think it’s important to begin by mentioning that Quant was not actually scheduled to have a report written, as it placed 3rd in the Q2 community poll, behind XDAG and Ryo.
However, having done preliminary research on XDAG for its report, I found there to be numerous gaps that would have necessitated a very low rating, despite potential fundamental soundness. In short , the project lacked any degree of liquidity or trade volume and was not listed on any recognised exchanges. As such, I decided to postpone that report until a later date, when these stipulations have been met, so that the report will be more substantial and reflect more fairly on the project itself.
Thus, the report will now be written on Quant; a project that has a great deal of support on Twitter but one that I, until completing my research, had little clue about.
I hope this report will prove objective where it must be and fair on more subjective matters. For those who’d like to learn a little more about Quant prior to reading this report, here are some primary links:
Sector: Blockchain Operating System
Exchanges: Hotbit, IDEX, Upbit, Bittrex, FatBTC, CoinExchange and COSS
Quant Network was incorporated in October 2017 in Switzerland, acting as the company overseeing the development of a technology named Overledger. Overledger was conceptualised in March 2017 as a blockchain operating system, facilitating communication between multiple blockchains.
The project itself launched with an ICO in Q1 2018, during which QNT – an ERC-20 token – was created. This ICO raised $11m and 9.7mn QNT of an available 31mn QNT were distributed to retail and institutional investors. Originally, the QNT token was set to have a maximum supply of 45.467mn QNT, but around 30mn QNT have been burned, comprising of unsold tokens from the ICO and a partial burning of founders’ funds amounting to 9.5mn QNT in September 2018. Thus, ~14.5mn QNT are in existence, with 4.5mn owned by the Quant Network team.
As the project was only launched a little over a year ago, and the token was first listed on exchanges in August 2018, there is only around 9 months of price-history available for QNT. Whilst I shall dive into the details of these 9 months a little later, for now it will suffice to say that QNT formed its all-time high of 160k satoshis in February 2019, which coincided with its all-time high against the Dollar of around $5.90.
Quant Network is seeking to utilise its Overledger technology to facilitate seamless communications between different DLTs, functioning as the world’s first blockchain operating system.
As stated in its Business Paper:
“Overledger is the blockchain Operating System (OS) of the future. It empowers applications to function across multiple blockchains. Overledger securely removes barriers prohibiting communication across multiple blockchains, providing endless possibilities for data and applications.”
This is certainly a novel proposal and one that I had not yet come across; though I have found that there are a number of projects dealing with cross-chain interoperability of blockchain assets, I have not found one seeking to do quite what Quant is seeking to do. I am eager to discover the progress that has been made since its inception…
Let’s begin with some Metric Analysis:
Below are listed a number of important metrics, all of which are accurate as of 10th June 2019. For anyone reading this who has yet to read a Coin Report, it might be worth reading this section of the first report, where any potentially unfamiliar terms are explained. For any terms or metrics specific to this post, I will provide explanations besides the figures.
Price: $3.59 (46,378 satoshis)
Circulating Supply: 9,777,236 QNT
Total Supply: 14,612,493 QNT
Exchange Volume: $3.99mn
Network Value: $35.16mn (4534.39BTC)
Maximum Supply: 14,612,493 QNT
% of Max. Supply Minted: 100%
Network Value at Max. Supply: $52.548mn
Exchange Volume-to-Network Value: 11.38%
Average Price (30-Day): $2.44
Average Exchange Volume (30-Day): $2.7mn
Average Network Value (30-Day): $23.898mn
Average Exchange Volume (30-Day)-to-Network Value: 11.3%
Volatility* (30-Day): -0.1361
Average Daily On-Chain Transactions (7-Day): 347
Average Daily Transactional Value** (7-Day): $4.163mn (source)
NVT*** (7-Day): 8.44
% Price Change USD (30-Day): +86.6%
% Price Change USD (1-Year): N/A
USD All-Time High: $5.85
% From USD All-Time High: -38%
Premine % of Max. Supply: N/A
Premine Location: N/A
Liquidity (calculated as the sum of BTC in the buy-side with 10% of current price across all exchanges): 6.55 BTC
Liquidity-to-Network Value %: 0.14%
Supply Available on Exchanges: 202,086 QNT
% of Circulating Supply Available on Exchanges: 2.07%
*Volatility is calculated by taking the average price over the given time-period, calculating the difference between it and the highest price and it and the lowest price over that same time-period, and multiplying those figures together. The closer to 0, the less volatility during that period, and vice-versa. Read this for more on volatility.
**Transactional Value in $ is calculated by taking the daily transactional value in Quant and multiplying it by price. This particular figure is skewed by the transactions that occurred on 8th June, as can be seen in CoinPaprika’s chart.
***NVT is calculated by dividing the Network Value by the Average Daily Transactional Value. See here for more on NVT.
Supply Emission & Inflation:
Block Reward Schedule: N/A
Average Block Time: N/A
Current Block Height: N/A
Annual Supply Emission: 0
Annual Inflation Rate: 0%
Circulating Supply in 365 Days: 9,777,236 QNT
Address Count: 3,591
Supply Held By Top 10 Addresses: 49.29%
Supply Held By Top 20 Addresses: 58.96%
Supply Held By Top 100 Addresses: 77.49%
Inactive Address Count in Top 20 (30 Days of No Activity): 10
ICO Token Sale: 19th March – 30th April 2018
Total Tokens: 45,467,000 QNT
Tokens Available For Sale: 31,000,000 QNT
Average ICO Price Per Token (including pre-sale): $1.13
Total Raised: $11,000,000
Tokens Sold: 9,777,236 QNT
Tokens Burned: 9,545,765 QNT (source)
There’s rather a lot to work through here, but I’d like to begin as this section often does; with a glance at the metrics most related to transactional activity, as this gives us an indication of the non-speculative demand for any given project.
Now, I’d like to mention, in case anyone missed the footnote in the relevant section above, that QNT’s on-chain transactional value has been skewed significantly by anomalous activity on the 8th June. Nonetheless, I have included this data within my calculations.
According to EtherScan, QNT experienced an average of 347 transactions per day for the past 7 days, amounting to Average Daily On-Chain Transactional Value of $4.163mn. Now, that is huge. So huge, in fact, that it gives QNT a 7-day NVT ratio of 8.44; indicative of serious undervaluation, even relative to Bitcoin, which currently has a NVT ratio of about 18. This is, as I mentioned, skewed by the unusually high transactional volume on the 8th June. If I discount that day of data, the Average Daily On-Chain Transactional Value amounts to a still-impressive $1.037mn, which would give QNT a NVT ratio of about 35. Clearly, there is a great deal of non-speculative interest in the project, at present.
Now, I’d like to work through the remaining General metrics, before taking a look at Quant’s (non-existent) Supply Emission and concluding this section with some Distribution analysis.
Firstly, let’s take a look at Quant’s Volatility, which came in particularly high. I calculated its 30-day figure to be -0.1361, which places Quant 3rd-highest amongst coins previously reported on, indicating to me that its accumulation period is now over and thus perhaps prime entries are passed. We shall delve into this in more detail in the Technical section.
Now, let’s take a look at the two Liquidity-related metrics:
For buy-side Liquidity, I calculated that there was 6.55 BTC of buy support within 10% of current prices across listed exchanges, equating to 0.14% of its Network Value. This is not particularly strong given that it is listed on one of the larger exchanges; Bittrex. Most coins that suffer from poor buy-side liquidity are those that remain on smaller exchanges. This places Quant 5th-from-bottom of coins previously reported on…
Looking at the sell-side, I calculated there to be 202,086 QNT available for purchase on the orderbooks, equating to 2.07% of the circulating supply. Whilst marginally better than its buy-side counterpart, this still places Quant 6th-highest for Circulating Supply Available on Exchanges, indicating that there is not an overwhelming desire to hold QNT at present.
Before I move on from the General metrics, let’s take a look at those related to volume:
Quant traded ~$4m of Exchange Volume over the past 24 hours, equating to 11.38% of its Network Value; a monumental figure. Further, its Average Daily Volume for the past 30 days was $2.7mn, equating to 11.3% of its Average Network Value for the same period. These are impressive figures and indicative of strong speculative interest; however, around half of the volume is likely a symptom of wash-trading on less reliable exchanges like FatBTC and Hotbit. Nonetheless, even with this wash volume accounted for, the figures are strong and the market is clearly interested in Quant.
With regards to Quant’s supply emission, in short, there is none, as tends to be the case with ICO’d ERC-20 tokens. Thus, annual inflation is a wonderful 0%; great for the speculator. This, in essence, means that there should be no real headwinds for price growth.
Let’s wrap up this section with a look at Distribution:
Looking at the Quant rich-list, I found that the top 10 addresses control 36.49% of the original maximum supply (not total nor circulating supply) of ~45.7mn QNT; the top 20 control 39.85%; and the top 100 control 45.94%.
Now, whilst it may seem rather concentrated within the top 10 and yet strangely decentralised amongst the top 100, the reason for this is simply that the #1 richest address is the burn address of the Quant team, equating to 9.5mn QNT. Further, Etherscan does not account for the change in supply to Quant’s current total supply of 14.6mn.
Thus, in reality, the figures are entirely different:
The top 10 control 49.29% of the current total supply of 14.6mn QNT; the top 20 control 58.96%; and the top 100 control 77.49%.
With regards to the activity of these large holders, 10 of the top 20 were inactive in the past 90 days, and the 4th and 8th-richest addresses belong to IDEX and Bittrex, respectively. Of the remaining addresses. the 2nd-richest added 2.6mn QNT in the past 3 days; the 3rd-richest added 1mn in the past 3 days; the 9th-richest added 4.5k; the 11th-richest added 70k; the 12th-richest distributed 1k; the 13th-richest distributed 2.5k; and the 14th-richest added 40k. Overall, there is clearly buying taking place amongst the larger holders.
Now, onto the Quant 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 four main platforms to examine: Twitter, Facebook, Telegram and Discord.
Quant is present on all platforms except Facebook and Discord. To begin, let’s look at the various social metrics that I calculated from the Quant Twitter account:
Twitter Followers: 7,131
Average Twitter Engagement: 2.33%
Facebook Likes: N/A
Facebook Posts (30-Day): N/A
Average Facebook Engagement: N/A
As usual, I will be using RivalIQ‘s social benchmark report for evaluation purposes.
Quant has a relatively small Twitter audience of 7,131, which places it 7th-bottom amongst coins previously reported on. However, it has exceptional engagement, with its average engagement rate at 2.33%. This is 48.5x greater than the average across all industries and 291x greater than the average of the Media industry. Further, it is the 4th-highest of all coins from prior reports. Very impressive. There is a palpable excitement around Quant on Twitter…
The Quant community Telegram group is comprised of 4,895 members, whilst its Announcements channel has 1,688 members. I shall be focusing on its community group here.
The pinned message contains all relevant resources for new users, with links to exchanges and the latest news, as well as social links and token information. It also mentions that the Quant team join the group once fortnightly to answer community questions.
Given the relatively small size of the group, the activity level is very impressive, as I failed to even keep up with the incoming messages as I scrolled through to discover more about the project. The discussion is truly 24/7, with the community clearly committed to the project and excited about its future.
Over the past week or so of discussion, I found that Quant has recently partnered with SIA to deliver interoperability to banks and financial institutions by integrating Overledger into their private infrastructure network connecting 570 banks. This is huge news for the legitimacy and longevity of the project and its technology. It is also huge for the value of the QNT token, as use of Overledger technology necessitates the purchase of QNT. There are also numerous press releases regarding the partnership posted to the Telegram.
Further, I found that Quant is currently in negotiations with top-tier exchanges; that Overledger usage will be paid for with various licensing fees at a fixed fiat rate, but that the equivalent QNT will be bought up by the Quant Treasury and locked up for the license period, thus reducing friction for financial institutions looking to utilise the technology; that the team is currently hiring; that there are currently over 200 private organisations developing on the platform; that QNT will remain an ERC-20 token, as it is perfect for utility purposes; that the Enterprise version of Overledger is already live and the Community version is likely going live this quarter; that QNT will be used as the means by which digital asset transfers between banks are signed and encrypted (interoperability); that the public SDK is currently being worked on; that a new office is in the process of being set up in another jurisdiction; and that, most signficantly, Overledger can be used to connect isolated networks, not just two differing DLTs.
Woah, there is a lot going on with Quant, clearly. In fact, there is almost too much for an individual to grasp without considerable hours spent researching; not a bad problem to have as a pioneering project, of course.
The Quant BitcoinTalk thread was created on March 26th, 2018, and has since generated 322 posts spanning 17 pages in 441 days. This equates to 0.73 posts per day, on average. However, in the past 90 days, the thread has had 15 posts via 7 individual posters, giving an average of 0.17 posts per day; a significant decline on an already low level of engagement.
Regarding the announcement itself, it revolves around Overledger and does not do much to incorporate Quant Network within it, describing the project as “the first Blockchain operating system that facilitates the development of multi-chain applications.” It also describes use-cases and features, such as connecting blockchains and connecting the Internet to the blockchain.
Most significantly, the problem being solved is emphasised, and that is the inability for blockchains to communicate with one another. The announcement asks the question, “Why can’t a smart contract executed on Ethereum be recognised by the Hyperledger blockchain?” Unfortunately, it doesn’t contain any basic information regarding the QNT token itself or the team, with no sign of any FAQ for potential new users.
Regarding recent content of the thread, in the past 90 days, Quant has been accepted into the Oracle ecosystem; listed on Upbit and CoinExchange; become an AWS partner; and been featured on Sky TV. Further, numerous AMAs have been pushed out, but there has been no engagement since early April.
Let’s move onto Quant’s 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:
There are 23 employees listed on LinkedIn and 3 listed on Github. There is no information regarding the team on the website.
It would be helpful as a potential new user or investor to have this information readily accessible. I did manage to find a little info on the team here.
Gilbert Verdian is Quant Network’s CEO, and is currently the chair of the UK’s national committee for Blockchain and DLT. He has over 20 years experience in information services. Colin Paterson is the company’s CTO, and he co-founded Trudera, which has created patented technology that
will be implemented in Overledger. There is also a Chief Architect with 30 years of experience, plus 4 core developers. Lastly, Guy Dietrich, MD of Rockefeller Capital, was recently appointed to the board. The project also has numerous advisors with experience in information technology, DLT, business management, governance and compliance. They are currently hiring.
There is a great deal of strength and professionalism here, and, having looked through their LinkedIn employees list, a balance that is rare for many projects in this space.
The website is a little lacklustre, relative to the rest of my findings during this research process. Whilst there is some moderate sense of brand identity, it isn’t particularly strong, and the overall design of the site is unengaging. The navigation menu does link to important aspects of the project, such as the products offered (Overledger, Atlas and GoVerify), but it is a little muddled; for example, why is Careers in the sub-menu for About Us? And why does About Us not contain any pages relating to the team behind the tech?
The homepage itself does a great job of highlighting the numerous use-cases developed by Quant, with concise but informative sections on interoperability and its advantages; the seamlessness facilitated by Overledger; and the “future-proof” nature of this service. Further down the homepage, we can find a brief description of Overledger and its benefits, alongside a similar feature on GoVerify; a product of Quant’s that “allows people to verify and check that any email, SMS, letter of phone call received is legitimate”. I’m surprised that a description of Quant Atlas isn’t native to the homepage also, if the other two primary solutions offered by Quant are. Atlas, as can be found on its own separate page, is a solution to cross-border Open Banking, providing a means by which users can make seamless payments to international banks.
Further still down the homepage, we find a list of Quant’s prestigious partners, such as Oracle, Hyperledger, Nvidia, pay.uk and AWS. There is also a slideshow of recent news events to remain updated and links to the Quant whitepaper and business paper.
Social links are all found in the footer.
Overall, the website is informative but there is much that could be done to improve it.
The roadmap is found in section 6 of the Business Paper, linked in the next section. It is not available on the website.
It is provided in text form within the Business Paper, with a historical timeline of events since the project’s inception, along with an indication as to the future vision of the project. From a user perspective, this could be made more accessible and more informative by simply having the roadmap native to the website and providing some sort of progression measure, as well as links to further information.
The roadmap begins with Overledger’s inception in July 2015, but it wasn’t until March 2017 that the Overledger operating system was conceptualised and not until October 2017 until Quant Network AG became incorporated; thus this marks the beginning of Quant as a business.
November and December 2017 saw the prototype Overledger developed, as well as a patent filed. Q1 2018 initiated the private sale of tokens to institutions, with March-April launching the public sale. In Q2 2018, TrustTag beta was released (if the roadmap was standalone, we’d need more details on these kinds of events, as this tells us too little). In Q3 2018, the Quant SaaS product was set to be released, with some patents filed. In Q1 2019, there is a mention of the Quant App Store, plus the Open Source SDK, but little else is mentioned. Finally, in Q3 2019, there is a mention of the Quant Enterprise Mapps (multi-chain applications) and Treaty Contracts.
Overall, this roadmap is very much bare-bones and insufficient. It needs more detail and to be standalone to ensure user accessibility.
The document is 29 pages in length and begins with an Executive Summary:
It describes Overledger as the “blockchain Operating System of the future. It empowers applications to function across multiple blockchains.” The key takeaway here is that they are seeking to solve communications problems between networks by facilitating seamless cross-chain interaction. The three use-cases emphasises are multi-chain applications, unlimited access to vendors and cross-chain data transfers, with the ultimate vision being trustless communication.
The Business Model section of the document discusses the value of the QNT token, with revenue streams for the business coming from four primary sources: transaction fees; Quant SaaS products; Quant Enterprise and Middleware products; and Licensing of Quant IP. Further, there will be a Quant App Store for multi-chain applications, where developers can release free or paid applications, with QNT acting as a gateway for usage of specific applications. In the Quant SaaS section, there is discussion of the patented TrustTag technology that will be utilised for verification purposes (now employed within GoVerify).
Tokenomics is one of the meatier sections of the document, with details provided of the proposed token sale that took place in Q1 2018, as detailed earlier in this report. Here, readers can find the initial allocation figures, though these are outdated following the supply burn of September 2018.
Finally, as discussed in the above section, there is a brief roadmap, with the document concluding with an Appendix
QNT can be stored on all compatible ERC-20 wallets.
Despite the fact that QNT only has around 8 months of price-history, the market cycle that has played out in that time is very much textbook, with the all-time high that formed at ~160k satoshis acting as QNT’s first euphoria, followed by a bear cycle that has led to a likely cyclical bottom being found at ~23k satoshis.
As can be seen on the chart, volume has been steadily rising since this bottom has been found, with price breaking the bearish market structure earlier this month, as it closed above 36k satoshis. Since then, price has struggled at the 200-day moving average, failing to close above the support turned resistance at ~46k satoshis. Nonetheless, it seems clear that a new cycle has begun, and that we are currently seeing the disbelief phase play out. The opportune entry for a cyclical position has, of course, passed, as the range between 23k-36k would have been the perfect buying opportunity. That said, those seeking to enter a position can do so here, with a stop-loss on a daily close below 36k satoshis (~20-25% of risk). More risk-averse speculators can enter with a stop at the 23k support level, though this presents 50% of downside risk.
This report is now over 4,000 words, and it is time to draw it to a close.
My final grading for Quant is 8 out of 10.*
* I really would love to give Quant a 9; in fact, it is deserving of a 9 simply for its developmental achievements thus far. However, my framework for grading necessitates greater liquidity for a 9 to be scored. I suspect that I shall have to update this score soon enough, as larger exchanges list the token.
Here, you can find my grading framework, for reference.
Lastly, here is a link to a Google Sheets file with any significant data from previous reports compiled for cross-comparative purposes. I will keep this updated as I continue to write these reports.
I hope this report has proved insightful and that you’ve enjoyed the read! Please do feel free to leave any questions in the Comments, and I’ll answer them as best I can.
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