Market Outlook #13

Market Outlook #13 (25th November 2018)

What a crazy week we’ve had across-the board. In this 13th instalment of the Market Outlook series, I’ll be dissecting the bloodbath that has ensued over the past few days in Bitcoin, Monero and Ethereum. I’ll also be taking a look at the super interesting price-action currently occuring in XRP, as well as highlighting one altcoin that seems to be looking bullish despite macro market conditions: Stakenet.

N.B: I’ve used log charts for a lot of this post primarily to improve the visibility of the moves.

Bitcoin:

Price: $3871.90

Market Cap: $67.344bn

Thoughts: Firstly, let’s take a second to appreciate that Bitcoin has dropped by more than 40% in two weeks… okay, second over. I hope that you guys are all still alive, and, more importantly, in a position to capitalise on prices that we haven’t seen since Q3 2017.

Now, the first chart I’ve posted is a simple fractal from 2014/15. The only reason I’ve posted this is so that we can visualise the price drop in percentage-terms and map it out to this year, to at least give an estimate as to what could be considered a ‘cheap’ price going forward. Those that bought BTC in 2015 at an 85% or greater discount from the all-time high were maximally rewarded when the subsequent bull cycle began. If we use a similar discount from the January highs of ~$20k, we’d need to see sub-$3k prices to capture maximal returns when the next bull cycle begins. This is a simplistic perspective using the fractal, but it is useful when used in conjunction with the subsequently printed price-action charts.

So, this past week has seen price drop into a Weekly bullish orderblock that has remained untouched for over a year. This is significant. Zooming into the Daily chart, we can see that price has also traded within the Daily bullish orderblock. There is some probability that any calls for new lows could be answered with a reversal from current prices, given this higher time-frame confluence. When we look at the 15-minute chart, we can also see the beginnings of a short-term reversal, with price breaking market structure to the upside and respecting the breaker. This is indicative of a potential relief rally to the $4.2-4.3k area. However, this is only valid whilst the breaker remains intact. If the breaker gives way, new lows are highly probable.

However, given the fractal we mentioned earlier that would price ‘cheap’ Bitcoin below $3k, what would draw price to such levels? Well, the level of prior resistance turned support at around $3k is what led to a continuation of the momentum that pushed prices to just shy of $20k in January. Hence, there is a great deal of liquidity resting below that swing-low. Price has already swept the stops below $5400 without there being sufficient momentum for a reversal, so the next obvious place for price to seek out would be those lows below $3k. There is also an untested Weekly bullish orderblock resting just below that level at ~$2.5k. *If* we do not see a sustained reversal from within the current orderblock, this is where I expect price to move towards. There has, however, been significant trading volume this week – the highest since in 8 months on Bitfinex – and, as such, I wouldn’t rule out a longer-term reversal forming from these levels.

Either way, if you have capital set aside for future investment, scaling into spot Bitcoin from here seems a no-brainer with a sufficient time-horizon.


Monero:

XMR/USD

XMR/BTC

Price: $57.06 (0.01485 BTC)

Market Cap: $947.042mn (246,547 BTC)

Thoughts: Monero has swept the Weekly swing-low against the Dollar at just shy of $65. This low had been untouched for 13 months. Price has traded into a level of prior resistance at $58, though I would be surprised to see anything more than a short-term bounce at these prices. This is primarily because of the meaty Weekly bullish orderblock sitting sitting at $45. Against BTC, Monero is still riding the two-year uptrend, and is currently experiencing a slow bleed towards the Daily bullish orderblock at 0.014 BTC. This level has confluence with the two-year trendline support, and I do not anticipate the ~0.013 BTC lows to give way easily. Short-term support has become resistance at 0.0155 BTC and price continues to trade below its short-term trendline resistance.


Ethereum:

ETH/USD

ETH/BTC

Price: $110.03 (0.02856 BTC)

Market Cap: $11.379bn (2,954,347 BTC)

Thoughts: Well, where Ethereum seemed to be positioned so strongly just a couple of weeks ago, it now looks the weakest against the Dollar. There are very few higher time-frame levels of support on ETH/USD. The most significant ones are at $95, $59 and ~$49. These latter two levels are around a 50% drop away still, and are situated around the next Weekly bullish orderblock. That would be a huge drop given where BTC/USD and ETH/BTC are sitting. It would either imply another 50% drop in Bitcoin’s price (if ETH/BTC is stable), which, whilst not improbable, I find highly unlikely; or it would mean ETH/BTC breaks a number of critical support levels, which is more probable.

However, this past week’s dump has meant that the Weekly swing-low that formed in July 2017 has now been swept, and there are a number of reasons to think that we’ll find some support at the levels highlighted on the Daily chart. The ~$100 level is an area of prior resistance that seems to be holding for now, whilst $92 is the next Daily bullish orderblock. I would expect this area to provide at least some short-term relief. That being said, there is an untouched pool of stops resting below $77 with highly illiquid price-action below it that price may seek to fill in. The following level of support would be the prior resistance at $59…

Looking at the 4H ETH/BTC chart, we can see that price has traded into a 4H bullish orderblock, with prior support at 0.0308 BTC now resistance. The short-term trendline resistance has, however, been broken. If price can sustain this breakout and remain above the orderblock, I’d expect a recovery to that former support level.


XRP:

XRP/USD

XRP/BTC

Price: $0.35 (9112 satoshis)

Market Cap: $14.15bn (3,674,547 BTC)

Thoughts: Ah, XRP – the coin that everyone loves to hate. Despite this communal loathing, no one can deny how fascinating the price-action of XRP has been over this past week. Where most altcoins have fallen against BTC due to the recent volatility, XRP has rallied. This hasn’t, of course, stopped it falling against the Dollar.

There is no doubt that XRP/BTC is exhibiting bullish market structure, with higher-highs and higher-lows in continual formation since early October. A bounce at current levels of prior resistance potentially turned support would imply an imminent new high above ~11k satoshis. When you look at this in conjunction with XRP/USD, there seems to be a highly profitable opportunity in play. The Weekly chart for XRP against the Dollar shows that price is trading inside a Weekly bullish orderblock and between two levels of prior resistance. Dropping down into the Daily chart shows that price has swept the liqudity below $0.372 (also a level of prior resistance turned support) and caught a bounce from the equilibrium (50%) of the orderblock (which is also a level of prior support). This is a low-risk, high-reward play.


Stakenet:

XSN/BTC

Price: $0.10 (2621 satoshis)

Market Cap: $7.449mn (1,938 BTC)

Thoughts: After publishing my Coin Report on Stakenet last week, I hadn’t actually paid any attention to its recent price-action. It seems that Stakenet gives zero fucks about what Bitcoin is doing…

The Daily chart is printing what looks to be a series of extended higher-lows and higher-highs, but price has run into resistance at ~3200 satoshis. However, volume has been rising for three months straight and levels of prior resistance are becoming short-term support. *If* this momentum can be sustained and the Daily can close above 3200 satoshis, there’s a likelihood that Stakenet is beginning a new bull cycle.

I hope you’ve enjoyed this 13th instalment of Market Outlook. Stay safe out there.


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Coin Report #5: Stakenet

N.B: This Coin Report has been selected by the readers of the blog, with Stakenet winning the poll with 33% of  the ~5,000 votes. Congratulations!

Welcome to the fifth Coin Report. In today’s report, I’ll be covering Stakenet, looking primarily at its fundamental strengths and weaknesses, followed by analysis of its price-history and concluding with a final grading out of 5. I hope you enjoy the read!


Introduction

Stakenet has been a coin of great interest to me for a long time. I first came across the project back when it was POSW, prior to its rebranding and chain swap. Back then, I saw a coin with a great chart, solid fundamentals and some exciting goals. I think I originally bought in around 1200 satoshis, and held through the swap to XSN (its current ticker), all the way to its peak around 11k satoshis this past summer. I then noticed a Complacency shoulder forming on the chart, and exited my entire position a little below 10k satoshis, content with my profits but disappointed with a couple of things: firstly, that XSN did not quite reach the heights that I expected of that cycle; and secondly, that I had to exit my position, as I did like the project and had spent a lot of time learning about it. Regardless, I am first and foremost concerned with turning a profit on my trades, and thus any admiration I had for Stakenet had to be set aside. In hindsight, it was absolutely the correct decision, as that particular bull cycle did end and prices have retraced heavily.

But enough background on my interest in the project; what is important is where the project stands now, and, prior to researching this report, I had little clue on the progress that had been made since the summer. There is indeed a lot to get through in the following report, and a number of interesting cross-comparisons to be made with prior reports, particularly those of Bulwark and ALQO. These two coins seem to have some overlap with Stakenet in their ambitions and their current developments, and I look forward to dissecting where Stakenet shines and where it does not…

I hope this fifth Coin Report will prove objective and insightful.

If you’d like to know more about the project, prior to reading the report, here are some of Stakenet’s primary links:


Fundamental

General:

Name: Stakenet

Ticker: XSN

Algorithm: X11

Sector: Decentralised Financial & Cloud Services

Exchanges: Cryptopia, Livecoin & Sistemkoin

Stakenet was launched in March 2018, completing a transition from the POSW chain. Since March 1st, the POSW chain has been abandoned, with Stakenet operating on its own blockchain. At that time, 73m POSW was swapped to XSN. There is no premine and there was no ICO. The coin also exclusively operates with a Proof-of-Stake consensus mechanism, and is currently in its final block reward stage; a stage that will continue indefinitely. This is important to note for the purposes of profitable speculation, as we’ll discover when we dig into supply emission and inflation.

XSN has very little price-history, having only been listed on exchanges from early April 2018. As such, it has only experienced a (brief) bull cycle that topped out in June, with price now trading within its first bear cycle, having made a local low early last month around 1800 satoshis. But more on that a little later…

There is a great deal of ambition apparent in the Stakenet roadmap and whitepaper, and the project states that its ultimate aim is to build “an integrated decentralized ecosystem to create a suite of effective investment tools for investors and the world’s first truly decentralized cryptocurrency bank.” They also persistently refer to Stakenet as “a trustless, profit-driven economy.” There is much to be evaluated here, but with goals as ambitious as these – with such a broad, global scope of use – the development has to be constant, consistent and distinguished. It’s a lot to ask for, but let’s see how Stakenet fares.


Metric Analysis:

Below are listed a number of significant metrics, all of which are accurate as of 20th November 2018. 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. Also, Transactional Volume and NVT have been omitted due to lack of functionality of the block explorer for such calculations. However, as Stakenet (as we’ll see) is aiming at XSN becoming a store-of-value rather than a currency, this is not such a big deal. The rich-list analysis has been conducted using https://xsnexplorer.io/. Lastly, I also used https://masternodes.online/currencies/XSN/ for some masternode-related data, though much was calculated by myself.

Metrics:

General:

Price: 2273 satoshis ($0.10)

Exchange Volume (24H): $172,764

Circulating Supply: 73,434,401 XSN

Total Supply: 82,563,978 XSN

Maximum Supply: 135,123,978 XSN (there is theoretically no maximum supply, but I have calculated it as the circulating supply in 5 years)

% of Max. Supply Minted: 61.10%

Network Value: 1669.16 BTC ($7.412mn)

Network Value at Max. Supply: $13.638mn

Category: Midcap

Exchange Volume-to-Network Value: 2.33%

Average Price (30-Day): $0.18

Average Exchange Volume (30-Day): $195,936

Average Network Value (30-Day): $13.208mn

Average Exchange Volume-to-Average Network Value: 1.48%

% Price Change USD (30-Day): -48%

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

USD All-Time High: $0.89

% From USD All-Time High: -87.5%

Premine % of Max. Supply: 0%

Premine Location: N/A

Liquidity (calculated as the sum of BTC in the buy-side within 10% of current price across all exchanges): 8.471 BTC

Liquidity-to-Network Value %: 0.51%

Supply Available on Exchanges: 1,615,485 XSN

% of Circ. Supply Available on Exchanges: 2.2%

Staking & Masternodes:

Network Staking Weight: 7,579,469 XSN on XSN Cloud (unable to determine entire Network Staking Weight)

Staking ROI (Annual): Minimum 9.23%* (if all circulating supply is staked minus that locked in masternodes)

Masternode Price: $1,514.01

Masternode Collateral Size: 15,000 XSN

Masternode Count: 1479

Masternode Count Growth (30-Day): -0.14%

Masternode ROI (Annual): 21.32%**

Masternode Reward / Block Reward: 45%

Supply Locked In Masternodes: 22,185,000 XSN

Masternode Network Value$2.239mn

MNV / Network Value: 30.21%

*To calculate minimum staking ROI annually: ((Annual Supply Emission * 45%) / (Circulating Supply – Masternode Locked Supply)) * 100 = (4,730,400 / 51,249,401) * 100 = 9.23%

**To calculate masternode ROI annually: ((Annual Supply Emission * 45%) / Masternode Count)) / Masternode Collateral = (4,730,400 / 1479) / 15000 = 21.32%

Supply Emission & Inflation:

Current Block Height: 364690

Block Reward Schedule: Currently in final reward stage of 20 XSN per block with 60-second block times. This will continue indefinitely.

Annual Supply Emission: 10,512,000 XSN (238.94 BTC at current prices)

Annual Inflation Rate: 14.31%

Circulating Supply in 365 Days: 83,946,401 XSN

Distribution:

Address Count: 6947

Supply Held By Top 10 Addresses: 34.31%

Supply Held By Top 20 Addresses: 40.95%

Supply Held By Top 100 Addresses: 56.80%

Inactive Address Count in Top 20 (30 Days of No Activity): 9

Analysis:

Now, I’m sure you were all enthralled by that mountain of metrics, but which of them are the most insightful for our purposes? Well, this is where Stakenet differs a little from Bulwark and ALQO (two projects that I have previously reported on and that I believe share a number of similarities with XSN). Where those two projects are focusing a lot of their effort on making their respective coins more effective as means-of-payment, Stakenet is seeking to position XSN as a store-of-value, with the coin fueling the Stakenet ecosystem. As such, metrics such as Transactional Volume and NVT, which would usually be insightful, are not so relevant, and so it is not such a problem that the Stakenet block explorer does not allow for such calculations to be easily made. Where, then, should we look for insight? In my opinion, there is much to be gleaned from the metrics concerning supply emission, distribution and masternodes, in particular. But, before we get to those, let’s run through some of the General metrics:

Firstly, Stakenet has unusually high Liquidity, calculated using buy-side depth within 10% of current prices as a percentage of Network Value. Where it’s potential competitors in ALQO and Bulwark had 0.12% and 0.29% Liquidity, respectively, Stakenet currently has 0.51%. This is almost twice that of ALQO and 4x that of Bulwark. This is indicative of high demand at current prices, relative to Stakenet’s competitors.

However, this evens out when we take a look at the Supply Available on Exchanges. Stakenet has ~1.6mn XSN available in the orderbooks on its two primary exchanges, Cryptopia and Livecoin. This constitutes 2.2% of the circulating supply. Bulwark, however, only had 1.18% of its circulating supply available on exchanges, suggesting that the desire to hold onto Bulwark is greater than the desire to hold onto XSN. Perhaps this is a symptom of the ~60% annual masternode ROI offered by Bulwark relative to the ~21% ROI offered by Stakenet, and the minimum annual staking ROI of 38.57% relative to Stakenet’s minimum of a little over 9%. (I didn’t run these calculations for ALQO, so a comparison cannot be made here.) However, these greater rewards come with a catch, as we will discuss when we delve into supply emission and inflation; where Stakenet shines over Bulwark.

Moving on, I’d like to highlight the metrics concerning volume and price. Stakenet’s Exchange Volume for the past 24 hours works out as 2.33% of its Network Value. This is the largest EVNV figure I’ve found whilst researching these reports, indicating significant interest in the coin despite the macro bear market. To cement this notion of interest, the Average Exchange Volume works out as 1.48% of the Average Network Value for the past month; the interest in Stakenet has been sustained at greater-than-usual levels given the current market conditions. For context, of my previous four reports, no coin has had an EVNV or Average EVNV of greater than 0.64%, which is less than half of Stakenet’s average.

Further, Stakenet is currently price around $0.10, with an average price of $0.18 for the past 30 days… it is trading at a ~40% discount to its average for the month. It is also trading 48% below its opening price for the month (in USD). This, of course, is partly a symptom of Bitcoin’s recent decrease in prices, but perhaps it is an opportunity for a relatively cheap entry. We’ll come back to this in the Technical section.

Lastly from the General metrics, it is important to highlight the lack of premine. Unlike Bulwark or ALQO, Stakenet was launched without a premine, and, though both of those projects had small premines, this could imply relative strength if Stakenet is able to deliver on its promises as effectively as those two, given that all three projects are looking at similar areas of development (which we’ll come to later).

So, let’s get stuck into the metrics concerning Supply Emission & Inflation:

The most significant aspect of Stakenet’s supply emission is that it is currently in its final and lowest stage of block rewards, thus inflation is the lowest it has ever been. With 20 XSN rewarded per block and 60-second block times, this equates to an annual supply emission of ~10.5mn XSN, or 238.94 BTC at current prices. Stakenet’s annual inflation rate is a little over 14%.

Now, let’s break this down a little further. Whilst even a surface-level calculation like this one illuminates just how low the inflation is for Stakenet – and thus, how little headwinds there are for price growth – it is important to get an understanding of whether current demand would cover this inflation: 238.94 BTC of supply coming into existence annually at current prices equates to 0.654 BTC of daily supply emission, or ~$2,900-worth. Stakenet’s Average Exchange Volume for the past month is ~$196,000; 67.5x greater than the supply emission.

This is a very promising sign of sustained demand and there is a strong possibility that current prices will be maintained going forward, as there is vastly more daily volume being traded than there is supply being minted. This is not even taking into account the fact that 10% of the block reward is automatically locked in a Treasury fund that can only be accessed via an accepted proposal through the Governance system. Decreasing prices against Bitcoin at current levels of volume would indicate either smart-money distribution or panic, as it could not possibly be caused by the sale of the daily supply emission. We’ll look more at price when we dissect the chart.

Further, when we take into consideration the current Liquidity figure of 8.471 BTC, daily supply emission is covered almost 13x by buy support within 10% of current prices. This is a good indication of a cheap entry.

Now, let’s take a look at Staking & Masternodes:

Whilst total Network Staking Weight was unable to be determined (as was the case with Bulwark and ALQO), the functionality of XSN Cloud allows us to see that over 10% of the circulating supply is being staked using that service alone; or ~15% of the circulating supply minus the supply locked in masternodes. Further, I calculated that minimum annual staking ROI would be around 9%, if all circulating supply minus that locked in masternodes was being staked. This is a modest but decent minimum return.

Moving onto masternodes, the first point-of-interest is in the 0.14% decrease in active masternodes over the past month. This is neither good nor bad, and simply indicates a stable network.

Secondly, I calculated the annual ROI for a masternode to be a little over 21%, which is significantly lower than that of Bulwark and ALQO, which return ~60% and ~53%, respectively. However, Bulwark’s annual inflation rate comes in at a little under 55%, and ALQO’s is around 5%. Going by these metrics alone, if one was simply seeking a profitable masternode, going with ALQO would seem the best choice, as its return covers its inflation by almost 10x, whereas Stakenet’s masternode ROI is 50% greater than its inflation rate, and Bulwark’s barely covers its inflation.

Lastly, we must look at Masternode Network Value. This is where Stakenet comes up a little short relative to the other two projects. Stakenet has an MNV of ~$2.2mn, which equates to just under a third of its Network Value. In comparison, ALQO had an MNV equal to 49.79% of its Network Value, and Bulwark had the strongest MNV, with 55.2% of its Network Value comprising of masternodes. This is a signficant metric as it gives us another perspective on demand and a much clearer picture on real value than the traditional Network Value (market cap) figure.

At long last, we come to Distribution. This is where the decentralisation of a project can be assessed, particularly if that is one of its goals, and, more importantly for the speculator, smart-money interest can be determined. Now, the Stakenet block explorer is pretty awful for functionality, so I did the best I could to accurately assess distribution. It seems decentralisation is where Stakenet is currently failing, relative to its competitors in Bulwark and ALQO. ALQO, in particular, is also looking at becoming the foremost decentralised financial and cloud services ecosystem, but is doing significantly better on the decentralisation front. Stakenet’s top 10 richest addresses control ~34% of the supply; the top 20 control almost 41% of the supply; and the top 100 control 56.8% of the supply. ALQO’s top 100 richest addresses control less than half the supply that Stakenet’s top 10 richest addresses control: 15.77%. Bulwark’s top 100 richest addresses control even less, at 15.3%. This is certainly no bad thing, on Stakenet’s part, for our purposes of profitable speculation, but it must be said that it is a current failure for the project given its core aims.

(update: apparently, those larger addresses are mostly exchange-owned and the richest address is the XSN Cloud – usually these are labelled as such, so I thought that they were individually-owned)

Breaking the distribution down a little further, 9 of the top 20 richest addresses have been inactive for the past 30 days, and thus almost half of the largest holders seem to be content with position sizes at current prices. This is despite (as we will see on the chart later) a recent sell-off, confirming that the decrease in price is a result of panic rather than smart-money distribution. Further, of the remaining addresses, the majority seem to be staking or running masternodes. The 20th-richest addresses recently bought their entire position of 384k XSN. There was, however, some position shaving that seemed to take place in early-to-mid October, which actually lines up with the low that formed on the chart around 1800 satoshis.

That concludes this section on Metric Analysis. Onto the Stakenet 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. In the previous reports, I had included Slack in this list, but as none of the coins reported on thus far seem to use the platform, I will no longer be including it.

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

Twitter Followers: 10811

Tweets: 1225

Average Twitter Engagement: 2.09%

Facebook Likes: 1575

Facebook Posts (90-Day): 40

Average Facebook Engagement: 2.48%

Using RivalIQ‘s benchmark report as a point-of-reference, as usual, Stakenet excels in its social presence. Stakenet’s Average Twitter Engagement rate is 45x greater than the average across all industries, and ~160x greater than the average for the Media industry (the closest industry in the report). It is also a little over 5x greater than the Average Twitter Engagement rate of Bulwark, and ~60% greater than that of ALQO. Further, where those two coins had fairly weak audiences on Facebook, Stakenet comes in strong with over 3x more Likes than Bulwark and almost 8x more than ALQO. This shows a cross-platform commitment to generating a social media presence. Regarding Facebook engagement, Stakenet has an average engagement rate that is 15.5x greater than the average across industries, and 31x greater than the engagement found in the Media industry. It also beats Bulwark’s rate of 2.16%, despite Bulwark having a far smaller audience. ALQO’s rate was 3.43% but the sample size was only 1 post in the past 90 days. Overall, very promising.

Now, let’s take a look at the Discord group. The Stakenet Discord has 5862 members, which is a few hundred more than the Bulwark Discord and a few hundred less than ALQO. There are clearly segmented channels spanning relevant topics. The FAQ channel is extensive, providing informative answers to a plethora of common questions that a new user might be thinking about. This is great for accessibility. The Announcements channel seems to have been regularly updated (every other day, or so) up until about two weeks ago, with no update since. The Github channel shows near-daily activity, which is promising. Regarding resources, these are all compiled in their own channel, ensuring ease-of-access. Further, there are multiple channels for support depending upon the support required, allowing for efficiency of management for the team and more useful responses for the community. As would be expected, much of the discussion occurs in General, and the channel was actually utilised to great effect recently by imploring the community to vote on the poll for this Coin Report. As such, Stakenet won the vote with 33% of the total votes. Positive. There seems to be plenty of back-and-forth between the community, with suggestions being put forward and the team seeming to take these on board. This has dried up a little over the past 48 hours, but this is perhaps in part a symptom of the recent Bitcoin volatility. Overall, there is a strong sense of community involvement and a genuine interest in Stakenet’s future. One thing that could perhaps do with improvement is the % engagement of the group as a whole: there seems to be a lot of discussion between 100 or so members. Regardless, the Discord definitely scores a 5.

Moving onto the Stakenet Telegram, there are 2514 members in the group. A comprehensive list of relevant resources is pinned, ensuring new user accessibility and thus allowing for greater community growth. Looking through the past couple of weeks of messages, I can see that the vast majority of discussion is support-related, with queries being swiftly answered. There is also a clear trend in growth of the group size. However, there is rather little conversation concerning the development of the project and no palpable sentiment of genuine interest towards the future of the project, unlike that found in the Discord group. There also seems to be only ~25 individuals in discussion recently. 4 out of 5.

BitcoinTalk:

The Stakenet BitcoinTalk thread was created on March 28th, 2018, and has since generated 33 pages of discussion, totalling 658 messages. In the past 90 days, there have been 206 posts from around 50 individual posters: the most posts in 90 days of any coin I’ve reported on so far. The community seems eager to answer questions from new users and the thread is used to push out long-form, detailed development updates via the Medium blog. As tends to be the way with BitcoinTalk, there is quite a lot of focus on price, but there is plenty of discussion on support and some conversation concerning the future of the project. In particular, there is talk about the upcoming Decentralised Exchange, which will be the run fully on masternodes. Overall, I get a strong impression, and it is certainly the strongest thread of the five coins I’ve written reports for. 5 out of 5.

And that concludes my evaluation of the Stakenet 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:

Once again, relative to competitors, Stakenet seems to be in a strong position with regards to its leadership. There are 18 listed core team members on the website; Bulwark and ALQO both have fewer than 10. There are 40+ individuals reported as part of the Stakenet team. More impressively, there are 535 Github contributors, which shows true decentralisation of development (making up, at least in part, for the lack of strong decentralisation of the coin itself). They are currently hiring an International Communications Manager and an Article Writer.

Overall, I like the balance amongst the listed team, with 10 members that have relevant experience in development, 7 that have relevant experience in marketing and support and a  listed advisor in Frank Amato, who is assisting with development of the DEx and has vast experience in traditional finance. This is a good balance between generating brand awareness and creating a strong end-product: there’s no point in having a stand-out product if no one knows about it, and even less point in having a strong brand identity with no working product. Overall, very impressive. I also like that they’re continuing to expand. 5 out of 5.

Website:

www.stakenet.io

The website itself is sleek and easy-to-use. It is well-design with a very strong brand identity. I would like to see the Medium blog linked in the main menu, perhaps alongside the Wiki (extensive FAQ) as it is such an insightful resource for those interested in the product. On the topic of the blog, it is thorough and fairly regularly updated with a variety of topics covered. All the relevant social and resource links are included, and there are informative pages on the team and the coin itself. However, the block explorer is dreadful and in dire need of an update. It needs to be far more functional and feature-rich. XSN Cloud (which we will get into in the following sections) works smoothly, though it is in Beta at present. Overall, 4. Sort that explorer out.

Roadmap:

https://stakenet.io/roadmap/

Currently, only the 2018 roadmap is available, though I can see an inaccessible page for the 2019 roadmap.

The 2018 roadmap begins with a brief description of the composition of the roadmap itself, which is useful as it allows new users to better understand the core components of the project’s development. The layout of the roadmap is visually appealling, comprising of brief descriptions of individual goals, with dates of completion and a visual progress bar. There are also Show More tabs for further info. The roadmap clearly states that the various projects in development will see reveneues returned into XSN. As the first 3 quarters of the year (beginning with the launch in March) are pretty much complete, there has been much progress:

In Q1 (March-May), XSN successfully underwent a coin swap from POSW, and Trustless Proof-of-Stake (an original innovation by Stakenet) was integrated. Masternodes were also implemented and the end of the quarter saw the release of the new website.

Q2 (June-August) saw team expansion and the appointment of Frank Amato as advisor. The website was updated and XSN Cloud was launched with Staking-as-a-Service. Segwit and Lightning Network updates were completed.

Q3 (September-November) is the deadline for the Excalibur multi-currency hardware wallet. Further info can be found at https://medium.com/stakenet/xsn-core-update-september-xsn-light-excalibur-epos-9046a93cf222. The progress bar indicates this is near-completion. Q3 has also seen the completion of Lightning Swap compatibility, allowing Lightning Network Cross-Chain Atomic Swaps (more on this). In essence, this allows for instant swaps between XSN and other Lightning Network coins. Apparently, Stakenet is the first coin in the space to achieve this outside of BTC and LTC. Very impressive stuff. Masternodes-as-a-Service are also scheduled for Q3 completion, and are 95% complete. Further, testing for the hardware wallet prototype is complete, Stratis and PIVX have been added to the XSN Cloud for staking functionality, and the Revolving Stake Bonus (RSB) business model has been implemented, with a trackable page depicting buy-backs-and-burns of the XSN supply and funds donated to the Treasury.

Next quarter (December-February) will see zk-SNARK and TOR integration, Cross-Chain-Proof-of-Stake functionality, cold staking via Ledger Nano S, conceptual work completed for the DEx, autonomous swaps via masternodes, testnet sharding, new whitepaper and roadmap releases and prototype launch of the hardware wallet. Wow. That’s a lot to get done in 3 months. I’ll be beyond impressed if it’s all completed to a high standard. The ambition is certainly great.

The roadmap gets a 5 out of 5 but I’d have liked to have seen more of 2019’s roadmap given we’re only a month away from the New Year.

Whitepaper:

https://stakenet.io/Whitepaper_Stakenet_V3.0_EN.pdf

My first impression of the whitepaper is that is is far too long. 56 pages is incredibly excessive, regardless of the content, and this is the weakest part of the project thus far, as I will explain. The Bitcoin whitepaper is 9 pages long… too long a whitepaper makes the most important document less accessible or attractive for new users.

However, there is a clear and ambitious overall goal for Stakenet stated in the opening paragraphs:

Stakenet (XSN) is building an integrated decentralized ecosystem to create a suite of effective investment tools for investors and the world’s first truly decentralized cryptocurrency bank.

The whitepaper also opens by listing many of their innovations or their improvements on existing technologies (TPoS, CCPoS, DEx, masternodes with multiple income sources, RSB, cold staking etc). This is all clearly described in jargon-free prose, painting a solid overall picture as to the project’s core components. The block reward schedule is informative and transparent, with the 10% Treasury reward not obscured. There is also a focus on XSN becoming a “store-of-value” and Stakenet being a “trustless profit-driven economy”. There are visual aids to increase ease-of-understanding and much of the description remains in plain English. That being said, the prose should be far more concise, with much overlap in the pages concerning goals/aims/objectives/missions/vision etc.

Next, there is a condensed version of the roadmap printed in a visually appealing graphic, which is useful. This usefulness dwindles when the following pages are filled with a detailed breakdown of each component of the roadmap, in exactly the same language as that of the roadmap on the website. It feels redundant. There is also a lot of repetition throughout the document, especially with regards to the components of the Stakenet ecosystem. This is what is making the whitepaper unnecessarily long.

That being said, there are informative yet brief sections on the history of XSN and its beginnings as POSW. The subsequent graphic featuring Bitcoin first-of-class forks is particularly smart, as it distinguishes Stakenet as one of few Bitcoin forks truly innovating. This is followed by clear breakdowns of more general technical terminology concerning cryptocurrencies (algorithms, consensus, masternodes etc).

The Treasury section elaborates on the 10% block reward, stating that these funds will be exclusively used for development, bounties and marketing, Further, the funds will only be accessible once a proposal has been accepted via the governance system, ensuring decentralisation of power.

Next, the block reward schedule is repeated – again, redundant. Later sections delve into more technical aspects of Segwit and Lightning Network. The following section on Trustless Proof-of-Stake is useful as it serves to distinguish XSN, showing its unique use-case; the utility of cold storage staking and Staking-as-a-Service is massive. There is then pages and page of material covering the history of Proof-of-Stake, which, whilst seemingly overkill and certainly dull, does help illuminate where Stakenet has improved on these older solutions.

We then find out that masternodes will be getting rewards via three income streams: block rewards; 100% of DEx fees; and 100% of TOR fees. This is followed by some very informative sections explaining various privacy technologies. But, alas, we find pages and pages of material on consensus mechanisms, making the whitepaper begin to feel almost like a cryptocurrency encyclopaedia rather than a document explaining the purpose and development of Stakenet. Once again, there is repeated material on TPoS, and, most mindnumbingly, there are sentences that have been copied and pasted within the same section in the XSN Businesses section. Proofreading is required. I also think a condensed “light paper” would be far more useful, as, by the final few pages of the whitepaper, I could not wait to stop reading. It is just a little bit confused; there are some informative, concise and exciting sections mingled with dull and excessively long sections of little utility. Overall, 3 out of 5.

Wallets:

Concerning wallets, there are local wallets for Windows, Mac and Linux and the web wallet on XSN Cloud. There is a multi-currency hardware wallet in development, as well as a multi-currency light wallet for desktop and mobile.

The Windows wallet is well-branded, like everything else, and works well with smooth UI/UX. It is a little bit bare-bones in functionality, a bit like the explorer. It is also a little high in CPU usage. Overall, solid 4 with room for improvement.

General:

Generally, Stakenet has a lot going for it. Significant achievements of the past year include the initial transition to XSN from POSW; the integration of masternodes; Trustless Proof-of-Stake; Segwit; and Lightning Swaps. In particular, those latter 3 are stand-out achievements. There is also so much to look forward to, it seems: a Decentralised Exchange; DApps on the Stakenet blockchain; a multi-currency hardware wallet; zk-SNARK integration; cold staking functionality for Ledger Nano S; a multi-currency Light wallet; and, a new innovation in Exertive-Proof-of-Stake. You can find out more on that here.

The primary innovation, and what I think gives Stakenet an edge over its competitors, is Trustless Proof-of-Stake, Cross-Chain-Proof-of-Stake and Lightning Swaps. These are truly revolutionary technologies in the space.

Regarding funding, I like that they have a 10% Treasury that is governed using the masternode network. I am more excited for the RSB mechanism to start buy-backs-and-burns and to begin assisting with Treasury funding as the Stakenet ecosystem evolves to include more services.

That concludes my fundamental analysis of Stakenet. Let’s have a look at that chart:


Technical

Whilst there is rather little price-history for XSN, the chart is somewhat of a beauty in its clean market structure. We can quite clearly see the phases of the bull cycle play out, with a peak forming in June and price subsequently bleeding out over the past few months. That bleed occured on unusually low volume. Since then, price seems to have found a bottom at ~1800 satoshis, and the volume profile is in an uptend over the past few weeks, indicating that accumulation is once again underway. Price is currently sitting at a level of prior resistance potentially turned support, and is only ~20% above all-time lows. Given the rest of this report – in particular, the Metric Analysis – it would seem as though price is in a strong position for a low-risk, high-reward entry, and the signs of reversal are there. It will be interesting to see whether Stakenet can buck the macro market downtrend in the short term, but, over the coming 12-24 months, I can see a lot of upside for the coin. Exciting.


Conclusion

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

My final grading for Stakenet is a strong 4 out of 5. It would be so easy for me to award it a 5, but there are lots of areas where improvement is necessary for a perfect score, despite the overwhelming strength in social media presence and innovation, in particular.

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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