Coin Crunch Scoring Metrics

(50 Point System)

Our scoring system is in no way or shape financial advice. This post is merely the Coin Crunch team’s opinion about the technology and created for our own reference. Please don’t take this information as the basis for any investment decisions. Do your own research and know that new blockchain projects are extremely risky. 


Coin Crunch uses a 50 point scoring scale to evaluate blockchain projects. We emphasize tech and token economics as the primary areas of analysis. We strive to be as objective as possible in our evaluation and are open to any fact-based criticism.

Tech

Score is based off a sliding scale of the following factors:

  • Centrality – Understanding the level of decentralization is essential to understanding future volatility and assessing risk. Factors to consider: Consensus, Miners/voters Incentivized, # of entities in control of >50% of voting/mining power, % of money supply held by top 100 accounts, # of client codebases that account for > 90% of nodes, # of public nodes. For more information check here.
  • Current Level of Development – In 2017 we saw a proliferation of projects that can be described as vaporware (projects with no actual code/developed MVP). Projects that have no developed code/tech are generally avoided as are projects with rebranded code from a previous project.
  • Github Commits – Github commits and contributors are an easy heuristic to asses the current state of development. Although it should be noted that some projects don’t want to divulge all their code to the public.
  • Number of Contributors – Generally speaking, the more contributors to a code base the more resilient the code is.
  • Protocol/Dapp – Protocols that form the base layer where other Dapps or 3rd party services can be built on will generally accrue value. This trickle down affect is more pronounced if the protocol is open sourced.
  • Code Audit (Suchi / QSP) – Code audits are an integral part of assessing if a project’s code is secure to handle transactions and scale.

Community

Score is based off a sliding scale of the following factors:

  • Governance Model. What is the governance model? How are voting decisions made with respect to the protocol, code and decisions made? Is the blockchain permissioned or permissionless? Projects like Rchain and Monero are good examples of community-driven governance.
  • Open Source. Is the blockchain permissioned or permissionless? Is the code open source? Do they have open source licenses in place? Are the actively promoting the ethos of open source?
  • Developer Incentives. It’s important that developers are strongly incentivized to grow the project and build on top of it. This includes developers on the team, as well as new developers attracted to the project.
  • Number of Reddit/Telegram/Twitter Followers. A raw check of the social media reach of the project. Note, this can be easily gamed, so is given lower weight.
  • Level of Engagement. More important than raw follower count is engagement. This can also be gamed, so we look closely at the engagement to ascertain whether it’s genuine or fake.
  • Foundation/Business Location and Structure. What is the business structure? Is it in a legal jurisdiction that has favorable crypto laws? How decentralized is the business structure?
  • Community Funded Projects. What incentives are there to grow and build a community. When hype cycles die, the strongest foundation of any project will be its community. Is a percentage of funding dedicated to the growth of the community?

Token Economics

Score is based off a sliding scale of the following factors:

  • Function of Token. How does the token work, and is its function a necessity in the function of the network. The vast majority of projects create tokens that have variables which could be used and implemented by existing smart contracts. The token function should be integral and inseparable from the business use case of the project.
  • Intrinsic Value. Does the token have value in and of itself, or only as a currency (of any kind) within the network? What is the incentive, if any, for people to actually use the token?
  • Velocity Sinks. What velocity sinks, if any, are in place? Are they added “ad hoc”, or they integral to the token function. “The important thing is that for the token to have a stable value, it is highly beneficial for the token supply to have sinks – places where tokens actually disappear and so the total token quantity decreases over time. This way, there is a more transparent and explicit fee paid by users, instead of the highly variable and difficult to calculate “de-facto fee”, and there is also a more transparent and explicit way to figure out what the value of protocol tokens should be.” (source) What is the incentive, if any, for people to hodl the token?
  • Token Distribution. What is the token distribution schedule? Is it pre-mined or minable? Centrally issued or decentralize? Is it deflationary or inflationary, and why does that matter? See: LivePeer (inflationary) vs. Bitcoin (deflationary)
  • Team Vesting Period. Are team and advisor tokens locked up? For how long? Is it based on time or based on hitting key milestones (re: token value). Example of great vesting: Celsius.Network
  • Token Lockup. Are tokens locked? What about bonuses? This is important because investors want access to liquidity as fast as possible, but

Business Development

Score is based off a sliding scale of the following factors:

  • Existing Revenue – Although rare, if a project has existing revenue from “real-world” assets or income streams that is an important deciding factor for our analysis. In case of the lack of real world income, we can project income streams based on users or average market adoption rates.
  • Current Revenue Model – How a business makes money is an important metrics when deciding if the model is viable and scalable going forward.  Projects need to have thought of their business model and not just rely on appreciation of their tokens.
  • Proven Business Model – If the existing business model already exists or is based off an already functional model that will benefit the project greatly.
  • Educated Customer Base – The barrier to adoption with many technologies is first educating a customer or user base. If this barrier is too high, the technology will not be able to grow its user base to achieve network effects or early adoption.
  • Roadmap – Roadmaps that demonstrate a thoughtful examination of where the project will go in the next two-three years is important. Roadmaps that are either too ambitious or too sparse can weigh negatively on our evaluation.
  • Open Source Initiative or Proprietary System – The blockchain movement favors open source initiatives, however, some businesses require closed systems in order to create a viable business.
  • First Mover Advantage – While there are advantages and disadvantages to this, first movers will capture the “brand” of the project aiming to solve a certain problem early.

Team

Score is based off a sliding scale of the following factors:

  • Previous Experience. Critical and in depth look at the team’s experience. Devs should have both relevant industry and blockchain experience. Advisors should have industry experience, investing experience, and blockchain experience with a demonstrated track record. The same goes for every other person on the team: operations, finance, and marketing.
  • Size of Team. Larger teams tend to be a sign of a longer-term, more-committed project. This is not always the case. Small teams (see: Bitcoin and many others) have done extremely well. If the team is large, is it because the project requires a big team, or does it look like they are adding lots of people in an attempt to build hype (over substance)?
  • Developers. Projects like Wanchain and Rchain have large dev teams (25+) to tackle the broad range of coding problems involved in the projects. Is the project developer heavy, or full of finance and marketing people. “There are maybe 800 people in the world who can build this stuff.” @naval. We look for talent and dedication, not hype.
  • Existing Partnerships. What partnerships are in place? Are they industry partnerships (eg, customers) or solely blockchain-based partners? We know that partnerships are essential to bridging blockchain with the real world. The announcement or confirmation of partnerships can drive value of a token up or down. Are the partners real or hyped (as with IOTA and Microsoft).
  • Project Advisors. What are the quality of the advisors? Do they have relevant industry experience? Do they have blockchain experience? We look for high impact advisors that can open the project to new market segments. Further, we do not necessarily value “high profile” advisors who whore themselves out to 10s or 100s of projects, regardless of how influential they.
  • Country of Incorporation. We keep an open mind to projects from around the world. That said, the competition and quality standard is much higher in certain regions than others. For example, a large number of low quality projects have been pitched to us from India, Russia and Eastern Europe. This is a quick glance to see where the team is from and get a sense of whether it’s a solid project or something that looks like a get-rich-quick scheme.

Marketing Score

Score is based off a sliding scale of the following factors. We in no way support paid reviews or use of them, however, they are still being used heavily to sway market sentiment.

  • Email Marketing – Email marketing is not only an effective way to build a customer and user base, it’s also the first line of communication between the business and its users/investors. Without proper email communication the ability of a project to connect effectively is damaged.
  • Paid Advertising – During initial launch paid advertising extends the reach of the brand and helps more people understand the ethos and goals of the project.
  • Influencer Advertising – This may include founder interviews, conferences or any other medium in which a project can access a captive audience of viewers.
  • Number of Youtube Reviews – The majority of early investors still look for reviews or interviews to better understand the scope of the project and connect with the team/tech/ideas.
  • Sales Copy on Landing Page – The copy (or written text) on the main page is important to help people understand what the project is about and convey the message in a clear and concise format.
  • Dedicated Marketing Staff – Full-time marketing staff not only help promote the brand but they act as the primary facilitators of communication between the project’s core members and supports/users.
  • Previous Marketing Experience – Having at least one member with a strong marketing background in the blockchain space or related areas is an important consideration when dealing with some of the common issues associated with early stage blockchain projects.
  • Major VC Contributions and Involvement – Large VC funds often offer value-add services that help augment a project’s reach and influence.

Coin Crunch Scoring Metrics

(50 Point System)

Our scoring system is in no way or shape financial advice. This post is merely the Coin Crunch team’s opinion about the technology and created for our own reference. Please don’t take this information as the basis for any investment decisions. Do your own research and know that new blockchain projects are extremely risky. 


NameHard CapMainnetVerdict
Fantom40,000,000Q3 2019
Ankr.network16,000,000Q3 2019
MetronomeAuctionQ3 2019
Inve.one45k ETH Q3 2019
Vault 1240M2019
Moonlight25MNot Scheduled
Sentinel Protocol48,000 $ETHJuly 2018
Emotiq 39MQ4 2018
Quarkchain20MQ4 2018
EdenChain24MQ1 2019

Coin Crunch uses a 50 point scoring scale to evaluate blockchain projects. We emphasize tech and token economics as the primary areas of analysis. We strive to be as objective as possible in our evaluation and are open to any fact-based criticism.

Tech

Score is based off a sliding scale of the following factors:

  • Centrality – Understanding the level of decentralization is essential to understanding future volatility and assessing risk. Factors to consider: Consensus, Miners/voters Incentivized, # of entities in control of >50% of voting/mining power, % of money supply held by top 100 accounts, # of client codebases that account for > 90% of nodes, # of public nodes. For more information check here.
  • Current Level of Development – In 2017 we saw a proliferation of projects that can be described as vaporware (projects with no actual code/developed MVP). Projects that have no developed code/tech are generally avoided as are projects with rebranded code from a previous project.
  • Github Commits – Github commits and contributors are an easy heuristic to asses the current state of development. Although it should be noted that some projects don’t want to divulge all their code to the public.
  • Number of Contributors – Generally speaking, the more contributors to a code base the more resilient the code is.
  • Protocol/Dapp – Protocols that form the base layer where other Dapps or 3rd party services can be built on will generally accrue value. This trickle down affect is more pronounced if the protocol is open sourced.
  • Code Audit (Suchi / QSP) – Code audits are an integral part of assessing if a project’s code is secure to handle transactions and scale.

Community

Score is based off a sliding scale of the following factors:

  • Governance Model. What is the governance model? How are voting decisions made with respect to the protocol, code and decisions made? Is the blockchain permissioned or permissionless? Projects like Rchain and Monero are good examples of community-driven governance.
  • Open Source. Is the blockchain permissioned or permissionless? Is the code open source? Do they have open source licenses in place? Are the actively promoting the ethos of open source?
  • Developer Incentives. It’s important that developers are strongly incentivized to grow the project and build on top of it. This includes developers on the team, as well as new developers attracted to the project.
  • Number of Reddit/Telegram/Twitter Followers. A raw check of the social media reach of the project. Note, this can be easily gamed, so is given lower weight.
  • Level of Engagement. More important than raw follower count is engagement. This can also be gamed, so we look closely at the engagement to ascertain whether it’s genuine or fake.
  • Foundation/Business Location and Structure. What is the business structure? Is it in a legal jurisdiction that has favorable crypto laws? How decentralized is the business structure?
  • Community Funded Projects. What incentives are there to grow and build a community. When hype cycles die, the strongest foundation of any project will be its community. Is a percentage of funding dedicated to the growth of the community?

Token Economics

Score is based off a sliding scale of the following factors:

  • Function of Token. How does the token work, and is its function a necessity in the function of the network. The vast majority of projects create tokens that have variables which could be used and implemented by existing smart contracts. The token function should be integral and inseparable from the business use case of the project.
  • Intrinsic Value. Does the token have value in and of itself, or only as a currency (of any kind) within the network? What is the incentive, if any, for people to actually use the token?
  • Velocity Sinks. What velocity sinks, if any, are in place? Are they added “ad hoc”, or they integral to the token function. “The important thing is that for the token to have a stable value, it is highly beneficial for the token supply to have sinks – places where tokens actually disappear and so the total token quantity decreases over time. This way, there is a more transparent and explicit fee paid by users, instead of the highly variable and difficult to calculate “de-facto fee”, and there is also a more transparent and explicit way to figure out what the value of protocol tokens should be.” (source) What is the incentive, if any, for people to hodl the token?
  • Token Distribution. What is the token distribution schedule? Is it pre-mined or minable? Centrally issued or decentralize? Is it deflationary or inflationary, and why does that matter? See: LivePeer (inflationary) vs. Bitcoin (deflationary)
  • Team Vesting Period. Are team and advisor tokens locked up? For how long? Is it based on time or based on hitting key milestones (re: token value). Example of great vesting: Celsius.Network
  • Token Lockup. Are tokens locked? What about bonuses? This is important because investors want access to liquidity as fast as possible, but

Business Development

Score is based off a sliding scale of the following factors:

  • Existing Revenue – Although rare, if a project has existing revenue from “real-world” assets or income streams that is an important deciding factor for our analysis. In case of the lack of real world income, we can project income streams based on users or average market adoption rates.
  • Current Revenue Model – How a business makes money is an important metrics when deciding if the model is viable and scalable going forward.  Projects need to have thought of their business model and not just rely on appreciation of their tokens.
  • Proven Business Model – If the existing business model already exists or is based off an already functional model that will benefit the project greatly.
  • Educated Customer Base – The barrier to adoption with many technologies is first educating a customer or user base. If this barrier is too high, the technology will not be able to grow its user base to achieve network effects or early adoption.
  • Roadmap – Roadmaps that demonstrate a thoughtful examination of where the project will go in the next two-three years is important. Roadmaps that are either too ambitious or too sparse can weigh negatively on our evaluation.
  • Open Source Initiative or Proprietary System – The blockchain movement favors open source initiatives, however, some businesses require closed systems in order to create a viable business.
  • First Mover Advantage – While there are advantages and disadvantages to this, first movers will capture the “brand” of the project aiming to solve a certain problem early.

Team

Score is based off a sliding scale of the following factors:

  • Previous Experience. Critical and in depth look at the team’s experience. Devs should have both relevant industry and blockchain experience. Advisors should have industry experience, investing experience, and blockchain experience with a demonstrated track record. The same goes for every other person on the team: operations, finance, and marketing.
  • Size of Team. Larger teams tend to be a sign of a longer-term, more-committed project. This is not always the case. Small teams (see: Bitcoin and many others) have done extremely well. If the team is large, is it because the project requires a big team, or does it look like they are adding lots of people in an attempt to build hype (over substance)?
  • Developers. Projects like Wanchain and Rchain have large dev teams (25+) to tackle the broad range of coding problems involved in the projects. Is the project developer heavy, or full of finance and marketing people. “There are maybe 800 people in the world who can build this stuff.” @naval. We look for talent and dedication, not hype.
  • Existing Partnerships. What partnerships are in place? Are they industry partnerships (eg, customers) or solely blockchain-based partners? We know that partnerships are essential to bridging blockchain with the real world. The announcement or confirmation of partnerships can drive value of a token up or down. Are the partners real or hyped (as with IOTA and Microsoft).
  • Project Advisors. What are the quality of the advisors? Do they have relevant industry experience? Do they have blockchain experience? We look for high impact advisors that can open the project to new market segments. Further, we do not necessarily value “high profile” advisors who whore themselves out to 10s or 100s of projects, regardless of how influential they.
  • Country of Incorporation. We keep an open mind to projects from around the world. That said, the competition and quality standard is much higher in certain regions than others. For example, a large number of low quality projects have been pitched to us from India, Russia and Eastern Europe. This is a quick glance to see where the team is from and get a sense of whether it’s a solid project or something that looks like a get-rich-quick scheme.

Marketing Score

Score is based off a sliding scale of the following factors. We in no way support paid reviews or use of them, however, they are still being used heavily to sway market sentiment.

  • Email Marketing – Email marketing is not only an effective way to build a customer and user base, it’s also the first line of communication between the business and its users/investors. Without proper email communication the ability of a project to connect effectively is damaged.
  • Paid Advertising – During initial launch paid advertising extends the reach of the brand and helps more people understand the ethos and goals of the project.
  • Influencer Advertising – This may include founder interviews, conferences or any other medium in which a project can access a captive audience of viewers.
  • Number of Youtube Reviews – The majority of early investors still look for reviews or interviews to better understand the scope of the project and connect with the team/tech/ideas.
  • Sales Copy on Landing Page – The copy (or written text) on the main page is important to help people understand what the project is about and convey the message in a clear and concise format.
  • Dedicated Marketing Staff – Full-time marketing staff not only help promote the brand but they act as the primary facilitators of communication between the project’s core members and supports/users.
  • Previous Marketing Experience – Having at least one member with a strong marketing background in the blockchain space or related areas is an important consideration when dealing with some of the common issues associated with early stage blockchain projects.
  • Major VC Contributions and Involvement – Large VC funds often offer value-add services that help augment a project’s reach and influence.