Normally a summary will go here. But seeing as how this report is more of an exercise in me getting caught up re: your specific interests in crypto. I am using it for this note today. On the first page here you will find some of my thoughts re: how we can structure a deal / process / workflow going forward if you like what you receive today and want to continue going forward. On the following pages you will find a table of contents and several pages that are a distillation of what I found in my research this week. It is mostly general baseline infomration. Each of the blockchains / ecosystems could themselves merit a report of this size each -- which I am happy to puruse with you going forward. I hope you find it useful. Lastly, I've included a conclusion at the very end which outlines some of my thoughts about what I learned in researching this but also a short bit about another route you could pursue to achieve some of your aims.
I think it would make sense for us to talk about what posture you would like me to adopt in my investigation of the crypto markets on your behalf. For some clients, they want me to simply compile just the facts and present them. For others, they ask me to adopt a critical stance and try to focus on the potential flaws, risks, downsides, etc. And a third type of client prefers for me to take a more optimistic view of the projects they point me towards. I am happy to adopt any of these postures for you, or even switch between them on a week by week basis as you see fit. I summarize these three postures in the following list:
- Just the Facts
- Critical Eye
- Optimistic Eye
If, after reading this initial compilation you would like to proceed. I think an initial deal structure might look something like:
- I work for you one day per week
- You point me in whatever direction you want
- I send you a report with my findings / analysis
- We hop on a phone call to discuss the findings and set the agenda for the following week
I work for my father at Greenwich Wealth Management three days per week. Typically Monday thru Wednesday, although that is somewhat flexible when need be. I already focus on researching Bitcoin and Crypto during those three days, so if you decide you'd like to take me on as a research analyst, most of my work for Greenwich Wealth Management would be synergistic with your interests as it relates to crypto.
Founded by Gregory Landua, REGEN is an altcoin / token project aimed at standing up "a community dedicated to maintaining a decentralized open ledger of ecological health information to serve as the basis for conditional agreements between parties." Which they describe as "an essential building block for a new phase of the global economy that accounts for ecological health and invests in ecological regeneration as the cornerstone of healthy business and governance."
To accomplish its aims, it instantiates a decentralized network (The REGEN Network) using the COSMOS SDK (Software Development Kit) and has issued its own token REGEN. This token is being considered a utility token, which may help to provide cover against future SEC enforcement actions.
REGEN ran an ICO (Initial Coin Offering) from June 23rd thru June 28th. It utilized the Osmosis Dex (Decentralized Exchange) using a Liquidity Bootstrapping Pool (LBP) structure. The plan was for the tokens to go out at "between $4-$6." The structure of the LBP allows for price discovery over a period of time as the tokens become available. This process was successful by all accounts. In the period over which time the LBP was active (June 23 - June 28) I was not able to locate pricing data, but I am sure Gregory has those records readily at hand.The first known pricing comes from June 28th when REGEN began freely floating at $2.54 per token.
On Sunday, June 27, 2021 Bitcoin (BTC) was trading at approximately $33,000. Bitcoin was at that time selling off extremely hard after the April 2021 highs of around $65,000 and would put in a secular low of just under $30,000 in mid July 2021. I have included a chart of BTC price action since the debut of REGEN here:
REGEN 24-hour trade volume of late is around $100,000 notional. It trades primarily on the Osmosis Decentralized Exchange across three trading pairs:
- REGEN / ATOM (44% of total volume)
- REGEN / OSMO (43%)
- REGEN / EUR (13%)
Staking is a process whereby a holder of a given cryptocurrency deposits their token into a wallet in exchange for a (usually variable) yield. As of Thursday, April 28, 2022, REGEN can be staked in exchange for a 27.3% annualized yield. While this yield is certainly attractive, it cannot be evaluated in a vacuum. The depreciation (or appreciation) of the underlying asset needs to be taken into account when evaluating performance of any yield-generation strategy. Finding historical yield for REGEN has proved difficult but I am sure Gregory can provide that information if need be. As such it is hard for me to determine whether or not the hypothetical yield returns generated by staking REGEN outperformed the significant depreciation REGEN has seen over the past 10 months.
Areas For Further Research
Osmosis (Decentralized Exchange)
Osmosis is a decentralized exchange that began operations in 2021. It "is an automated market maker protocol that enables [users] to create liquidity and trade IBC enabled tokens." IBC stands for Inter-Blockchain Communication protocol which in their own words is:
Inter-Blockchain Communication (IBC) Protocol
IBC is an interoperability protocol for communicating arbitrary data between arbitrary state machines.
The protocol consists of two distinct layers: the transport layer (TAO) which provides the necessary infrastructure to establish secure connections and authenticate data packets between chains, and the application layer, which defines exactly how these data packets should be packaged and interpreted by the sending and receiving chains.
The IBC application layer can be used to build a wide range of cross-chain applications, including but not limited to token transfers, interchain accounts (delegate calls between two chains), non-fungible token transfers and oracle data feeds.
In essence, IBC allows discrete blockchains to talk to one another. This IBC protocol is the backbone of the entire Cosmos ecosystem. The IBC implementation is built in the Go(lang) programming language and is offered as a pre-packaged module via the Cosmos SDK -- making it easier for developers to get up and running.
The Keplr wallet is the most prominent IBC crypto-wallet. It is offered as a chrome extension and iOS mobile app. It can be used to custody, stake & earn, send & receive, and to initiate IBC transfers. This wallet is most akin to the metamask wallet that is commonly used in the Ethereum / ERC20 ecosystem. Keplr was developed by Chainapsis Inc. which is based in the Gangnam district of Seoul. Kepler also has Hardware Wallet support via the Ledger Nano X.
Cosmos is the blockchain that underpins all of this. It calls itself "the internet of blockchains" in a nod to its stated goal to link all blockchains with one another using the IBC protocol. It uses a native token called ATOM and was formally founded in 2019. This is a proof-of-stake blockchain. It is unclear whether they will succeed in their vision at this point. "Connecting all the chains" is one of the more popular angles of late, so they are not without competition. Overall, it will take many years for a winner, if any at all, to emerge.
When you are underwriting any sort of project, it is important to understand which protocol / ecosystem that project sits atop. In the case of REGEN, the answer appears to be Cosmos. While it is possible to for projects to migrate ecosystems, its not easy -- food for thought.
Next we take a look at ATOM, which is the native token of the Cosmos ecosystem. Below you will see a chart showing performance in USD terms over the lifetime of it's existence. Though not included on the chart, it should be noted that ATOM has underperformed when benchmarked in both BTC terms and ETH terms. Most altcoins do indeed underperform their benchmarks, but some do not. Again, this is just good to keep in mind, when evaluating projects that ostensibly sit atop a given ecosystem.
Areas For Further Research
Link to Cosmos SDK documentation
- Determine Cosmos main competitors
- Evaluate strengths and weaknesses in relation to major competitors
- Develop an outlook / framework for measuring progress
- Tinker with a wallet, play around with apps / dapps that exist
Open Forest Protocol
Open Forest Protocol (OFP) is an upstart project that seeks to use NFT (non-fungible tokens) as representations of forestation projects. It leverages the Interplanetary File System (IPFS) to store information about reforestation projects in the metadata of NFTs hosted on the IPFS.
Built atop the NEAR protocol, OFP will offer measurement, reporting, and verification (MRV) tools via a mobile app and web dashboard that allow quick easy insight into the state of forestation projects. OFP plans to roll-up artificial intelligence, satellite imaging, and Internet of Things (IOT) technologies to allow forestation projects to swiftly and transparently showcase their progress to the world.
Areas For Further Research
Link to Open Forest Protocol Documentation
- When cryptoeconomics is released, take a look
- Dive deeper into the whitepaper (available at the documentation link)
- Dive deeper into the NFT Research & Analysis Research Report (available at the documentation link)
NEAR is another Cosmos like ecosystem, in that it seeks to merge and connect many discrete blockchains / projects. Indeed it looks to roll-up Cosmos itself, which as discussed earlier in this report, seeks to connect many blockchains. Again, it's hard to make any assessment at this stage as to which of these, if any, might find success. It is possible that one of these protocols / ecosystems emerges as the master-indexer of many different chains.
NEAR runs in concert with Ethereum, Polkadot, Cosmos, and more, allowing for the free flow of assets and communication between networks for the betterment of all.
Insofar as NEAR offers a unique bent / novel proposition they have leaned heavily into sharding as a way of managing the heavy loads that will be inevitable when endeavoring to connect many discrete blockchains.
The performance of the NEAR Protocol token is shown below:
An important thing to note about the NEAR protocol token is that it has outperformed when benchmarked against BTC and ETH -- a welcome surprise. Granted, the token and accompanying project is relatively young and has had less time for enthusiasm to wane, but it's still important to note.
Areas For Further Research
- Test in sandbox mode, play around
- Determine competitor ecosystems
- Establish criteria to evaluate progress relative to main competitors
KLIMA is both a decentralized autonomous organization (DAO) and an ERC-20 token. In their own words:
KlimaDAO will function as a bridge between Web3 and the traditional carbon offset markets, enabling flows of capital to be directed to high-impact carbon projects, that have a tangible impact on our global carbon budgets.
KlimaDAO's approach will enable us to build a climate innovation nexus that can quickly coordinate and execute high-impact sustainability initiatives, standardise best practices across the DeFi space, and grow a community of technical experts to accelerate action.
Areas For Further Research
Link to KLIMA DAO Documentation
- Learn more about the mechanics of the carbon offsets
Fantom is a potential Etherum killer style smart contract platform that promises faster throughput Layer-1 blockchain. It cleverly allows itself to be plugged into the Ethereum Virtual Machine (EVM) which is one of it's distinguishing factors. Like all of the chains explored thus far, it is another proof-of-stake architecture.
FTM (Fantom Token) Performance
Like all proof-of-stake systems it has a token, FTM, whose performance is shown in the chart below:
Again, this token has outperformed against both BTC and ETH benchmarks.
Areas For Further Research
- Look into Staking More
- Seek more info on validator Nodes
TOMB is an algorithmic token pegged to FTM that also has two additional tokens:
- TSHARE (Tomb Shares)
- TBOND (Tomb Bonds)
Together these three tokens are meant to help ensure a stable peg of Tomb (the main token) to the FTM token. In essence Tomb exists to help the Fantom / Opera Network with liquidity.
This token has underperformed against both BTC and ETH benchmarks.
Areas For Further Research
- Staking / Yield Generation
- Tomb Shares ($TSHARE)
- Tomb Bonds ($TBOND).
Overall, there is a flurry of activity in the area of ecologically concerned crypto projects. As you will note, many of these are somewhat duplicative of one another, which is not unusual at the outset. Some will thrive, others will not. Selecting the winners is always difficult, but if you wish to proceed, I am happy to work thru these one by one at your direction so that we can do our best to unearth the best opportunities with an eye towards doing good both for yourself and for the world -- the best way to do business in my opinion.
I will say, as someone who has been working on crypto full time for 9 years now, much of this stuff reminds me of the meme "add a blockchain to it," which is not to say that none of these projects will find success -- Some of these may achieve their aims.
But with that in mind, I will take this tiny section of this report to suggest that you consider Bitcoin Mining.
I know, I know. "Bitcoin Mining (proof-of-work) is a colossal waste of energy that is contributing to climate change."
This is categorically untrue, I assure you. Believe it or not, Bitcoin mining has begun to facilitate the build out of renewable power generation. It's a complex conversation, but the gist is that Bitcoin miners, as a buyer of electricity, enable the buildout of Renewable Energy Power Plants that would otherwise not be built due to financial constraints. Projects like these are breaking ground as we speak all over the globe, thanks to Bitcoin minings ability to be their first customer. I believe that you, with your passion for conservation are the perfect man to take this to the next level.
As a thought experiment. Consider the land in Costa Rica that you just purchased. Perhaps one small corner of it would make the perfect site for a solar farm buildout. But under normal circumstances, this project would be hard to finance because it is not directly near a population center whose lives would be massively improved by access to low-cost, reliable, and cleanly generated electricity. Here enters bitcoin mining. Build the solar farm, use the energy generated to mine bitcoin at first, and then work with the Costa Rican government to connect this much needed, cheap, clean power to the people who need it. Because you will build this solar field yourself at first, you will have total control over how it is done and can ensure it has the least impact on the surrounding environment. Then you can:
- Turn off the miners, sell them, and provide low-cost or even free, clean energy to the surrounding community who will no longer have to ponder the possibility of building a dirty power plant to service their energy needs in the future.
- Sell half the miners, let the other half continue to run. Provide heavily subsidized electricity to the surrounding community, improving their lives, and use the proceeds from the half of your plant that still mines bitcoin to enure that your land remains undeveloped decades and even centuries into the future. AND help the surrounding community with responsible economic development dollars that ensure they are able to make decisions that don't come at a cost of the natural world.
You would be transforming peoples lives, ensuring that not only your land, but the land and communities all around it are able to retain their natural character and that the people in that area of Costa Rica never have to even consider building a dirty power plant to service their future needs for electricity. Then do it again and again all around the world. Bringing clean, renewable energy to the people who need it the most all while personally ensuring that each project you pursue works with the local environment and does no harm.
This is an oversimlpification of course, but it illustrates the point, and I assure you this is a very real thing happening already, but its only just begun. Bitcoin mining is being used with this end goal in mind. It is real, it is already happening. And all that is required is for more people like yourself with both the means and the motivation to make it a reality. Bitcoin Mining can be harnessed by people like yourself to decarbonize our world and protect our natural environments. Food for thought.
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