In a recent post, I outlined the process I use to assess the viability of a project as an investment. This article provides an example of the practical implementation of that process with EOS as the crypto in focus. Please note, this is a subjective assessment and therefore reflects my own bias – DYOR!
Step One: Snapshot: CoinCheckup
Seven Day chart:
Price action this year has been highly impressive, higher highs and higher lows in a strong bear market. Very bullish from a long-term outlook.
Step Two: Problems Addressed – Speed / Scalability / Security / Adaptable Governance
Speed, currently 3996 max TPS, scaling very well to date though has recently plateaued at 4k. Very fast as compared to current market competitors. Source: EOS Network Monitor
Scalability: claimed near-unlimited scalability implemented within software. Unproven
Security / Stability: 21 Block Producers model with many other BP’s ready to step in. Compromise between the unrivaled security of PoW of BTC and the flexibility of the 21 validator system.
Governance: outlook positive / voter participation still small but growing. Reasonable expectation of greater voter engagement if incentives are offered to do so (pending). Some BP behavior may not align with EOS holders – could be a significant issue in time
Step Three: New? Many new or innovative ease of use elements such as human-readable addresses, no fee structure etc. Data Source
Minimum viable product – Mainnet up and running, for the most part stable, some bugs but effective response to them so far.
Step 4: Team Not entirely easy to assess.
Block producers augment EOS and bring a large number of developers to the project. Strong relative to most other projects but as of now far behind Ethereum (dated information) for the number of and arguably overall talent of developers.
Block.one private entity – recently lost a lot of senior management.
Step 5: Tokenomics – outlook excellent.
The EOS token well is integrated within the project, there are many possible avenues for appreciation. Voting incentivized staking if this eventuates will be very bullish for EOS value. Little likelihood of EOS token becoming decoupled from the success of the project itself. Frequent airdrops / airgrabs add value to simply holding EOS.
Step 6: Community – thriving and growing.
Block.one Twitter 191k / Telegram 76k / r/eos 54k plus many engaged BP communities and EOS affiliated projects. The EOS ecosystem is very active with new projects such as Trybe continuing to build EOS awareness and community.
Step 7: Current activity – very active.
Whole eco-system forming, the outcome is unknown but dApps are arriving and some such as EOSBet and EOSKnights are gaining some traction. Too early to make an informed judgement, but the potential is obvious. Block.one are releasing regular updates and many BP’s are releasing useful utilities for interacting with the blockchain such as EOSToolkit by GenerEOS and EOSAuthority’s Telegram bot. The release of Nano Ledger support is also a significant development and necessary for long-term investment.
Overall investment thesis: very strong over 3-5 year horizon. Dollar cost average in every month within $3 to $10 range. Current goal position building reassess in 12 months.
During a bull run EOS should outperform the majority of other crypto projects. Lastly, the project is exceptionally well funded with $4 billion raised during the ICO period. EOS can weather an extended bear market and still continue to expand, develop and innovate.
Reasons to be cautious (skeptical) – 4 key areas of concern
Virtually unlimited scaling – claim only at this point reassess in 12 months if no progress consider scaling down on investment.
Team: Dan is key, if he were to leave – project might stagnate Block.one management flight is a concern
Dapps still no killer app – reassess in 12 months
Governance and incentives need to be positively aligned, reassess in 6 months. If no or negative progress, scale down on investment.
And there you have it, DYOR in practice. In this case, EOS is found to be a strong buy. Remember this is only my judgement and reflects my investment thesis which may not suit you. As always questions, comments, and critique welcome.