Get to Know some of the Crypto Autopilot's Picks of August 2021

To accompany our recent blog post Under the hood – August 2021 – Crypto Autopilot where we talked about some of the things that happened in crypto and the Crypto Autopilot, we thought it might be useful to provide you with some extra background and performance information on a selection of the crypto assets that Autopilot was holding in August.

Since this August was all about layer one, layer two and NFT, we thought we’d look at some of those. Strap in and get ready to discover SOLANA, CARDANO, MATIC and Axie Infinity.

SOLANA (SOL)

Solana is a “base layer” blockchain optimizing for scalability. The native token, SOL, has been designed to do two things:

  • Secure the Network through staking and earn rewards for doing so.
  • Pay for fees to use the network or use smart contracts It’s very much akin to Ethereum in what it wants to achieve, but it’s much faster and cheaper than Ethereum is now.

Funding

Solana is very well funded and has managed to raise $335.8 million since 2018. The ICO in 2021 was led by Polychain and Andreessen Horowitz.

Why is Solana whitelisted as an investable asset for Autopilot?

We generally like “Layer one” (base layer) smart-contract platform blockchains because, as they are general purpose computing platforms, they help unleash other people’s creativity. And while Ethereum is the most adopted to date, the speed and price of transactions today is horrible. Also, there is probably room for more than one since there has never been only one of anything.

With a good team recognized by many and a habit of delivering on the roadmap, SOL has always looked like a good asset for the Autopilot’s allowed universe. If that was not reason enough, we particularly like seeing how the SOL team collaborates with other chains (Terra(LUNA), USDC, REN, Ethereum with Wormhole,...), as we think cross-chain collaboration is key to success.

Solana was added to the list of Tokens we like in late 2020 and to the list of tokens we like on March 8 2021. The A.I almost immediately took a sizable position (15.3% at the end of April 2021), moved it to 20% in May 2021 and has kept it around that level since then.

SOL Market Commentary for Aug 2021

Layer 1 blockchains going for higher throughput and competing with ETH tend to get a boost in bull markets due to the fact that ETH gets highly congested and people begin to look elsewhere. It’s undoubtedly the case that, right now, Ethereum is congested and expensive; and competing Layer 1 blockchains have been doing pretty well.

Historically, these types of projects tend to fare less well or die altogether when things calm down. But then again, history is pretty short in Crypto. Solana thus far seems to have had a very good launch period and has certainly picked up pace since November. Solana has been successful with its partnership efforts and seems to be progressing well towards the “multiple blockchains that talk together" future.

Adoption indicators for Solana

As it’s still a relatively young project and doesn’t have the developer adoption of Ethereum, it’s hard to find metrics beyond the basic ones. But here are some things we have been able to glean: Recently, their followers on Twitter grew to 500K They got 100 project submissions for their second hackathon (February 2021) and 350 for the second one in May 2021. This is what the Solana Ecosystem looked like in March 2021 (source: Solanians)

Solana Ecosystem Image from Solanians - March 2021
March 2021
Solana Ecosystem Image from Solanians - July 2021
July 2021

Find the SOL performance, sentiments & price trend-forecasting on https://insights.osom.finance/asset/solana

CARDANO (ADA)

Cardano is a “base layer” blockchain looking at offering multiple features through multiple layers.

The native token, ADA, has been designed for the following:

  • Secure the Network through staking and earn rewards for doing so as well as give stakers access to new issuance in proportion to their staked tokens
  • Pay to use the network’s transaction fees when one does something on Cardano

It’s very much akin to Ethereum in what it wants to achieve - and was created by one of the Ethereum co-founders - but it is currently working on releasing smart-contract functionality.

Funding

Cardano was funded via an initial coin offering with US$ 62M in 2017. As of the end of August 2021, the price of ADA was € 2.35 and it had a market cap of €75B. Why is Cardano whitelisted as an investable asset for Autopilot? As stated above, we like “layer one” blockchains. Cardano has brought an interesting approach (scientifically researched blockchain) and, being run by one of the Ethereum co-founders, it probably has a shot at one of the top spots.

It’s still a little unclear to us how the whole smart contract platform will work - with Cardano using a UTXO model it can’t run DeFi Apps the way Ethereum does - but there is definitely excitement from developers and the wider community.

Cardano has been in the investable universe since the beginning. The Crypto Autopilot has started taking positions in ADA since March 2021 but has only held it consistently since May of this year.

ADA Market Commentary for August 2021

Cardano has made its way to the top of the crypto market recently. It is now the 3rd blockchain by market capitalization and 2nd blockchain by market capitalization for smart contract platforms. The general market sentiment for Cardano is driven by something quite similar to that of Solana above, in that, should it succeed, it might alleviate some of the pains Ethereum is currently facing (slow and expensive transactions). Unlike Solana, Cardano has been around for a while, so why the sudden newfound interest? The Alonzo Hard Fork planned for sometime soon will see the full rollout of smart contracts on the Cardano network allowing for the Cardano network to run decentralized apps.

Adoption indicators for Cardano

Cardano has 2M addresses, and about 140K addresses active every 24h, which really isn’t bad (Ethereum has 61M addresses and about half a million active in the past 24h). There were about US$ 41B transacted on Cardano over the past 24h (for US $6B on Ethereum). The ecosystem map looks busy, but do note that not all projects have launched or are native or exclusive to Cardano.

Cardano Ecosystem from Coin98
Cardano ecosystem as of Aug 2021

Find the ADA performance, sentiments & price trend-forecasting on https://insights.osom.finance/asset/cardano

Polygon (MATIC)

Polygon, previously known as Matic, is a scaling solution whose primary goal is to enable faster transactions, a better user experience and lower fees on the hugely popular Ethereum platform. This type of project - a chain above a chain - is what is called a “Layer two” project. The native token, MATIC, is used for the following:

  • Pay for fees on the Polygon sidechain(s)
  • Secure the network through staking

It’s kind of like Ethereum on Ethereum, where you sacrifice a little security for the sake of speed and cheaper transactions. You can read more about the Tech on insights.osom.finance.

Matic’s funding history and backing by Mark Cuban

Polygon (Matic back then) raised the equivalent of $5.6 million in ETH in April 2019 in an initial coin offering (ICO) via the sale of 1.9 billion Tokens. High profile billionaire-investor Mark Cuban is a recent backer, user and avid supporter of Polygon. Coinbase Ventures is also a known investor.

Why is MATIC whitelisted as an investable asset for Autopilot?

We like Layer ones, so it stand to reason that we would like layer two. Indeed, layer two are also general computing platform, but they just make more sense for some use cases. Indeed, when transacting in Billions for inter-bank settlements, it might make sense to go for the incredibly security-hardened Ethereum, and it’s fine if it take 10 min and costs 100€ (it’s actually an improvement over the current standard). But if you want to play a silly game where you need to pay for 1 transaction every minute in the hopes of making 30 cents here and there, it won’t be quite fun if you need to wait 10 minutes between gameplay and need to pay 100€ to earn 30 cents. And the use case doesn’t require all the security that the settlement required. So you can get away with using something a little less safe, but faster and cheaper.

Polygon(MATIC) has a team that has been widely recognised as having one of the best implementations of the “layer 2” ideas. They’ve played well with others and have built meaningful partnerships to have Layer 1 decentralized apps ported over to Polygon. Aave, Sushiswap, Curve, 1Inch, Pooltogether, Dodo, bZx, Transak, and OpenSea are just some of the many names that have ported their Dapps to Polygon.

MATIC had been whitelisted as desirable since the beginning. The Crypto Autopilot only started taking meaningful positions in May 2021. It has held a position between 1 and 5% since then. As the success (and therefore, the price) of MATIC is pretty correlated to the success of Ethereum - as are many of the other tokens in the universe - it does make sense that the A.I. wants to diversify and has not held a large position.

MATIC Market Commentary for Aug 2021

As we said in the introduction to our “Under The Hood” article, this summer could have been called Layer 2 summer, so the market sentiment was pretty good for MATIC. Indeed, MATIC is the #1 Scaling solution by market capitalization, and 10x its nearest competitor, OMG. This is for the same reasons as those explained for the recent performance of SOL and ADA.

Adoption and user metrics for Polygon and Matics

Polygon has over half a million wallets and recently processed 7M transactions in 24h. The adoption rate by Dapps developed on layer 1 and who were looking to offer a more “accessible” experience has been very good. MATIC is the most used scaling solution to date.

Find the MATIC performance, sentiments & price trend-forecasting on https://insights.osom.finance/asset/matic-network

Axie Infinity(AXS)

Axie Infinity is a “play-to-earn” game and virtual world built on top of Ethereum through the Ronin sidechain. When you play you can collect, breed and fight with Axies. All the game’s assets are Ethereum tokens which can be traded outside of the game.

The Axie Infinity token (AXS) is the governance token. It’s also used as the in-game currency to purchase items. It’s also used to breed new Axies. The breeding fees are given to the protocol’s treasury, to be governed by the AXS token holders.

The game, in addition to requiring AXS, also requires SLP - Smooth Love Potion. SLP is used to breed new Axies and given as a reward for battle won and adventure achieved.

Funding

Axie Infinity has raised about US$ 9M since 2019. It counts several prominent blockchain funds as well as Mark Cuban amongst its investors.

Why is AXS whitelisted as an investable asset for Autopilot?

It can’t all be layer one protocols. Decentralized Apps - Dapp - are what layer one protocols are meant to enable. While investing in them is considerably more risky than investing in Layer one protocols - because they are 1 use case as opposed to 1 platform for many use cases - “little apps on protocols” have in the past proven to be able to reach massive scale too. Google is one example, Facebook is another.

So we do think that allowing the Crypto Autopilot to take positions in Dapps is as interesting as taking positions in protocols.

AXS is one of the pioneers of Play to Earn and has a very good, world-wide following.

AXS was whitelisted as investable in mid-August 2021 and the Autopilot subsequently took a large position in it.

AXS Market Commentary for Aug 2021

While Axie Infinity has been doing just fine since 2019, it is its switch to the Ronin Sidechain that really helped it take off earlier this year. The full migration to Ronin was done April 28 and followed by the 1,000% rally in the price of SLP. Indeed, the sidechain allows them to dramatically reduce the transaction fees for players (I’m sure you are sensing a theme here). The resulting increase in community adoption - as well as some sponsorships from some well known crypto influencers - helped draw even more new participants.

Adoption indicators for Axie Infinity

Looking at the raw on-chain data from DappRadar, it is hard to miss the recent spike. Mid-August, there were 28K users recorded on-chain, which is up from about 800 on January 2 of this year. 10 hours ago, an Axie sold for 23.92 ETH.

Axie Infinity engagement from DappRadar Dashobard - Early Sept 2021

Activeplayer.io counts 100K concurrent players and 10M average monthly players for the past 30 days as reported by Steam.

Find the AXS performance, sentiments & price trend-forecasting on https://insights.osom.finance/asset/axie-infinity