Get to know: NEAR, GALA, and IOTX
Find out more about the background and performance of a selection of the crypto assets that Autopilot was holding in December 2021.
To go further than our monthly "Under The Hood" article where we go over what happened in Crypto and the Autopilot, we give you a monthly deep-dive on the nature and performance of a selection of the crypto assets that Autopilot was holding in the prior month.
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As we rolled into the new year, the Autopilot held the following assets: BTC: 23.6%; LUNA: 23%; NEAR: 11.2%; CELO: 11.1%; TFUEL: 8.4%; GALA: 6.7%; TRX: 6.1%; MATIC: 4.7%; AXS: 2.2%; MANA: 1%; IOTX: 1%; LRC: 1%
From those, this month we will pay close attention to NEAR, GALA and IOTX. If you want to know more about Avalanche, Loopring, Luna, Algorand, Solana, Matic and others, you can find the other deep-dives from the past months in the news section of our blog and past podcast episodes.
We offer a Crypto Wealth Manager with a Robo advisor and strive to fully automate your crypto trading and crypto passive income strategies thanks to artificial intelligence, but we also think it's worthwhile for you to understand the crypto revolution. Our bots get your assets to where they need to go so you don't need to do anything manually, but you'll better be able to assess the crypto strategies we propose to automate if you understand the state of play.
So, to save you the manual research, our team shares its knowledge in these monthly deep-dives in a manner you will hopefully find digestible. If you have any questions or feedback about these deep dives, do reach out to us at email@example.com.
NEAR Protocol (NEAR)
NEAR - https://near.org/ - is a smart-contract platform born from the frustration of two AI researchers in 2017 who found Ethereum to be a little too cumbersome to use for developers and users alike. NEAR works with a Proof-of-Stake consensus mechanism and supports sharding for scalability (much like Ethereum soon will). It went live in 2020 and built a bridge (the Rainbow Bridge) to Ethereum in 2021.
The token - NEAR - is the core medium of exchange and unit of account for transactions on the network. It is used for security (through staking) and to pay for network fees (usage rights). Fees are mostly burned but a small portion is allocated to developer rewards so as to incentivize developers to build on NEAR. Much like Ethereum too, new supply is generated through staking rewards.
NEAR Protocol Funding
Near has raised several million dollars to start with. Their backers include some of the best-known and most active venture funds in crypto with Blockchain.com Ventures, Coinbase Ventures, IDEO collab, Multicoin Capital, Pantera Capital, and A16Z Crypto amongst them.
Why is NEAR Whitelisted as an Investable Asset for the OSOM Crypto Autopilot?
NEAR is a "layer-1" contender, aiming to make it accessible to build for Web3.
And, when they come from a team of smart people followed by smart money, we like to make it possible for the Autopilot to take positions into those kinds of assets because of the Fat Protocol Thesis - the idea that a layer one blockchain can capture some value from everyone that build on it and that it is, therefore, de-facto a less-risky bet than a single decentralized application, the same way investing in the Apple App Store is less risky than investing in one app on the Apple App Store.
Near has seen a lot of traction in the past year and has excellent VCs backing them.
Near had been on our radar since January 2021 and was first suggested by the AI for inclusion into the crypto strategy of our Crypto robo-advisor in mid February of 2021. But the trading bot didn't actually add it to the portfolio until December of 2021. In December, its impact on the BTC performance was excellent and it was the second most positively contributing asset after Terra(LUNA).
NEAR Market Commentary
Layer-1 blockchains that seek to alleviate the problems that Ethereum is currently experiencing (high fees, small number of transactions per minute, PoW potentially being a contributor to CO2 emissions) have been doing very well over the past year as the demand for blockspace grows and Ethereum can't meet all of the demand and is often congested.
As we enter 2022, without looking at stablecoins and meme-coins, Layer-1 contenders are the "top-dogs" if we use market capitalization as an indicator. Indeed, they occupy the entirety of the top 20 and the first decentralized app to be found in the list is Uniswap, in the 21st place. Near is 18th by market capitalization.
If we look at the importance of NEAR in terms of "value locked", though, it's the 30th chain at the time of writing with USD 160M, or about 0.11% that of Ethereum.
Near is an interesting contender and has interesting approaches to offer. But in a world where there is quite a lot of cheap blockspace on offer outside of Ethereum, it will have to compete hard to make itself heard. But with close to a billion dollars in dry powder, they could do some serious noise in 2022.
Additionally, the annual Electric Capital developer report showed that NEAR was amongst the largest developer ecosystem and that it was growing faster than Ethereum did at similar points in its history. NEAR is now the 6th largest ecosystem in 2021, with 4x+ growth and is in the "large" ecosystem (with more than 300 developers).
300 developers may not sound like much but while there are about "2,500+ developers are working on DeFi projects. Less than 1,000 full-time developers are responsible for over $100 billion in total value locked in smart contracts." says Electric capital. So with 300, you can go a long way.
GALA Games (GALA)
Gala games' ambition is to make "blockchain games you'll actually want to play". They strive to make fun games owned by players and developed according to the direction given by the community and supported by player-owned nodes. Gala Games was founded by Zynga cofounder Eric Schiermeyer. They started in 2019 and currently have 1.3M monthly active users. You can find their list of games here: https://app.gala.games/games
Besides NFTs for specific games, Gala Games also has its own utility token, GALA, which is used to reward node operators when the sidechain launches & to be used in-game and to purchase items. It's an ERC20 token but will soon also have its own sidechain, a little like the Ronin Chain of Axie Infinity.
In contrast with a lot of crypto projects, Gala Games has received no VC funding and there was no ICO for the GALA token. The founders bootstrapped the company and it now earns revenues from the NFTs in its games.
Recently, Gala Games and C² Ventures launched a $100 million fund to accelerate the development of blockchain gaming. It is an alliance between Gala and a new crypto investment fund led by Ciara Sun who was head of blockchain investments for Huobi.
Why is GALA Whitelisted as an Investable Asset for the OSOM Crypto Autopilot?
Gaming, Metaverse and Play to Earn are all very interesting corners of Web3. The fact that the team at GALA is made up of the gaming industry veteran and a Chief Marketer who was an ex-United Nations employee and sees play to earn as a way of lifting people out of poverty is a very good indicator of that.
And much like it is desirable to own layer-1 chains because of the "fat protocol thesis" (see above), it is potentially desirable to own a game design studio that creates crowd-sourced games & little economies in them. It is of course one level of abstraction after the layer 1 blockchains, but it is still a fairly diversified play.
When it comes to GALA specifically, the fact that the company was created without VCs or ICOs or pre-sale of any kind might mean that GALA could see a pretty "fair launch", a little like Bitcoin's was.
GALA came on our radar as it was suggested by the AI in late 2021.
Much like our comments on "The Sandbox" for the November edition of our deep-dive, GALA is surfing a really hot trend. And its listing on Binance in September gave it a bit of a boost. The announcement of GALA being listed on Coinbase gave it a bigger boost. It's quite visible on the charts. Our forecasting algorithm seems to indicate that the trend should continue.
Another newcomer in the universe and portfolio, IOTEX (and https://iotexlab.io/) is an interesting asset. In its own words, it is built for the Internet of Trusted Things as "a decentralized ecosystem where humans and machines can interact with guaranteed security and trust. We are on a mission to ensure everyday people and businesses can own and control their devices, as well as the data/value they generate. By connecting the physical and digital worlds, IoTeX will democratize access to machine-backed DApps, assets, and services to deliver value to users and fuel the new machine economy."
The IOTX token manages the network's incentives alignment and is used to pay for access to decentralized apps, certify devices (by burning IOTX), and secure the network through staking. If you want to read further about the platform and the tokenomics, they have a very nice documentation site here.
IOTEX is from silicon valley and the founding team has a nice list of credentials: PhDs, former head of cryptography at UBER, Product leads at Facebook, senior research scientist at Bosch. And they have a long list of VC funds behind them. The total funding isn't publicly available but some sources hint at USD 25M.
Why is IOTEX Whitelisted as an Investable Asset for the OSOM Crypto Autopilot?
Use-case-specific blockchains (such as Terra) can be a great advantage to a project if done well.
And it is reasonable to think that Machine to Machine (M2M) communication and M2M finance might need a dedicated space (read, blockchain) to best cater to its needs. The question will be how IOTEX manages to build bridges to the rest of the (blockchain, but not only) world so that its devices can still enjoy the possibilities available outside of its walls.
As it started meeting our quantitative criteria at the end of the year, we were happy to whitelist it for the Autopilot to consider. It had been listed at Binance since 2018 and it got listed on Coinbase in August which greatly helped with visibility and saw the price nearly 5X before settling down and doing another 4X mid-November. It has since come down but is still 1400% from where it was a year ago.
(a) This is not investment advice, nor a solicitation. Crypto markets possess a high level of risk, including volatility and regulatory uncertainty. Past performance does not constitute a guarantee of future results in any way. You are solely responsible for doing your own financial, legal, tax, or investment research before taking any actions. (b) Past performance is no guarantee of future results. (c) Be sure to check the list of countries we accept before signing up and sending us your assets.
All quoted performance of OSOM solutions is before performance fees. And past performance is no guarantee of future returns.