EcoFi offers an open-source, permissionless, and censorship-resistant protocol for the Ethereum network. In this post I will analyse the EcoFi project, and rate it in terms of the 'Vision' criteria in the SVET framework. This rating is conducted from an unsponsored, unbiased perspective and serves merely an informative purpose- not as financial advice (!)
Recap of Framework
The framework is designed for technology analysts to be able to assign as close to an objective rating as possible on the merits of a project.
Within the review of a project's 'Vision', the following criteria is assessed:
SVET Vision Rating:
- 'Sustainability': How stable were this coin / token prices in the past and now? How big / small is this coin / token market cap? How likely is that the market cap will grow / fall in the future?
- Volume: you have to gauge project’s targeted Market’s Size and number of platform’s Users.
- Empathy: you have to weigh up project’s Community.
- Timing / TimeLine: you have to analyse project’s future Development Plans.
The rating is assigned from a scale of a, b and c, with the +/- variant indicating a strong/ weak performer respectively in that category.
Vision Review
Singularity
Holistically, the product being offered by EcoFi is not unique, as there are multiple projects which seek to provide a protocol offering the triad of “open-source, permissionless, and censorship-resistant” much like itself (EcoFi, 2021). To name just a couple there are the Ceramic (The Ceramic Blog, 2021) and Akash (Akash, 2021) networks. However, to offer a fair representation of ‘Singularity’ one must consider that EcoFi’s product is also unique in it’s other solutions; for example the ability to fractally own real, famous artworks through the concept of NFTs. This sets it apart from many NFT projects as this art often has historically demonstrated social value as well as significance and can be “delivered to your door” should you use the SPRT token (earned by staking $ECO) to obtain all the NFTs. For this reason, it seems to offer an average ‘Singularity’ within the industry (b).
This being noted, the EcoFi team makes a clear effort at branding itself differently through repeated promises of “endlessly finite supply” (EcoFi, 2021). Decomposing what the actual promise is reveals lack of substance to this claim due to two reasons: firstly, “every time SPRT tokens are exchanged for a good or service in the EcoFi marketplace… half the SPRT tokens are burned” (EcoFi, 2021) which is not a special mechanism by any stretch, and secondly, they seek to “implement a compound inflation structure that is robust against hyper-inflation” by consulting “expert economists” (EcoFi, 2021). To the critical eye, this is both a vague and contradictory claim which is why in terms of technological ‘Singularity’ it may be doubted to a higher extent than the actual line-up of NFTs and artworks which are of a strong impression; consisting of, Van Gogh, Keith Haring and Pablo Picasso to name a few.
Ultimately thus, it cannot distinguish itself far from other innovation seeking DeFi projects and remains with a rating of b.
Volume
The platform, “built to facilitate the growth and evolution of the DeFi marketplace on the Ethereum blockchain”, will operate in a market with ample volume, highlighting that 95% of the Ethereum network’s growth came from decentralised finance alone in 2020 (EcoFi, 2021). It is important to be critical of this point, as the majority of growth on key blockchains is undoubtedly DeFi and thus this figure is not special in itself. Where it would do better to highlight, and update its statistics on it’s website, is the explosive growth in the NFT industry and the sales volume alone being enough to attract corporations such as Porsche, Fox Entertainment, and Taco Bell (to indicate the ample variety of interest). The sales volume, in recent figures, made headlines with a record $2.5 billion in the first and second quarters of 2021 (Howcroft, 2021), with half that figure, $1.15 billion being achieved in the month of August alone (NonFungible, 2021).
The overall sales volume indicates a booming market and industry to operate within, so externally the ‘Volume’ rating hints a robust level meanwhile the internal volume of the project can be deemed sufficient for it’s needs as it had more than enough participants for its beta project, having to enforce a maximum capacity instead of maintain open-invitation (EcoFi, 2021). To emphasize, this does not entail a positive rating but mitigates a negative one as it has not fallen short of participants, exclusively, from one community channel, Twitter, alone (EcoFi, 2021).
Rather, in the face of broad-industry strength, and user numbers to indicate sufficient demand so far, the ‘Volume’ rating may be deemed b+.
Empathy
EcoFi’s beta participants were selected from its twitter channel alone consisting of 21,800 members but to put things into perspective of the ‘Empathy’ rating, this seems to fall behind NFT projects with a similar age. This problem is exacerbated when looking at the telegram group, unquestionably a favoured marketing and community tool for industry projects at present, as it only consists of 1500 members. Yet, the quality of community conversation, in line with EcoFi’s mission “to help spread awareness and facilitate the greater public to both realize the potential of, and capitalize on this burgeoning marketplace” (EcoFi, 2021), is indeed appreciable as they are less generically token oriented, as in much of the Crypto community, and more towards general Art enthusiasts.
This may also help explain the unusual, at least in the industry, disparity in Twitter followers and Telegram members as the crop of Crypto traders do not make up the bulk of the support for this project. However, this is a short-extended positive and the critical eye once more observes the lack of substantial channels in general, especially surprising given the project’s age compared to competitors, within the NFT industry. This includes the YouTube channel with a mere 263 subscribers.
This leaves an ‘Empathy’ rating of b-, indicating an average, but questionable community attachment.
Timing
Whilst beta and the ‘Hype’ mainnet are in the testing phase, it is key to note that this is being done behind schedule, with the “Hyperobject NFT Marketplace” originally planned to go live in the second quarter of 2021 (EcoFi, 2021). Now months behind schedule, with a less than expected community membership, the only saving grace for the ‘Timing’ rating is the ‘Hyperobject Gallery’ which is an impressive collection “featuring original art pieces from Andy Warhol, Pablo Picasso, Vincent van Gogh, Keith Haring and other well-known artists” (Hyperobject Gallery, 2021). Noting the time and effort that it would have taken for such a collection, as it cannot be compared to other NFT projects that rely on community contributors, the rating seems to attract a lower than average but still with some merits ‘Timing’ rating (c+).
To further justify this rating, the “immediate goal is to get exclusive rewards into the hands of the first movers in our community as a personal thank you for their support” (EcoFi, 2021) during the product launch which is a vague and limited ambition without a quantified timeframe. This aggravates the issue of being behind schedule and further exacerbates the aforementioned problem of needing to “avoid rampant inflation” by consulting “expert economists” (EcoFi, 2021).
Without a specified, objective and numerically quantifiable goal, and a timeline which hasn’t been updated in over a quarter at the time of writing, this project is assigned a ‘Timing’ rating of c+.
Verdict
Singularity (b), Volume (b+), Empathy (b-), Timeline (c+).
References
Akash, 2021. Homepage. [Online]
Available at: https://akash.network/
[Accessed 25 August 2021].
EcoFi, 2021. About. [Online]
Available at: https://ecofi.io/about
[Accessed 25 August 2021].
EcoFi, 2021. finance_eco. [Online]
Available at: https://twitter.com/finance_eco
[Accessed 25 August 2021].
EcoFi, 2021. Whitepaper. [Online]
Available at: https://ecofi.io/about/whitepaper
[Accessed 25 August 2021].
Howcroft, E., 2021. NFT sales volume surges to $2.5 bln in 2021 first half. [Online]
Available at: https://www.reuters.com/technology/nft-sales-volume-surges-25-bln-2021-first-half-2021-07-05/
[Accessed 23 August 2021].
Hyperobject Gallery, 2021. Collect on HYPE. [Online]
Available at: https://hyp.eco/
[Accessed 26 August 2021].
NonFungible, 2021. Market Overview. [Online]
Available at: https://nonfungible.com/market/history
[Accessed 2021 August 23].
The Ceramic Blog, 2021. What is Ceramic?. [Online]
Available at: https://blog.ceramic.network/what-is-ceramic/
[Accessed 25 August 2021].
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