I recently completed a multi-coin review and move of my crypto assets as a part of the Atomic Wallet writing competition. This got me thinking about all the smaller pots of crypto I've picked up over the years which has inevitably led to the question "Are they worth hanging on to?". We all get really excited about projects when we find them, they often have really good starting point and ideas that we can buy into. But after the honeymoon period are we often left wondering what we saw in them in the first place?
As a bit of a thought experiment I'm going to have a go at setting up some criteria for myself to determine if it coins/tokens I have worth hodling, selling or consolidating (into BTC/ETH). Now please be aware this is a subjective process and I'm building these criteria from scratch. I thoroughly expect them to not be robust, though I do recommend that you take a look at your own portfolio and see if you can do the same. It is very easy to get complacent and be left sitting on an egg in the hopes that one day it will hatch. I am starting to come to the realization that rather than sitting and waiting on lady luck it is much better to take an active effort in shaping your crypto destiny.
Initially when I started writing this article, I figured it would be just the one, however, sketching out my initial thoughts it seemed like more suited to breaking up into bitesize chunks. I'll start here with the initial framework and then look at the first category. Remember that this isn't financial advice nor is it technical price analysis, you'd probably want to get that information from someone more qualified!
Building a Framework
In general I'm initial approaching this with 4 main categories in mind. Under which, I hope to be able to pull together useful information from various web resources to help come up with scores for each area. From there I'd like to be able to bring these scores together to give an effective overall score and see how that looks in order to determine the HODL, SELL or CONSOLIDATE score.
By establishing 4 main pillars that can be used in grading I am hoping to be able to map out (when combined) and establish if a coin does or doesn't have a place in my future portfolio and determine when it would be in my best interest to shed some dead weight. For the examples throughout I will start with Electroneum (ETN), the reason I am starting here is it ticks the boxes as one of my dust coins weighing in at a meagre 337.35 ETN. As I said before I'm going into this process blind to see if it is possible to come up with a way of analyzing a project using the above criteria, as such I'd be interested on general feedback.
Going through each element of the categories, for now, I think a simple scale of 1 to 5 should suffice something like this:
- 5 - Very Favourable
- 4 - Favourable
- 3 - Neither Favourable nor Unfavourable
- 2 - Unfavourable
- 1 - Very Unfavourable
Afterwards we can start to build an overall score from the component parts.
Category 1: Community/Development
So when talking about community and development the things we're looking for here are details about the current/recent developments within the project, the frequency and/or usage of the GitHub, social media numbers, wider world trends and corporate news.
I picked this section first because I already knew of some really useful resources out there thanks to CoinGecko. First off, the bat lets look at the social presence. If you go to the CoinGecko site and search for the coin of interest, then scroll down just below the conversion widget you can see a few different tabs, click on social will give you something like this.
What this initially tells us is that ETN have a decent following on these social platforms, but when looking at the average new post count on Reddit for example we can 0.4 posts an hour there is not a massive amount of chatter going on right now, just 5.5 comments per hour, though it also hasn't dried up completely. Just looking at these numbers alone it can be quite difficult to establish if this is good or bad. So, let's look at this in comparison to 4 of the top 5 (BTC, ETH, XRP, BCH).
So now we're starting to get a sense of these numbers. Indeed, one thing sticks out as a little surprising in my mind that is the relative number of Reddit users (total) to the number of active users. If we look at them as a proportion it is close to 10% of their user base is actually active in this medium, which in turn means there is a good chance that social messages on this platform can reach the audience a chunk of the audience. That said the number themselves of users are quite low for a coin that is within the top 100. However, moving over to Facebook and twitter we see quite a reasonable social standing which is comparable with coins in the top 5 and even better than the BTC/BCH in the twitter sphere.
Next up let us look at Google Trends, this is another useful tool for us to get an idea of general interest in a project and it particularly useful for looking at the general trajectory. While I think we need to take any trends we see in plotted data with a pinch of salt (since no statistical analysis has been performed on the slope) we can get a feel for a trend.
Search Term: ETN (5 years)
We can see that the interest was pretty flat for most of the last 5 years with a big crypto-goldrush spike in the middle. However, what is concerning is the trend right at the end where we can see interest seeming to drop off.
Search Term: ETN (1 year)
Search Term: Electroneum (1 year)
Taking a closer look at the last 12 months we can see there is definitely what appears to be a decline in interest for ETN, which in general is mirrored by the Electroneum search term (except with a very recent blip in interest, which we'll see later ties in with the developmental activity at this time).
On top of the general declining trend we can also look at the regional distribution of this trend data for the last year and can see that it is quite heavily weighted toward just one region.
Weiss Crypto Rating
So we've an idea now about the social and regional buzz surrounding a token. Next up we can look at a more formal grading system, the Weiss Crypto Rating. Here is a little exert from their FAQ:
Weiss Crypto Ratings is a division of Weiss Ratings, LLC, which began in 1971. Weiss Ratings is among nation’s leading independent rating agencies, covering 55,000 banks, credit union, insurance companies, stocks, ETFs and mutual funds. Unlike Standard & Poor’s, Moody’s and Fitch, we never accept compensation from issuers, sponsors or any entity we rate.
Now rather than looking at the whole rating we are interested here in the development and the community side of things so we're going to lift out just the score for technology and adoption. Where on the scale, as with school grading, A is good and the further you get from it the worse it is.
In conjunction with the Weiss rating we can also head back over to CoinGecko to look at the developer tab. We can use this to get a picture of the activity on the GitHub for a project. While this will peak and trough with a projects roadmap goals it can give us an idea of the number of registered issues and weather there is an active effort to close them. It can also give us an indication of the current development levels.
We can see that late 2019 there was a marked increase in activity which as slowed down in the first quarter of 2020. This fits with what we know about recent changes in the project moving from earning via the mobile app to implementation of the ETN Everywhere and AnyTask initiatives earlier this year.
So this final section is where we can take a look at the activity from a project's core team to gain a bit more information about the current adoption drive and how they engage with the community and any recent project development. This can often tell us a lot about the recent development changes and how the project see itself or wants to be seen. For this bit we are going to the source and checking out any press releases or authorized blog posts. Note that this one is a bit more subjective as it is up to me to pick out notable posts and try to categorize them.
- Total: 7
- AnyTask (use case) - 3
- Regulations (adoption) - 2
- General - 2
- Most notable post:
- Total: 6
- AnyTask (use case) - 3
- World events (covid/environment) - 3
- Most notable post:
- Total: 8
- AnyTask/ETN Everywhere (use case) - 4
- Company Overview/Updates - 2
- General - 2
- Most notable post:
June (to date):
- Total: 6
- AnyTask/ETN Everywhere/Phone Top-up (use case) - 3
- Company Overview/Updates - 3
- Most notable post:
So what we can see here just looking back over recent months is a real momentum from the team and focus on the use cases. Indeed, they appear to have been really pushing AnyTask (a freelance working system). However, there is also (as with other businesses) a focus on maintaining a positive outward image in the crypto space, including details of new exchange partnerships, company "transparency" and their own analysis of their user base.
Wow, well this one started as a very rough idea and I'm amazed at just how much information we're was able to start to pull together from different sources. So, let us try summarize what we have and then bring it together to give a score for this element.
Social Media: 3
This one is a bit static, the social activity on these platforms is not life changing, though it isn't negligible. The frequency of posts is steady (albeit low), from the details of Reddit alone it is hard to see much social interest. I wonder about expanding this section to cover some analysis of twitter hash tags etc.
Search Trends: 2
For this category there was a decline in the search interest. The regional market may have hit target, however, without widespread adoption then security of position is at risk. What I would like to see a wider spread of regional trend data, in conjunction with a stable
Industrial rating: 1
This was very unfavourable, this is definitely a concern as it shows that at an industrial (crypto/finance) level Electroneum hasn't won people over. Which could signal a lack of wider spread adoption/buy-in from bigger partners.
As with the social media the activity on the development side looks to be quite static. We see a peak in activity around the time that AnyTask was kicking off and the Phase 2 of companies plans were implemented. Since then it has tailed off again.
Global Message: 4
Here we see reasonably consistent activity in the short term with what looks like a corporate drive for adoption which is good. There is also a marked effort to look at the cryptosphere and try to show their place in it all. Though, this one can be quite bias it gives the impression of a company moving forward in the very least.
Community/Development Score: 2.6
Looking like for this section of the analysis Electroneum is coasting along in the middle of the road but perhaps leaning toward unfavourable.
As I said at the beginning this isn't a fixed method right now and I'm open to any suggestions/ideas or thoughts would be welcome. Particularly if you see any big gaps in the process or sources of information. I realize this is a relatively simplistic approach and don't doubt it would need a little more testing to find a suitable combined scoring process. I'd be very interested if anyone else has done something similar and if/how they have decided which coins/tokens to hodl, which to sell and which to consolidate.
Hope you enjoyed the article and if gave some food for thought, good luck y'all!