Right place, right time — no moon: What happened to the projects destined to fall away?
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January 1st 2017. Crypto is about to embark upon a bull run bringing global attention and vast fortunes. We now know the names of the successful, with 15 of the top 30 today (including the Bitcoin forks, due to their lineage) also appearing on the list below from two years ago. But what of the projects which lost all relevance, which sank amidst the rising tide? Why were they destined to fade into obscurity, not just underperform the market but lose their investors money? And is there a parallel to draw to today’s market?
There are several projects which, although outside the top 30, are still existing and have broadly followed the general market trend or have continued to make progress. These include the familiar names of Waves, Dogecoin, DigixDAO, Ardor, ICONOMI, Bytecoin and the duo of Dan Larimer projects, Bitshares and Steem (although the latter recently announced that it was making 70% of its employees redundant). None of the DApps which previously appeared in the top 30 retained their spots, although the likes of Augur and Factom have remained relevant. The ones of more interest to me are the ones which now seem set to be lost to history.
Two years ago EDR sat in the top 30 with a market cap of c. $10m. Today it sits 240th, with a market cap of…c. $10m. Let’s go back to August 12th 2016, and have a look at their launch press release. Some choice excerpts:
The principle of the E-Dinar Coin algorithm is as follows: during the performance of the transaction it is must be confirmed tenfold; each of the computers, confirming the transaction, receives remuneration that is calculated in the following way: it takes into account the age of the coins that are stored in the user’s account and upon the reach of the age of adulthood it increases within a number of days (period) depending on the amount that was held in the account of your wallet and multiplied by the interest rate (up to 0.65% per day).
- E-Dinar Coin advantages: Globality. E-Dinar Coin plans to provide all residents of Earth with the sufficient number of coins in the purpose of the independence from other money
Oh, and it had a total supply of 999 trillion, with 2.5bn premined. How did this ever fail? Well, and this will shock you, EDR was a ponzi scheme. Unbelievable. The warning signs were there from the start. Well, less warning signs and more just out and out telling people it was a ponzi. Today the website seems to fail to load properly and the FAQs haven’t been updated since 2016. It also has possibly the worst graph of all time.
Amazingly, EDR apparently has a daily trading volume of $500k. I’m sure that’s all real, especially with a $270k daily volume vs USD pairing on the exchange Exrates (nope, me neither). It rose to a high of c. $30m in mid 2017 but even the November-January bull run couldn’t life EDR to those highs again.
Unlike some of the others here, Gulden is a still functioning protocol which remains in active development and trades on Bittrex. Initially based on Litecoin, the project also benefits from an easy EUR pairing/buys directly from debit cards through Nocks — fairly unusual for an alt. You could also send money directly to your bank account from Gulden apps which is again something you don’t see much.
The project’s big implementation last year was PoW², a hybrid PoW/PoS model in which the mining element of PoW remains but alongside ‘Witnesses’ which can lock up their NLG in order to verify transactions in the same manner as miners do while receiving interest upon their holdings.
The Gulden community seems to have remained fairly active, albeit with what can only be described as mixed emotions towards the developers. The project had a rather large premine, with 170m (a little over 10% of the total supply) assigned to the Dutch founder Rijk Plasman. According to the Gulden website, he has only 62m left of this premine.
It is a tad unfair to include Gulden alongside some of the others on this list, it appears simply by virtue of dropping considerably from its former ranking. It certainly wasn’t all bad for NLG holders as they saw a rise from a market cap of $10m in Jan 2017 to highs of over $170m in December. It now sits back at $10m. Again, this should be instructive to investors; if you find yourself 000s of % up in a bull market, make sure you take profits along the way.
However, if EDR has one of the worst graphs I’ve ever seen then Gulden has one of the most misleading charts I’ve seen featuring prominently on their site:
Even EDR, an obvious ponzi, has retained a notional market cap at $10m over the last two years. So how bad does XAUR, a gold backed currency launched out of Slovenia, have to be to be worth 50% less now than it was in January 2017?
The website loads, the team proudly proclaim an audit of their reserves by PWC. And look at this:
Sarcasm aside, Xaurum at least looks like an actual active project, with an updated whitepaper released in November 2017 and several roadmap items completed for 2018. I’m not going to opine on the quality of the project or if it contributes much, but at least it’s still going. It’s depressing that we’re handing out lollipops to projects that a) aren’t flagrant scams and b) are still operating, but there we are.
Xaurum appears to have had an interesting couple of years, launching an ICO in mid 2017 called Xaurum Gamma which was ultimately shuttered in April 2018 due to lack of funding. This was an ICO intended to purchase six luxury villas on the Croatian island of Krk. It was then delisted by Bittrex in December 2017, a move which probably killed off its chances of a resurgence. Today it trades at $.04, down from the $0.1 it traded at as early as 2016 and substantially down from the $.3 at its mid 2017 ATH.
XAUR likely failed to benefit from the altcoin run of late ’17 because there were shinier, newer and more interesting opportunities out there — something which current altcoin holders convinced that their favourite holding will inevitably boom when the market comes back would be advised to pay heed to.
Ahh GameCredits. What a rollercoaster it has been. First launched in 2014, GAME went from a market cap of essentially nothing to a scarcely believable $426m in January. A 98.72% decrease later, it sits at $5m. The team also did an ICO in 2017 of a new project, MobileGo, which was intended to help fund marketing and branding of the GameCredit’s mobile store. MGO raised $53m through an ICO held jointly on both the Ethereum and Waves networks, making it one of the biggest ever at the time.
MGO looked like a cash grab at the time and events since have done little to change that appearance. Furthermore, GameCredits have seen more controversy than most:
Unlike the others on this list, I had not heard of Swiscoin. A Litecoin clone, the first thing I saw was that it had a premine of 1.5bn coins (out of a total supply of 3.1bn) for ‘marketing’. Hilariously, miners only generated 12 coins per block. I can’t possibly see the issue there.
Due to my inability to google properly, I also ended up analysing the similarly titled Swisscoin. Swiscoin, Swisscoin — they both look like ponzis anyway. And what do you know, they both are.
Swiscoin met a swift demise, with the perpetrators behind it arrested in August last year in Ukraine. Over $500,000 was confiscated in the arrest, along with weapons and ammunition.
Swiscoin is unsurprisingly now worthless.
Quite funnily, the Swiscoin team published a statement prior to its collapse in which they accused the Swisscoin team of trying to take advantage of their branding and confuse investors.
However, the seemingly unrelated Swisscoin appears to be still going, and makes some pretty funny claims. My personal favourite:
What did we learn
Don’t invest in scams
Take profits along the way
Your favourite alt is not special
The presence of so many thousands of competing alts with little to differentiate them means that no alt is guaranteed to follow a rising market. Alts are competing with one another for attention at this stage, given none of them have any real fundamentals
Just as none of the DApps from two years ago feature in the top 30 today, so too do I expect many of the protocols in the current top 30 to fail to appear come 2020
Seriously, are you sure it’s not a scam?
Note: Unsurprisingly I do not own any of the cryptoassets featured here (bar BTC and ETH)
Please follow me @flatoutcrypto. Coming next week; the worst graphs in crypto.