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DAPS: A Hidden Gem Or an Outright Scam?

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This is an opinion and is for informational purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.

Is their social media presence legit?

This is what we feel to be the most important issue to initially address.

We made a twitter poll on our official twitter account @cryptokrunch to find out what was the most popular privacy coin. Now, we actually have a secret to confess. We had hypothesized that by including the $DAPS cashtag we would receive a whole bunch of engagement and surprise surprise our twitter poll was absolutely bombarded by twitter accounts liking, commenting, retweeting and even a few new followers.

So who are these people exactly? And why are they all so positive and energetic about the daps cryptocurrency? The first comment is from a team member, Cor Blanksma. A very quick look and his account looks legit, it’s a team member after all. The next commenter is a person from brazil and he is urging us to check out the security audit made by @Red4SEC. That was actually a very useful comment and we did checkout the audit which was a bit concerning to us. Within the audit there were many critical errors that could have led to large scale blockchain issues; this is very concerning because of all the errors that were found in the report. The fact that the Daps team was not able to catch the bigger errors during an internal audit throws up red flags to the competence of the development team. We always knew that this project was more of a marketing play, rather than a tech play though. However, we do feel like they are making more strides than many thought on the development front, but their privacy solution has too many moving parts and is obviously not 100% understood internally due to all the issues in the security audit. This leads us to believe that DAPS is not a very good long term hold as a privacy coin. The current top privacy coin is XMR Monero and we are confident that the Monero team can develop solid code, they have proven themselves. Our top pick for the “next Monero” is a coin called Dero. The difference with Dero is that it will be able to provide private smart contracts, with the same level of privacy as Monero. Those are the only two privacy coins that we currently have our eyes on, Monero and Dero. A future article will be released on Dero.

Peepcoin: Does DAPS have some skeletons in the closet?

We just finished reading a comprehensive piece on the Peepcoin scam. We will briefly summarize our findings. We do personally recall Peepcoin and knew that Daps had many delays in their development history, but we did not realize how far back this went. It is said that the people behind Peepcoin pumped the price up and dumped their coins on the investors. This can be seen from the chart below.

Surprisingly the volume was up and over 1 million USD some days during that huge hype cycle, so there was enough volume for the insiders to sell it down very quickly and get out. We have decided to conclude this here and we do not recommend any of our readers to buy the Daps token or any projects that have any affiliation with Daps.

Further reading on the shady history of Daps/Peepcoin can be found here

Disclaimer: 
This is an opinion and is for informational purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.

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DERO: An investment Analysis- Our Top Privacy Coin Pick of 2019

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Disclaimer: 
This is an opinion and is for informational purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.

Dero claims to be “THE WORLD’S FASTEST ANONYMOUS BLOCKCHAIN”

This article will be outlining why we are very excited about the future of DERO. We will be providing evidence along the way about why we believe DERO to be a coin that has the potential to give an enormous return.

But first, we must advise everyone that this is not investment advice and only an opinion.

Spoiler: DERO is like XMR(Private) + ETH(Smart Contracts, but they are private on DERO) + IOTA/NANO (DAG based coins; Dero is a hybrid and utilizes a traditional blockchain alongside a DAG)

The Origin Story:

The Dero project was launched in December of 2017 consisting of a team of three developers. These 3 developers were able to accomplish a major milestone in March of 2018. This is when they proved themselves to be very talented. In March of 2018 the developers were able to rewrite the cryptonote protocol in Golang, a programming language that was invented by google. Now let’s break that accomplishment down a bit further.

What is cryptonote:

“CryptoNote is the technology that allows the creation of completely anonymous egalitarian cryptocurrencies. A number of our community members have been focused on research and development for more than a decade. We aim to promote the derived principles to influence the contemporary economic paradigm.”

https://cryptonote.org/inside

Some Crypto History:

Many of you will be familiar with this coin that uses the cryptonote protocol…. MONERO or XMR. Many may believe that Monero was the first coin that utilized this protocol, when this is indeed not true. Bytecoin or BCN was the original coin that released the cryptonote protocol. We only say this because knowing this type of history will give you a leg up on other investors. Knowing history will allow you to see the future trends in the space.

We believe this to be a great example displaying the importance the phrase “innovate or die”. Too many people are currently dead set on Monero being the privacy gold standard, forever. We want our readers to realize that the Bytecoin holders probably thought this was also true. The only real king in this cryptocurrency space is bitcoin. Every other cryptocurrency in the space will have to continually develop and push forward until they gain some type of large network effect. It’s arguable that Ethereum is at this level, but it is just a fact that the only cryptocurrency that can stay the same with minimal code updates is bitcoin.

The original cryptonote code was based on C++. The bytecoin team were the one’s who were behind this. The Monero developers took this code and made improvements like adding RingCT, they also maintained and fixed bugs much faster than bytecoin. The Dero developers initially forked the Monero code, then did a complete rewrite of the code in Golang and added many major changes like changing the core functionality of the blockchain itself by utilizing a DAG structure alongside of the normal blockchain structure. You can get a better visual of this structure here: http://stats.dero.io/
This is a big deal. The Dero devs added this structure to address the issue of the classic 51 percent attack. There has been attackers and even a bounty to try and 51% attack the network and no one has been successful. Solving this problem is very impressive, but might not be very sexy to speculators who do not care for computer science aspect, but one very sexy thing Dero has going for it is… PRIVATE SMART CONTRACTS. These are possible because of the Dero update called Stargate. There is currently no blockchain with working private smart contracts to our knowledge. Dero is ahead of the pack with their private smart contracts on testnet. The private smart contracts have been live and working on testnet since January 3, 2019. So it’s coming up with it’s 10th month. This is not concerning due to Stargate being a massive update. The Dero mainnet that includes the private smart contracts is set to be released in Q4 (OCT-DEC 2019).

Take a look here at the Dero github. I’d like to remind everyone that there are only 3 dero developers, while there are a total of 229 monero contributors. Now please tell us these Dero developers aren’t all geniuses. The fact that they were able able to complete the rewrite in 3 months time is absolutely insane. It leads us to believe that this is not the Dero developers first cryptocurrency project (This is us at CryptoKrunch speculating). Not only are the developers expert cryptographers, but they were also able to quickly implement/write the code without errors. There are not many people in the world with this skill set, or else many of these ICO projects would have shipped a working product after raising millions. Yes, Dero actually has had a working product for some time now. Dero has been on “mainnet” since July 29, 2018. Again, “Stargate” will be released in Q4 of 2019 and will include private smart contracts. Imagine what kinds of applications could be built. Well you don’t have to… here are some examples from the Dero smart contract competition. The winner made a trading card game as an app on top of the dero network. The second place winner made an app that acts as an anonymous marketplace where all users will use dero to transact and it will take place all on the dero network. This means that the marketplace could not be shutdown because it is run peer to peer, like the bitcoin network. You can see all of the DERO SC(smart contract) winners here. This link also displays the full in-depth audit done by slowmist, a company that has done audits for Binance, Huobi, Okex, Vechain, Ontology, and many more.

Who is Captain?

Another interesting thing about the Dero project is that there is so much mystery surrounding the project. I’ve looked back at their history and have seen some bad past management drama and many people calling the project a scam. Definitely many ups and downs have been had as far as management and communication has been concerned. This actually shows us many similarities between bytecoin and the dero project. Bytecoin did indeed have a very scammy association and did indeed turn out to be quite scammy. But let’s not forget that before “the bytecoin scam” was discovered, it was a very low cap crypto that shook the crypto-world with its bleeding edge tech. Bytecoin went from a 10 million marketcap to a 700 million marketcap in the span of 2 months from March to May of 2017. Then it later topped out at over a 2.8 billion in the last “bitcoin bubble”. This would be a 280x had you invested in bytecoin at a 10 million dollar marketcap. This 280x took a total of 9 months to transpire.

So wait a sec, who is Captain? Captain is the pseudonym for the lead developer of Dero. We personally like not knowing who the lead developer actually is. This is a privacy centric project after all; plus it gives us Satoshi Nakamoto vibes. Some similarities include great innovative technology, a premine, and a grand vision. When you see how Capatin talks in discord and you read the whitepaper, it makes you feel like something great is unfolding. So as for Captain’s identity, maybe he will reveal it at a later time, but as far as we’re concerned as long as the code keeps getting shipped, there’s not an issue with the developers being anonymous. Many people in suits gladly scammed tons of investors in the 2017 ICO mania, so knowing someones identity doesn’t really add much in this space. Note: The Dero development team is incentivized to keep shipping good code. They hold a premine of 2 million coins. Half to be spent on the project itself and half for the development team. Currently most of the coins are locked and will be unlocked incrementally, but regardless of all this, people need to understand that selling a million coins would require very high trading volume. This would mean that the project would be a success and that the price would be much higher than the current prices. The daily volume would need to be in the hundreds of millions to billions in daily volume traded for the developers to even have a chance at selling a significant portion of their coins. And at that point, the early investors could potentially be up something like 1000x. Plus after looking at all the work that the developers have put into the project, they don’t fit the profile of scammers, they could easily be getting paid high six to even seven figure tech jobs at the Google’s of the world. Plus they’ve now spent nearly two years developing this project.

Price Speculation: How far can it go?

From a technical analysis point of view, we’ve seen many compare the Dero accumulation cycle to that of Monero. The below charts are provided by Chris Crystal from the Dero discord.

During 2014-2016 there was much less media attention and overall understanding of the crypto markets, so it is possible that Dero’s cycle could happen a bit faster than Monero’s cycle.

Now obviously these price targets may seem crazy, but to be fair $1000 Dero puts the market cap at nearly 9 billion given the current circulating supply. Comparatively, Monero hit around 8 billion marketcap during it’s ride up in early 2018. Tron went to over a 16 billion dollar marketcap during the same cycle. The next bitcoin halving is also set to take place in May 2020, so you’d have to expect for there to be price action and media coverage leading up to it and even after the halving. We could write so much more about this project, but for the sake of brevity this concludes our Dero analysis.

Follow us on twitter @CryptoKrunch to stay up to date with our future work.

Disclaimer: 
This is an opinion and is for informational purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.

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Decentralized Stable Coins: Is Reserve Rights (RSR) the top dog in the space?

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This is an opinion and is for informational purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.

The importance of having stability in one’s currency is a universally understood fact. No one wants to wake up one day with 25% less buying power in their local currency. Bitcoin itself is still very volatile for day to day transactions like buying a cup of coffee, so having a cryptocurrency that is decentralized and has the stability of a major currency like the dollar would be a game changer for the space. Today we’re going to look at a few coins that have the goal to do just that. Imagine having the liquidity of tether (USDT), without undertaking risk of the parent company becoming insolvent. The cryptocurrency project that solves this stable coin problem on the protocol level will be worth billions. The projects I will be reviewing are Maker(MKR), Reserve Rights (RSR), BitCash(BITC), and Equilibria (XEQ). Let me know in the comments if you come across a similar stable coin project that you’d like me to review.

Why should you care?

Tether, aka USDT is a centralized stable coin with the parent company being iFinex. iFinex owns bitfinex. Now this article is not meant to hate on or bash bitfinex, but the fact of the matter is that 4 billion dollars is being entrusted to a centralized corporation to keep custody of people’s coins, assuming it is backed 1 to 1. Now tons of people have been calling for a tether/bitfinex collapse, but that’s not what I’m here to do. I’m calling for a stable coin revolution. True trustless stability. Four billion is being entrusted to a company like iFinex. Can you imagine how much money would be entrusted if a project was able to get this to work on the protocol level. A coin that is able to maintain and self balance all sorts of fiat currency pegs all while not having a giant counter party risk that comes with a centralized corporation like iFinex. This solution is on the level of “the next bitcoin” type of hype. Imagine being able to quickly exchange bitcoin for a stable coin backed by a multitude of fiat currencies and commodities. 

Ok, so if you’ve read this far, then it seems like we’re all on the same page that any project with this solution would be able to gain a huge userbase and a very large market cap. Now you may be asking is it possible to even invest in a stable coin? Short answer: yes, but you won’t be investing in the stable coin itself, you would be investing in the coin that acts as the collateral to stabilize the dollar or fiat based coin. Confusing? Good! If it were easy, everyone would do it BAYBEEE.

Maker (MKR)

Coin Basics: 

“Maker keeps Dai at $1 using a system of collateral and price feeds. This collateral is carefully managed by the MKR token holders”

I don’t want to go heavy into the technical side of Maker, because well frankly that would be a whole other article and it’s a lot to digest. Also, it’s not important as I believe that the Upside of the Maker token to be limited anyway. Although the usage of an ethereum smart contract to create the stable coin is very interesting.

Point of failure: The ethereum network and having a reliance on the price of ETH

Why I’m not betting on MKR price action:


The most glaring thing we see is that 3 digit price of $448, not a very attractive number to many retail investors. Secondly, Maker is on the verge of being “stale” so to speak. If you take a look at most alts, they are becoming stale. I believe most of the “last generation” alts are done and over with their main hype cycle. Maker had its chance and it peaked at $1600 in the massive 2017 Alt Season, less than 4x from the current prices. Not to mention the DAI token itself only has about 77 million tokens in distribution, so there is only minimal market penetration in the 2 years plus from inception. So for all these reasons I am not a buyer at these levels for Maker. Technology wise, MKR/DAI works and serves as a proof of concept to be improved upon.

Next up: Reserve (RSR)

I’d like to disclose that I am a buyer of this token, so naturally I will have some bias towards it. I found this coin while flipping through my twitter feed. This was around the time that MATIC had recently 10x-ed. 

Coin Basics: 

RSR = “The fluctuating protocol token that plays a role in stabilizing RSV and confers the cryptographic right to purchase excess Reserve tokens as the network grows.”

RSV = “The stable cryptocurrency that is economically and legally robust at any scale. Decentralized, 100% asset backed, and funded by top Silicon Valley investors”

Read the full whitepaper here. Pretty well written, though think I found one spelling mistake lol. It’s been a while since I read it.

The investors backing this project are so important that I consider them a big selling point of the project. Success brings more success. Two prominant investors in Reserve Rights are Sam Altman and Peter Thiel

Sam Altman, is the former president and current chairman at YCombinator. If you didn’t know, YCombinator is a top startup incubator that founders would kill to get into. They invested in airbnb — 31B evaluation, stripe, dropbox, reddit, and even coinbase! See more top YCombinator investments here.

“He is a personal investor in many companies, including Airbnb, Stripe, Reddit, Asana, Pinterest, Teespring, Zenefits, FarmLogs, Shoptiques, Instacart, Optimizely, Verbling, Soylent, Reserve, Vicarious, Clever, Notable PDF[27][28] and Change.org.”

And now for Peter Thiel. He is a cofounder of PayPal. Yes, that PayPal. Net worth of over 2.5 billion dollars. An interesting fact is that the original goal for PayPal was to make a product like Reserve, a global currency that does not have a reliance on banks and governments or as I’d like to call it, “The stable bitcoin” 

RSR Price Analysis: Cheap price = good?

Reserve Rights(RSR): Market Cap 10 million/ 24 hr Volume: 1.8 million

Yes cheap price is good, but that is not the sole deciding factor when analyzing crypto, it’s just nice to have. It’s certainly better to have a cheap coin that is unknown than an expensive coin that is unknown. 

I tend to look at market cap primarily and then the price of the coin. I like to do quick math in my head when evaluating new projects. Ask yourself, can this project realistically do a 100x. Like really, think how much capital it would take for it to theoretically hit that target. 10.8 million * 100 = 1080 Million or 1.08 billon market cap. (Note: This is not the amount of capital needed to reach a 1bn marketcap, just the marketcap it would be at if it were to 100x from these levels)

Then check to see if this is realistic in a bull cycle by refering back to the market caps in 2017 of the top projects. One billion is a realistic market cap for a project that can actually complete the original PayPal vision, that is certain. But the thing that we all must realize is that most of the projects will fail, so now you must pose a new question —  Is a 1 BN market cap a realistic target without the completion of the finished vision? And to that again I answer yes. The promise of something great almost always moves harder in price upwards than the final product anyway, remember that. That’s not to say to go and buy absolute shit, but it is to say that your crypto project picks do not need to all “make it”, but they all should at least give off the perception to buyers that they will make it. I hope all the projects I invest in “make it”, but I’m not holding out on them actually making it. 

How the RSR protocol works:

High Level overview of the Reserve Protocol

Full sized Image: Here

So now at a high level, why did I decide to buy this:

  1. Low Market Cap
  2. Excellent Concept/Idea
  3. Well known investors — Sam Altman + Peter Thiel + Coinbase Ventures
  4. There has been no “hype cycle” or massive run up in price
  5. Thorough Technical Whitepaper + belief in the team as a whole
  6. The team understanding that they should test the product in places that need it like Venezuela. (Places with hyperinflation)
  7. Raised nearly ~10 million dollars at IEO, so they have the cash needed to build quickly
  8. My belief that others will see these things that I see at a later point and buy at a higher price.

To expand on point 3: These guys are VCs (Venture Capitalists). Usually regular folks do not get to buy things that they are investing without paying an enormous premium (I.E. buying their picks when if/when it goes public on NYSE). Now you can, but know that they got a better deal at the private sale. I believe they are something like 4–6x up at these current prices. And if you were to just look at the CMC chart, you’d have no idea! To me that’s fine, they provide tons of value, so they deserve to be able to buy in at a better price, they’ve paid their dues. So yes, a big reason I bought is to tail smart VCs. 

Next up: BitCash (BITC)

Real quick look shows that this coin’s market cap is super low. I tend to not look at these coins with only a few hundred thousand in market cap, but I’ve seen this coin mentioned when reading discussions regarding stable coins. 

Coin Basics:

“By combining the advantages of cryptocurrency (speed, privacy, decentralization, low fees) with traditional fiat banking systems (transaction records, account names, electronic statements, accounting software integration) BitCash is the world’s first truly decentralized cryptocurrency designed to facilitate real world trade between consumers and merchants with a goal of becoming the world’s most used cryptocurrency”

BitCash is trying to make cryptocurrency easier to use in general. Plenty of projects have tried to do this and most have failed, but I definitely like what I see overall with BitCash considering how low of a market cap it is sitting at. Just by looking at their website we can see that their UI/UX is beautiful and that is rare in this space.

Overall though, this article is meant to focus on the best stable coin implementation. While BitCash may be a good potential lowcap play, I do not think their stable coin implementation can even be compared to what Reserve(RSR) is trying to accomplish. RSR is just much better positioned for that list of eight reasons above to become the dominant stable coin. Check out the BitCash stable coin implementation in their white-paper here.

Next up: Equilibria (XEQ)

Due to the rebranding, the coinmarketcap chart data is not present, so here is a chart from Tradeogre. It’s an interesting project that is looking to solve the decentralized stable coin problem. This project looks to be overall much more focused on just solving that problem. 

Here is the infographic from their white paper:


Conclusion:

After reviewing these various stable coin projects, the clear winner here is Reserve Protocol or RSR. Maker works, but is stale and not an attractive investment in terms of hype. Maker is also a preliminary iteration of something that I feel needs a bit more improvement, maybe call it the myspace?

 BITC and XEQ are microcaps with little liquidity, so even if you would like to invest in these coins, it is quite hard to invest a substantial amount. That’s not to say that you need a substantial amount of starting capital to make money in crypto. Also BITC does not seem like they are laser focused on solving the stable coin issue, their current implementation looks weak. XEQ seems like the implementation of their protocol is more serious than that of BITC, but still the RSR whitepaper looks much more solid, not to mention BITC and XEQ don’t have the 10 million in capital raised that RSR has… Plus the large development team and well known investors. So to me RSR is the clear winner. 

Disclaimer: 
This is an opinion and is for informational purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.

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