Valuing cryptocurrency projects is a notoriously difficult process. Given that traditional valuation models, like discounted cash flow (DCF) or book value analysis, are not necessarily applicable to most projects, it’s important for investors to find alternative means as a base for their investments.
While some might look to technical analysis as an alternative, the data largely shows that technical indicator events do not have strong predictive value for finding above average or negative returns. This is due to the high volatility of the cryptocurrency markets that are mainly driven by fundamentals.
Therefore, investors must search for unique metrics for evaluating blockchain projects. Currently, one of the best metrics for monitoring retail investor activity is social network data, including popular sources like Telegram and Reddit. Generally, investors look for projects with active social channels and well-run communities.
While social analytics are useful, the overall impact of this metric can be significantly convoluted and manipulated by ‘dead users’ from long-expired marketing pushes and bad actors that seek to manipulate prices for short-term gains.
Investors looking for additional metrics should consider tech development progress, a relatively unique feature of blockchain projects that is commonly measured via GitHub commit activity. Monitoring tech development activity is especially applicable, as most cryptocurrency projects have not yet released commercial products that can be evaluated. While GitHub commits are not a perfect indicator, they do offer an interesting insight into the growth and activity of a project’s core development.
Here are the top 10 cryptocurrency projects by total commits on GitHub over the last three months.
EOS (EOS) | $12.2B | $10.94B Mkt Cap | 2,245 GitHub Commits
Description: EOS is a decentralized operating system which can support industrial-scale decentralized applications. The project switched from the Ethereum blockchain to its own mainnet on June 2. (more)
Total Contributors: 100+
TRON (TRX) | $0.059 | $3.9B Mkt Cap | 2,227 GitHub Commits
Description: TRON is a cryptocurrency-based localized platform founded by the Tron Foundation, a Singapore-based non-profit organization headed by Justin Sun. TRX was originally developed as an ERC20 token on the Ethereum network but plans to launch a mainnet this June. The virtual currency seeks to build a free, content entertainment network that will use localized distributed storage networks to reduce the cost of sharing digital content. (more)
Total Contributors: 51
Nuls (NULS) | $3.71 | $148M Mkt Cap | 1,611 GitHub Commits
Description: NULS is a global blockchain open-source project which is a highly customizable modular blockchain infrastructure; it consists of a microkernel and functional modules. NULS provides smart contract, multi-chain mechanism and cross-chain consensus.
Total Contributors: 10
RChain (RHOC) | $1.36 | $488M Mkt Cap | 1,386 GitHub Commits
Description: RChain is a Turing-complete, Byzantine fault-tolerant blockchain platform, enabling developers to write concurrent and infinitely scalable decentralized applications.
Total Contributors: 38
0x (ZRX) | $1.26 | $668M Mkt Cap | 1,220 GitHub Commits
Description: 0x is an open protocol that facilitates the low-friction peer-to-peer exchange of ERC20 tokens on the Ethereum blockchain. The 0x Protocol is aiming to become a common infrastructure for decentralized applications (DApps), enabling them to access large public liquidity pools or even create their own. This system of available liquidity allows 0x to take the concept of a decentralized exchange a step further, as traditional DEXs are commonly illiquid, slow, expensive, and inoperable with one another. (more)
Total Contributors: 21
Zeusshield (ZSC) | $0.0166 | $19M Mkt Cap | 1,214 GitHub Commits
Description: Zeusshield uses the blockchain to apply trust management into insurance services, thus building up a new insurance ecosystem with the provision of precision marketing and intelligent insurance claims.
Total Contributors: 5
Olympus Labs (MOT) | $0.298 | $11M Mkt Cap | 1,100 GitHub Commits
Description: Olympus Labs is developing a financial ecosystem that defines the protocol for blockchain-based financial products. The Olympus ecosystem provides investors with a comprehensive financial marketplace filled with financial products, services, and applications that serve their investment needs.
Total Contributors: 9
Aion (AION) | $2.19 | $328M Mkt Cap | 950 GitHub Commits
Description: Aion is a multi-tier blockchain system designed to address unsolved questions of scalability, privacy, and interoperability in blockchain networks.
Total Contributors: 20
Lisk (LSK) | $9.04 | $962M Mkt Cap | 943 GitHub Commits
Total Contributors: 40
Skycoin (SKY) | $21.17 | $190M Mkt Cap | 927 GitHub Commits
Description: Skycoin is a decentralized internet project that rewards users Skycoins for distributing services across Skywire and supporting peer-to-peer networking. The testnet for the Skywire went live earlier this month and the project already has a fairly large network established for the Skywire, with over 2,300 official nodes and thousands of DIY nodes spread around the globe. The official nodes are running on custom hardware, called Skywire Miners, developed and sold by the Skycoin team. This hardware functions as a miner for Skycoins while acting as a specialized VPN. (more)
Total Contributors: 46
Valuing blockchain projects is no easy task, as traditional methods are not necessarily applicable. Therefore, the savvy investor must rely on unique metrics, including social following and development activity. The ten projects mentioned make up a nice short-list for anyone looking for a quick investment screen. Interestingly, most of these projects have completed or are anticipating upcoming testnet or mainnet launches.
With that said, it’s important to note that not all projects utilize GitHub and that this list should not be considered a definitive representation of the entire market. Additionally, the industry as a whole has a serious issue with actually applying economic principles to a majority of the products in development, so even projects with significant development activity might not necessarily be viable long-term.
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Disclaimer: The author(s) of this article may have a position in one or more of the securities mentioned above. This article is for informational purposes only and should not be taken as investment advice. Always conduct your own due diligence before making investments.