Editorials

I scored 1300 cryptocurrencies with the GDAX Asset Framework. Here’s who I think will be listed on GDAX.

In the Fall of 2017, the Coinbase owned exchange GDAX, published what they called the “GDAX Digital Asset Framework” as a method for assessing the suitability of blockchain based digital assets for addition to their exchange.

They also announced that they would be adding their first round of new digital assets to the exchange in early 2018.

This, of course, lead to overwhelming speculation from crypto traders who were anxiously trying to identify which coins would be listed so they could buy them ahead of time for a profit.

But, most people haven’t taken the time to read the GDAX framework, or understand half the coins they’re investing in. So, I decided the only logical thing to do was to do it myself and publish the data on my predictions.

My Methodology:

  1. I started out with just over 1300 assets, which included every non-hardfork and dumped them into a spreadsheet.
  2. Then I took the GDAX framework and gave every clause within it a column in that spreadsheet and a weighted score. Since I had to come up with the weighting myself, and the score, I used the “most critical interpretation” method of scoring where unless something was provably true, today, in the current conditions then it would fail that marking.
  3. I cut out most that had a market cap lower than $1M, were not listed on any exchanges, were broken/unmineable, or that violated US security law. This brought me down to around 700 potential candidates.
  4. Then I removed any coin that had an under-qualified team, had minimal online presence, had posted no updates since their launch, or didn’t have some level of published source code and research. This brought me down to the more manageable 483 assets which received full reviews.
  5. I then spent all my spare time over roughly 3 weeks, digging through their websites, whitepapers, founders backgrounds, community updates, and scoring their trade volume.
  6. I added all this data to my big ugly spreadsheet:

A zoomed out snapshot of the color coded scoring spreadsheet my assets.

By the time I made it through 132 assets, I had realized that there was a number of criteria that when strung together represented an auto fail for the coin/token, and so from asset 132 onwards I started reviewing only those criteria.

After reaching asset #274 on my list, another set of criteria had dropped to the point that most assets were auto-failing. In fact, only 3 assets from #274 -> #400 on my list made it to my eligibility stage.

The “Eligible” Assets:

I had now managed to filter my list down to the point of only having assets who met the base criteria for inclusion based on the technical criteria but I still had too many to work with. My target was to find the 10 assets most likely to be in the first batch, so I added a few other weighted criteria:

  • Ease of understanding.
  • Is it launched?
  • Partnerships?
  • Brand trust?
  • Longevity.

With these, I went back and re-evaluated the coins at this phase, I also got far more critical of the subjective criteria in the GDAX list.

In the end I had a final list of high eligibility assets.

 

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While all of these assets meet the high level criteria to be included, it seems unlikely that GDAX would have such a large roll-out to start. From an investing perspective it is also likely to overly dilute my portfolio if I try and put into all of these.  I think that about 70% of these assets have a good chance at being listed on GDAX at somepoint, but not all in the first batch.

So now we move on to the next step to get my top predictions.

The Final Set:

Once I had my eligible assets, I added a few more criteria:

  • The network should be launched. If the network is not launched, then the company must have strong brand trust and a proven track-record that outweighs that.
  • The coin should have met the acceptable market volume and velocity for at least the past 6 months to be in the first batch – as Coinbase’s team would have been planning this for a while.
  • Bonus points are given to groups with formal foundations, business teams or partnerships and common investors.

 

After that I scored it out and came up with my top list:

The Top 3:

1. Ripple

Ripple is a leader in the medium of exchange category. Their professional foundation and team has lead to some great enterprise partnerships in the finance sector. They were the first blockchain ever used in a commercial banking application by Fidor Bank.

Pros:

  • Strong historical performance.
  • Professional large scale team.
  • Unique and established use cases.
  • Enterprise/Financial partnerships.

Cons:

  • Slightly more centralized platform.

 

2. Monero:

Monero is currently a leader in the privacy coin market and has recently made a great deal of headway with javascript mining integrations.

I think it is a very strong contender for one of these slots. My only concerns would be it’s recently growth doesn’t point to stability and it may have some KYC implications due to anonymous money sources, but that can be rectified from a compliance stand point by asking for additional customer information.

Pros:

  • Unique value proposition.
  • Strong track record.
  • More equality in the mining process.
  • Privacy value.
  • Common onboarding for users via browser mining.

Cons:

  • Short market volume timeline.
  • No finite cap.
  • Anonymous team.

3. Stellar Lumens:

Stellar is a quasi-Ripple competitor that is smaller in terms of marketcap and less formal in terms of company operation. They’ve built their own custom payment networks and shown a great track record of delivering a useful blockchain. (I’m kicking myself for selling off all my XLM last year).

Pros:

  • Strong historical performance.
  • Professional team with unique blockchain.
  • Extensive partnerships
  • Large network of vendors for use cases.

Cons:

  • Slightly more centralized platform.

The Alternates (#4 – #10):

4. ZCash:

A privacy focused cryptocurrency with a fairly steady price which has helped it gain trade popularity.

5. OmsieGo:

OmsieGo is the first of the new breed of tokens that I expect has a good shot at being listed on GDAX. Their execution has lead to strong partnerships and actual use cases for the token. The only draw back here is the regional value bias as the token will have use cases primarily in the Asian markets.

6. BAT:

A strong performing early ICO in the token space, the Basic Attention Token ties into the Brave browser (founded by the former Mozilla CEO) and is used to by advertising in their network/support web publishers. Given the experienced founder and early traction of this token, and the practical use case I think it’s a shoe in.

7. SiaCoin:

I’m not sure what GDAX’s policy will be on listing multiple coins with the same purpose. There are a few different options in the blockchain storage space. However, SiaCoin is the most practical as of today. I think the only way that Sia wouldn’t make the cut is if GDAX decides to back single coins in each category as they’ll likely go with Filecoin for storage.

8. Steem:

Steem is a unique blockchain based on the BitShares protocol. I was tempted to put BitShares in this slot but I think Steem would beat it to the punch as it has a very clear purpose and a user demand due to that purpose. It also has a large community that very strongly supports the Steem project and would be a great way for GDAX to adopt users.

9. Kin:

Kik’s Kin token presents an opportunity to onboard 300M mainstream US Millennial users into using cryptocurrencies across an ecosystem of apps. This is the only pre-launch token to make my top ten – it scored slightly outside the top ten in terms of all the technical criteria but when you factor in Kik’s ability to deliver, the common investor and the fact that no exchange in their right mind could pass up the opportunity to be the first buying outlet for 300M new crypto users, then I think it’s an obvious bet.

10. Dash:

Dash rounds out the bottom of my top ten list. It actually scores really high on the technicians, but it’s faced some criticisms over centralization of power and distribution of the asset. It makes up for those by having an involved community, a great development team, a clear consensys process and tons of merchant partners that give dash clear use cases.

Honorable Mention – Unikon Gold:

Unikon Gold gets an honorable mention on my list. It scored extremely well in the technicals despite its low market cap and early progress. Had this discussion been happening 8 – 12 months from now I think it could have been a serious contender.

Too Early:

The following coins would have likely displaced some of the top ten list had they not been pre-launch/so early in their launch. I think we’ll see them over the next 36 – 48 months if they continue to have promising developments:

  1. EOS
  2. NEM
  3. QTUM
  4. Quantstamp
  5. Kyber Network
  6. Raiden Network
  7. Tierion
  8. ChainLink
  9. Request Network
  10. Blockstack
  11. FileCoin

Long-Shots/Underdogs for High Risk Investors:

For sake of investing you don’t always want to invest in the shoe-in, because usually the expectation of something like a listing is already priced-in. If I was to pick 3-4 underdogs from this list who had low market caps and met the basic requirements I’d go for:

  1. Numeraire – Quant investing contest system for data scientists to help train hedge-funds. Same investor as Coinbase.
  2. Po.et – Blockchain based licensing for creators. Backed by a number of big names in the media business, currently on alpha net.
  3. Enigma – Secondary chain layer that aims to help speed up any blockchain through off-chain transactions. Sponsored by MIT included advisors who previously worked at Kraken and Circle.
  4. Vertcoin – Great development, strong community, recent high level of growth, ASIC resistant coin.

 

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Disclaimers/Legal:
Disclaimer: The information in this blog post should not be considered financial or investment advice. Investing cryptocurrencies is risky. You should never invest more than you can afford to lose. Consult with both legal and tax professionals to understand the implications of cryptocurrency in your jurisdiction before engaging with cryptocurrencies. In regards to our fair disclosure policy, note that the author of this article voluntarily agrees not to exercise any related positions in any of the tokens or coins mentioned in this article in the next 72 hours.

Non-Endorsement: The information in this post should not also be considered to be an endorsement of any company, brand, currency or asset. This scoring is based on my interpretation of a third-party scoring framework.

Earnings Disclosure: This post contains hyperlinks which lead to third-party websites where users can purchase various cryptocurrencies and tokens. For some of these sites I earn an affiliate revenue commission when tokens are traded. This helps to support this site.

Disclosure: In any article I write, I like to include my potential biases. By acknowledging these it allows me to better self identify bias in my writing and minimize it, as well as let the user know how to interpret each piece. For this articles my biases, related to any coin analyzed, include:

  • Dogecoin: I was a former moderator of the /r/Dogecoin community and an early holder of Dogecoin. I currently hold a small position.
  • BAT: I know the team at Brave fairly well, I hold a small position in BAT and I am also a verified Brave Publisher.
  • Numeraire: I am a registered Numeraire user. I do not actively compete or hold a position. The company I work for has a common investor with Numeraire.
  • Steem: I am registered on Steem. I hold a small position there due to my user account.
  • Kin: I know the Kin executive team fairly well and have had many conversations with them. I hold a position in Kin. The company I work for has a common investor with Kik, the parent company of Kin. I have no inside knowledge that would benefit me in anyway in relation to the price of Kin, or its potential listing.
  • Blockstack: The company I work for has a common investor with Blockstack. While I do not hold a position in blockstack, I hold a voucher allowing me to exercise a position in the future at the ICO price. These were available to the public during the ICO.
  • Filecoin: The company I work for has a common investor with the parent company for Filecoin. I do not hold a position.
  • Unikoin Gold: I took part in their ICO and own a small position of Unikoin Gold.
  • SiaCoin: I was an early miner of SiaCoin. I hold a small position.
  • OmsieGo: I have fractional amounts of OMG tokens from their airdrop.
  • Coinbase/GDAX: The company I work for shares a common investor with Coinbase/GDAX. I have no insider knowledge that would help me with this assessment in any manner

 

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