Quantifying risks associated with blockchain tokens. By how much will or will not equity backing protect the markets?

$611
Raised
18%
Ended on 9/15/17
Campaign Ended
  • $611
    pledged
  • 18%
    funded
  • Finished
    on 9/15/17

About This Project

The current blockchain token market is currently unsustainable and volatile. Quantifying the risks and providing a scientific analysis can result to a more sustainable way of getting the upside of the innovation while protecting supporters and/or private investors.

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What is the context of this research?

The cryptocurrency and blockchain space is very new especially in the area of research and academia. There are hardly any quantitative and scientific experiments on the behaviour of this market particularly. The space provides white papers focused on the technology but hardly any papers that focus on the market. It already has been observed that token holders are invested in the tokens rather than holding tokens to gain access to the product (misalignment). The market is creating a bubble therefore, a more sustainable model is needed by attaching value to fundamentals. To further back this claim, the project aims to provide quantitative proof to provide better recommendations for the market and work with regulators by keeping in mind the right balance.

What is the significance of this project?

The cryptocurrency market has reached an overall value of $100B dollars with companies raising millions of dollars in a few minutes. Aragon raised $25m, Qtum $15.5m, Bancor at $150m, Golem at $8.6m, Status at $250m with new ICO projects coming out 4x a week. The token market carries alot of potential in terms of reducing costs associated with security and eliminating middle men. Although it increases liquidity for a secondary markets, investors do not understand the risks involved. We want to fill in the gaps by providing quantitative analysis. Backing the tokens with fundamentals such as equity, which can create a linear compensation model for the team, and protection for investors create a less volatile environment for token holders.

What are the goals of the project?

Our mission is to provide recommendations for the current unsustainable token market backed by numbers. The goal is to be able to push for a better method of issuing blockchain tokens by backing it with equity. The project should prove that backing an issuance with fundamentals provides less volatility but provides the upside of issuing tokens on the blockchain.

Budget

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1. We need to use various tools and software. We also require datasets to backtest and simulate the current cryptocurrency market. $3,000

2. Report writing will cost $500. We will provide recommendations for all market players.

We wish to work with regulators (Bank of England and Financial Conduct Authority) and various institutions to make them aware of the risks and current behaviour associated with the blockchain token market. The potential is huge but the risks need to be taken into account. Our mission is to accelerate the benefits of the blockchain token market by responsibly quantifying and understanding the risks associated through a scientific analytical approach.

The more funds we raise the better since we can use it towards delivering a more extensive analysis and report due to software costs, tools, and data costs. We are determined to put together an analysis but we need help to pay for the tools and overhead costs (food, coffee, etc).

Endorsed by

This is an important and topical project. The team has exactly the right balance of academics & practitioners. Dr Nadarajah's work in econometrics is well known and respected and perfectly suited to lead the quantitative aspects.
This is a great project and the results will be of pivotal importance for the blockchain community. It will greatly benefit users of blockchain technology.
This project will be instrumental in bridging the gaps in our understanding of current ICO market and token financing backed up with equity. It will provide insights for regulators, investors and industry leaders regarding the Crypto Equity model, paving the way for a more transparent, liquid and less volatile crypto market.

Flag iconProject Timeline

The extrapolation, simulation, interpretation of data and report writing of findings will take a total of 4 months.

Jul 03, 2017

Project Launched

Sep 30, 2017

Extrapolate, simulate and interpret data points

Oct 30, 2017

Report and recommendations 

Meet the Team

Jeffrey Chu
Jeffrey Chu

Affiliates

University of Manchester
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Dr Stephen Chan
Dr Stephen Chan
EPSRC Doctoral prize Fellow

Affiliates

University of Manchester
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Beryl Chavez Li
Beryl Chavez Li
Founder | Blockchain Entrepreneur

Affiliates

Cambridge University Alumni | CapchainX | University of Manchester Alumni
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Dr Saralees Nadarajah
Dr Saralees Nadarajah
Senior Lecturer

Affiliates

University of Manchester
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Jeffrey Chu

PhD student in the School of Mathematics, University of Manchester. Research interests include statistics, economics, cryptocurrencies, and big data. Co-authored a publication on the statistical analysis of UK financial networks.

Google Scholar website: https://scholar.google.co.uk/c...


Dr Stephen Chan

EPSRC Doctoral prize Fellow, School of Mathematics, University of Manchester, UK. Main research area includes extreme value analysis and distribution theory in analysing financial commodities data, cryptocurrency data and the blockchain technologies. Co-developed and co-written an R package, entitled “VaRES”, for computing Value at Risk and Expected Shortfall.

Google Scholar website: https://scholar.google.co.uk/c...

Beryl Chavez Li

Prior to founding CapchainX, Beryl was an Entrepreneur In Residence at Coins.ph, a leading venture backed blockchain related payments startup in Asia. Her experience includes FX Quants at Blackrock, London backtesting trading algorithms with a team for a consulting project. She was involved in early stage VC tech investments with SeedAsia in Shanghai. Beryl was also Senior Consultant and Author of the Philippine Roadmap for Digital Startups, a framework to building the local startup ecosystem.

Dr Saralees Nadarajah

Saralees Nadarajah is a Senior Lecturer in the School of Mathematics, University of Manchester, UK. His research interests include financial market modeling, extreme value theory and distribution theory. He is an author/co-author of four books, and has over 700 refereed journal papers published or accepted, including a recent paper on models for cryptocurrencies. He has held positions in Florida, California, and Nebraska.

Google Scholar website: https://scholar.google.co.uk/c...

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Project Backers

  • 12Backers
  • 18%Funded
  • $611Total Donations
  • $50.92Average Donation
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