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ICO Analysis: Kyber.Network

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Kyber Network wants to enable Ethereum addresses to receive payments from any kind of blockchain. That’s the top deck view of what they intend to do, and perhaps their best offering. Although they appear to believe that the exchange nature of their platform is what is important – and that definitely adds value to their offering, as well. We should open by saying we applaud the academic and informed approached taken by the team behind Kyber.

Kyber lists “risk of centralization” as one of their chief motivating factors.

However, despite the decentralized and trustless natures of cryptocurrencies and crypto tokens, most of the trades happening on centralized exchanges are vulnerable to internal fraud and external hacking. This is an ongoing concern and a number of hacking incidents has been reported at various exchanges affecting thousands of users and loss of hundreds of million of dollars.

Another is a “lack of instant exchanges.” While not mentioning the several allegedly instant exchanges out there, the point Kyber focuses on is that most exchanges take too much time to execute transactions for the user. Instant trades would be preferable, but these are not possible for most centralized operations like ShapeShift.io or Changelly.com. Both of these efforts would quickly go bankrupt if double-spends were flagrantly allowed, and the only way to prevent against them is to require a certain number of confirmations for each different blockchain. With Bitcoin, for instance, ShapeShift requires at least one, sometimes two confirmations. They utilize a third-party service called BlockCypher to determine the quality of transactions. In a world where Kyber.Network and similar technologies are in play, ShapeShift, BlockCypher, and other centralized exchanges become obsolete for standard users.

Kyber Network Particpants

Kyber proposes an ecosystem of several layers, including the ability to exchange and make payments in cryptographic tokens in a universal fashion. They want to be able to conduct all the functions currently served by various centralized services in one-click – if a merchant only accepts a certain token, the user will simply pay the equivalent value in the tokens they do have. Rather than maintaining and regulating a global order book which determines exchange rates, Kyber prefers to offer a fair spread across the board and simply horde coins in order to serve orders. The management of these reserves is carried out by a class of network participants called reserve managers, who determine the exchange rates and must all agree on them.

Other roles in the system are mostly related to the maintenance of reserves. Before diving into them, we should note the other two of five roles there are to be played: users and “operators.” Operators are essentially the network miners, responsible for the ultimate officiating of information on the network.

The other three roles in the network are directly involved in the management of reserves. The first is the reserve operator, who takes liquidity from the second, the reserve contributor, who derives part of the network’s profits along with the operator and the third role, the reserve manager. Splitting these roles up among three different groups is presumably meant to ensure that all moving parts work correctly before rates are published and used in the network.

Unlike many cryptocurrency projects, the user needs to only send a transaction. Their transaction is immediately valid, while the reserve components of the network are responsible for moving the numbers around, and the network operator is responsible for ensuring all records make it to the top side of the network.

Kyber already has a working smart contract to fulfill the vision of the network. In the month of August, they intend to create a minimum viable product. The white paper does not mention specific rates that the network will derive for various types of transactions, but this is due to the trustless and decentralized nature of it. One concept that is covered is the idea of “dynamic reserves.” This means that several reserves of, for instance, Ether could exist, some managed by larger entities on the network for larger pairs and some being registered on the network by smaller interests in order to support the trading of less popular pairs. For example, if Aragon network were receiving less volume globally and they wanted to ensure some liquidity in their token, participants of their network could create reserve funds specifically for that pair. Exchange rates would be determined by the triumvirate of reserve personnel. This equates to a form of democracy in the exchange of the equities. Allowing for this all to happen on one chain is important – the multi-wallet functionality alone will make the Kyber Network attractive to veteran crypto traders who want to hold tokens outside of exchanges, everything from Bitcoin to Ripple.

Kyber Team

Everyone in the executive branch of the Kyber Network is a worthy opponent for the industry they intend to disrupt. Beginning with co-founder and CEO, Loi Luu, who is an active researcher in the cryptocurrency and smart contract space. Having someone with this sort of expertise, and immersion, is at the helm of an ICO, is refreshing. It might help explain why they want to be sure they are prepared before they actually do the token launch, which they’ve yet to fully announce.

Aside from Luu, we’ve got Israeli computer science PhD Yaron Velner, who is acting as CTO and is also a co-founder. As a researcher, Velner is a valuable addition – he has several Ethereum flaws to his credit, for which he was compensated under the bug bounty program. Critical infrastructure work of this kidn means he will know what to look for when hiring other talent later on.

The rest of the team appears formidable as well.

The Verdict

Being that we don’t know much about the token distribution or the cost of the tokens, nor what real utility they would play within the network (perhaps they would be used as the base token of exchange, giving them an inert form of value from the start), we have to rate this project purely on the idea.

The idea is there, although it is perhaps misleading to assert there is a lack of “instant” exchanges. For there are plenty, but there is no such thing as actually instant within the cryptocurrency realm of things.

Growth Potential

We believe that several options will emerge over time which will totally subvert the need for centralized exchanges, and that the best of these will be very prosperous endeavors indeed. For token holders to experience this growth, however, the token has to be somehow tied to it. We would prefer to see more tokens which directly compensate their holders with profits from the operations of the company which offered them, rather than speculation thereupon. This is a better, more equitable way for people to comfortably invest – in order to realize their own value, at that point, the companies must perform. If this is the case with Kyber.Network, we can award them an extra point on top of the overall rating which follows.

In terms of growth regardless of the above, we can see that these types of technologies are bound to take off. Kyber intends to release a minimum viable product very soon, and this will be an encouraging sight – more people will take interest in the project when it is demonstrably workable. Being able to send and receive any token at all via a single network, “instantly,” is a great plus. For this novelty and its potential to disrupt the entire exchange industry – being that anyone can really play a role in the ecosystem – we lend 7 points off the top.

Risk

We believe there will be many efforts at creating decentralized networks on which all chains can trade. These efforts will not stop multiplying, and so the market will soon be split. Kyber has a heavy onboard cost in terms of technical investment, and one must remain invested to recoup time invested. As such, we must deduct a full 1.5 points for the possibility that among a sea of competitors, Kyber will just not attract enough people to create the sort of volume that will be necessary across global pairs. For their network to truly function and prosper, they require a lot of volume and activity.

Disposition

All the above outlined, we have a simple equation with Kyber – 7 – 1.5 = 5.5.

Don’t forget the above note wherein we can add a full point if token holders are allowed to profit from the token once it is released. That would be a valuable addition, and give the token an actual value – people would be willing to pay more up front for tokens which promise later revenues. This is the ideal situation and we think ICOs will figure this out more and more moving forward.

Investment Details

Unfortunately, there are no details yet on the Kyber ICO. There will be this year, however, and you can stay tuned with them by subscribing to their mailing list or following them on social media. This is definitely one to watch, and as they engage with the community more, they may improve various aspects, only increasing their potential for being a profitable investment.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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5 stars on average, based on 2 rated postsP. H. Madore has covered the cryptocurrency beat over the course of hundreds of articles for Hacked's sister site, CryptoCoinsNews, as well as some of her competitors. He is a major contributing developer to the Woodcoin project, and has made technical contributions on a number of other cryptocurrency projects. In spare time, he recently began a more personalized, weekly newsletter at http://ico.phm.link




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Analysis

Black Friday: How to Capitalize on It

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By Dmitriy Gurkovskiy, Chief Analyst at RoboMarkets

The most interesting event this month in the US is the famous Black Friday, the day of large discounts, which is on Nov 23. On this day, Americans make 45% of all their annual purchases. The US economy is doing well compared to other countries, with the Fed hiking the rates in order to cool the markets down. The unemployment rate is at its record lows, which means people have money, and there’s going to be much hype about the Black Friday as usual. With this scenario, a few companies may show great potential during Q4. First, there’s e-commerce that is a very strong competition against offline stores. Amazon (NASDAQ: AMZN) is the leader here, with the market cap of $1T. In Q3, Amazon made a record high when it comes to quarterly earnings. However, the chart shows it is Q4 that is going to be the most profitable for the company.

Unluckily, after the Q3 report, the price was unable to reach new highs. Investors’ expectations were higher than the data that came out, which led to the share price going down. However, Amazon did make profit, and there’s a good trend in it. Furthermore, Amazon management expects to book the record profit in Q4 2018. In October, we analyzed Amazon and said the company stock is going to trade at around $1,400. It is now trading at its low at $1,476, however, and is above the 200-day SMA. When the price goes below $1,700, the volumes get much higher, according to the chart. Thus, this may be the support the price may start recovering from.

If the earnings expectations are met, Amazon may well rise above the round number of $2,000. Another large company that may get nice profits is eBay (NASDAQ: EBAY), which is mostly centered around e-commerce, too. The profits are good here, while the stock price leaves much to be desired.

Still, eBay incomes are rising quarter to quarter. According to the expectations, Q4 is going to be the most profitable in the recent few years.

Over 2018, eBay stock went down by nearly 30%. Perhaps, the reason for that is the increasing debt, with the debt to equity ratio now being 1.11, while, for Amazon, it is just 0.63. Technically, the stock went down till November last year, too, while after the Q4 report it traded at its highs. This time, the stock looks somewhat weaker than before, and may only reach $36 or so.

Walmart, an offline store chain, may also be included into this list, as this company is sure to get good profits thanks to Black Friday sales. Nevertheless, while eBay and Amazon shares corrected before Q4, Walmart is rising and is trying to break out its record highs made a year ago. Walmart earnings, like internet giants’ ones, are sure to be sensitive to the sales before Xmas.

The company reports its earnings on Thursday, and they are expected higher than the same quarter last year. The income is visibly growing up, and the record highs for Q4 earnings expectations are quite logical. Walmart has been recently going up thanks to large hedge funds positions, with around 52 funds now including this stock into their portfolios.

Technically, as said before, the stock is quite strong. The price is currently above the 200-day SMA, showing good growth and ready to hit new record highs. As for the entry, it’s hard to determine the risk. The nearest support levels are $100 and $90, and once the price reaches either, it could be a good entry point for the next few months.

 

Disclaimer

Any predictions contained herein are based on the authors’ particular opinion. This analysis shall not be treated as trading advice. RoboMarkets shall not be held liable for the results of the trades arising from relying upon trading recommendations and reviews contained herein.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.7 stars on average, based on 17 rated postsHaving majored in both Social Psychology and Economics, I went on to continue my education in post graduate. Later I worked as a team lead of a tech and fundamental analysis lab in the Applied System Analysis Research Institute. This helped me to acquire all necessary skills and experience to become a successful trader and analyst, as well as a portfolio manager in an investment company. I'm a pro in the financial field and the author of articles for various international media. I also hold the position of Chief Analyst at RoboMarkets.




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Altcoins

Zcash Price Analysis: ZEC/USD Penetrating Vital Resistance, Which is Key for Greater Upside

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  • Zcash has remained elevated over the past few days, as a result of potential speculation across the social media space regarding a Coinbase listing.
  • ZEC/USD bulls must break down supply area heading into $140, to unlock chunky buying pressure.

ZEC/USD bulls have been pressing hard to break above the very stubborn resistance, which is seen just above the $140 price territory. For going on six sessions now, the price has failed to clear the above supply area. It is seen tracking from $138 up to $140. ZEC/USD has not been above this territory since 28th September. There has been much penetration of this, which very well could suggest a strong breakout to come.

Zcash Speculation

Efforts by Coinbase to expand its offering has raised speculation that ZEC may be due for consideration. As recently reported, the largest U.S exchange, announced the listing of Basic Attention Token (BAT) on its trading platform and apps. Elsewhere, they opened the doors for trading 0x (ZRX), which was the first ERC-20 token to have been listed on the platform. Given these moves, there has been continued speculation across the social media space regarding possible listing of Zcash along with the likes of Cardano (ADA), and Stellar (XLM).

Technical Review – ZEC/USD

ZEC/USD daily chart

The ZEC/USD bulls are having a hard time, as their rallies continue to be short-lived due to repetitive failure to breach key resistance. On each occasion the price has entered the detailed supply area, heading into $140, it has been sent back south by some force. It could very well be that ZEC/USD is moving within consolidation mode, after the chunky recent surge. The bulls had seen a decent run from October 31st. Gains seen within this period were a chunky 20%.

Support Levels

Looking to the downside, a decent level of daily support can be eyed just sub-$128. During the current form of consolidation eyed, this area has proven to be of use. Further south, eyes would be back on the breached pennant pattern. This is where ZEC/USD began its most recent forceful upside trend. The price had managed to catch some bidding at the lower part of the pattern to then see a breakout to the upside. A potential pullback to the pennant could see the price around $118.

Upside Targets

Should the market bulls manage to gather enough upside momentum, eyes will be on another retest of the supply heading into $140. A breach above will likely see the price heading for another supply zone, observed at $145. ZEC/USD last traded here on 28th September, before resuming its downward trend. Further north, the highs seen early September within the $160 territory. Lastly, any move above here, could likely see some strong buying pressure, with a fast move back into $200.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 49 rated postsKen has over 8 years exposure to the financial markets. During a large part of his career, he worked as an analyst, covering a variety of asset classes; forex, fixed income, commodities, equities and cryptocurrencies. Ken has gone on to become a regular contributor across several large news and analysis outlets.




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Analysis

Pre-Market Analysis And Chartbook: Trade Deal Hope Boost Risk Assets as Pound Surges

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Tuesday Market Snapshot

Asset Current Value Daily Change
S&P 500 2,737 0.27%
DAX 30 11,381 0.49%
WTI Crude Oil 59.10 0.41%
GOLD 1,203 0.20%
Bitcoin 6,291 -0.42%
EUR/USD 1.1265 0.42%

After yesterday’s equity selloff and Dollar rally today we are seeing a counter-trend move in most asset classes thanks to the reports regarding some progress in the US-China trade talks. The optimism has been sparked by the planned US visit by the main Chinese negotiator which points to a renewed interest on the Chinese side that withdrew from the talks.

Stocks are slightly higher before the US open, but the short-term uptrend that carried the major indices significantly above the October lows seems to be broken, with especially the Nasdaq being set for a re-test as soon as this week. Currencies and commodities are also very active today, and as volatility is increasing across asset classes, a busy US session is likely.

GBP/USD, 4-Hour Chart Analysis

The Pound continues to be the most volatile major currency, even as the Dollar has been in the center of attention since the Fed meeting, with the looming Brexit deadlines increasing the tension in the market of the GBP. Interestingly, the Euro has been underperforming the Pound lately, due to the Italy related worries, and today the Pound is significantly higher against all of its major peers.

The Pound was also boosted by the British Employment Report, as the healthy wage growth figure outweighed the weaker than expected Unemployment Rate, at least as far as the forex markets are concerned. The GBP/USD pair jumped higher off the key 1.2850 support/resistance level that has been “in play” several times in the last few months, but the broader downtrend remains unharmed by today’s move.

S&P 500 Futures, 4-Hour Chart Analysis

The technical troubles are mounting on Wall Street, with the key benchmarks all turning sharply lower off last week’s highs. The Dow, which has been the strongest index this month also broke its rising trendline and dipped below several short-term support levels, similarly to the slightly weaker S&P 500 and the lagging Nasdaq.

The S&P 500 is now testing the key support zone near 2750, and given the broader bearish setup, we expect the large-cap index to revisit the October low in the coming weeks, with even an accelerating selloff being in the cards. The weak market internals are also pointing to further troubles for stock bulls, and we still wouldn’t buy the dip here.

Emerging Market Weakness Casts a Shadow on Risk Assets

EEM (Emerging Markets ETF), 4-Hour Chart Analysis

While the main risk on currencies is higher today, looking at the weakest links of the October risk-rout, emerging market and European stocks, the picture is not pretty. We looked at the DAX’s wounded chart yesterday, and the most important emerging market ETF also shows signs of distress, with a test of the bear market low being seemingly inevitable in the near future, especially given the broad weakness across the developed markets as well.

Copper Futures, 4-Hour Chart Analysis

Commodities are mixed today amid the Chinese optimism, with the increasing volatility in oil still being the most interesting trend in the segment. The WTI contract fell back below the $60 level after yesterday’s initial bounce, and although it only hit a marginal new low today, and we still expect a larger bounce in the coming days in oil, sellers are still in control of the market.

Gold dipped below $1200 for the first time in a month, as the precious metal failed to reverse last week’s breakdown, threatening with a test of the $1180 support level. Copper avoided a new swing low below the $2.65 level, for now, and the metal is still within its broad consolidation pattern, thanks to the renewed trade-deal optimism, with the broader downtrend clearly being intact.

ChartBook

Major Stock Indices

Nasdaq 100 Futures, 4-Hour Chart Analysis

Dow 30 Futures, 4-Hour Chart Analysis

VIX (US Volatility Index), 4-Hour Chart Analysis

DAX 30 Index CFD, 4-Hour Chart Analysis

FTSE 100 Index CFD, 4-Hour Chart Analysis

EuroStoxx50 Index CFD, 4-Hour Chart Analysis

Nikkei 225 Futures, 4-Hour Chart Analysis

Shanghai Composite Index CFD, 4-Hour Chart Analysis

Forex

EUR/USD, 4-Hour Chart Analysis

USD/JPY, 4-Hour Chart Analysis

EUR/GBP, 4-Hour Chart Analysis

AUD/USD, 4-Hour Chart Analysis

Commodities

WTI Crude Oil, 4-Hour Chart Analysis

Gold Futures, 4-Hour Chart Analysis

Featured image from Shutterstock

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.7 stars on average, based on 393 rated postsTrader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.




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