Value Beyond Speculation - Why Quant has the potential to be an incredible long-term investment
Disclaimer: Please note this article was accurate to the best of my knowledge at the time of writing. I have not been following developments or invested in Quant for a while now and this information should not be used as a reference source to make any investment decisions (as is the case with all my articles). The Quant team have removed multiple references surrounding tokenomics of the QNT token, including the original tokenomics paper, the Overledger Network for community paper (which you can find an copy on a 3rd party side here ) and archive of removal of medium articles written by Quant surrounding tokenomics can be found here). For clarification around any topics you should seek clarification from other sources rather than rely on any information found in this article.
Blockchain is going to completely revolutionize most industries and even the Internet itself. We are presented with an incredible opportunity to invest in projects at an early stage that have the potential to become the next Apple, Microsoft, Amazon, and Google’s of the world. Whilst there are many great projects (and a lot of awful ones as well), there are only a small number which have the tokenomics to match.
The two projects I will cover in this mini-series are Avalanche (AVAX) and Quant (QNT), both projects have the potential to be an incredible store of value and an extremely rewarding long-term investment. You can read the Avalanche article here. In this article I will be looking at Quant (QNT). These are my views and should not be considered financial advice. I strongly urge everyone to not waste this opportunity and spend time doing your own research into any project you invest in.
This article is split into three parts: (Click on the links below to jump to the relevant section)
1. Token Value beyond Speculation
A look at EY’s formula to derive the valuation of crypto assets and discuss how value can be calculated based on fundamentals — Total Addressable Market Size / Obtainable Market Share for the Product / Service, Token Velocity, Token Supply Metrics, QNT Token Distribution.
2. Token Utility
Details of the QNT Token Utility — Licenses, Overledger Network, Gateways, Platform Fees, Add-On Services, Users licenses, Community Treasury with Layer 2 Payment Channels, Consumption Fees, Marketplaces, Open Source Connectors, Combine any Blockchain and API based system to create new products, Multi-Chain Oracles, Gateway Staking, Signing of Transactions and more.
3. Why Quant has the potential to be an incredible long-term investment
Summary of why Quant has the potential to be an incredible long-term investment with links to twitter threads for more info as well as related articles. Topics covered include — Market Size Quant is Targeting, Benefits of interoperability compared to other platforms, Partnerships, Meetings and Discussions with Central Banks, Governments, Importance of SIA, Globally recognised Standards, Network of Networks, Building the foundation for a new Internet which is secure and inherently trustworthy, Collab with MIT, US Gov, Intel, Juniper Networks, Payment Companies and Telecoms to create Open Digital Asset Protocol, Token Velocity, Token Supply, The Team, Sustainable Business Model and a Summary.
We don’t look at the market and the hype machines or try to play that route,” he explained. “We’re taking it back to the fundamentals. There are companies that are executing with revenue and adoption of their ecosystems, and we are actively seeking them out. — Alpha Sigma Capital (ASC) about their investment in Quant.
Token Value beyond Speculation
Speculation is currently the main driving force for valuation of all tokens and it will continue to play its role in the future, but without fundamentals driving demand for the token to back that speculation up, at some point reality will kick in and the price will correct. The larger the disparity between speculation and fundamentals the larger the risk for token holders.
EY’s formula to derive the valuation of crypto assets
EY, one of the “big four” accounting firms released a paper looking at valuation of crypto assets based on the Quantity Theory of Money which you can read here. The Quantity Theory of Money traces its origins back to the 16th-century writings of Nicolaus Copernicus and Jean Bodin. It was more formally developed by David Hume and Richard Cantillon in the 18th century, before being restated in its recognizable, mathematical form by Alfred Marshall and Irving Fisher around the turn of the 20th century.
The market size, token velocity and supply metrics all play a key role in determining the value of a project. The larger the market size and smaller the token velocity and supply, the higher the price of the token will be. Quant excels in each of these to provide an incredible value opportunity for the QNT token which I will discuss throughout this article.
Total Addressable Market Size / Obtainable Market Share for the Product / Service
How big is the total market size that is obtainable by the product / service? Is it very niche? or can be used across many verticals? It’s important to only factor in scenarios where the token is actually used though. Countless projects you see people mentioning large enterprises that may be associated with the project, but in the vast majority of cases the token is not needed by enterprises, and thus adds no value to the token other than short-term speculation. The larger the market size the higher the demand and potential price of the token.
Token velocity refers to the number of times a token changes hands within a certain period. Tokens with low velocity will create true value. On the other hand, tokens with high velocity and high speculation, both destroy long-term appreciation and elevate risk for token holders.
Typically, transaction fees are paid in the token and then sold back to the market shortly after to pay for running costs, as there is little reason for them to be held. Settlement tokens have a high velocity, where they are bought and then sold within a very short amount of time (sometimes within seconds). This makes it more difficult to accrue value compared to tokens which have lock ups / sinks and a reducing circulating supply. There must be a reason for token holders to maintain token ownership for an extended period.
As a simplified scenario if 10 users each buy 1 token from an exchange and hold it for a month, this will result in higher price appreciation compared to a token with high velocity, where a user purchases a token from the exchange and then the same token is resold to the other 9 users. Whilst it’s still possible to accrue value with a high velocity token, you may need 1,000 users to purchase a token within a month to have the same effect of having 10 tokens off the exchange at the same time.
Token Supply Metrics
We have all heard about the Fed printing trillions in the current crisis, with M2 calculation of money supply increasing by just over 20% this year alone. Over the years this has led to the dilution of the purchasing power of the dollar.
It’s not uncommon for many projects for supply to increase by 10 % every year, regardless of whether there is a crisis or not. Polkadot for example has 10% yearly inflation, Cosmos has between 7 and 20% inflation, and all without a maximum supply, with the supply increasing every year, leading to further dilution of existing token holders. The difference between total supply and max supply is that total supply represents the total supply of currently minted tokens, whereas the max supply is the maximum number of tokens there will ever be.
As an example, if a non-fixed cap has a current total supply of 1 Billion, and a token holder owns 10% of the supply (100 million tokens), with a 5% yearly inflation rate, after 50 years the total supply will be 11.4 Billion, and instead of owning 10% of the supply they would own just 0.9% . With a 10% yearly inflation rate, the total supply would be 117.3 Billion and they would own just 0.009%. With QNT there will never be more than 14.6 million tokens and no dilution.
Clearly fixed capped supply tokens are preferred to avoid the continuous dilution of the token. A decreasing circulating supply through lock ups / burning of tokens will have further positive effects on price. A combination of an increase in demand and a reduction in supply, will lead to a larger increase in price.
The QNT Token
QNT is an ERC20 token on the Ethereum Blockchain. Whilst it is currently on the Ethereum blockchain, it is blockchain agnostic, so can easily swap to any other blockchain. Ethereum was chosen due to it being the mostly widely used blockchain with well-established integration for wallets and Exchanges.
The team completed a burn of 9,545,765.950989192 QNT due to the ICO not selling out in difficult market conditions at the time and fewer tokens were minted. The details of which can be located here as well as detailing why the amount shows different on Etherscan (although there is also a notice on Etherscan as well to inform them of the new total)
QNT has 2/3 the supply of Bitcoin and unlike many other tokens (even including Bitcoin, until it reaches the 21 million in circulation), there will never be any more tokens minted, with the supply being fixed at 14,612,493. The Team hold a small percentage of the tokens which are already unlocked. This is in contrast to most projects, which have vast amounts of tokens waiting to be introduced into the market, further diluting the value of existing tokens in circulation. In addition, the circulating supply of QNT will decrease due to token lockups through various methods outlined later in this article, creating deflationary pressures.
To be able to use the platform, developers, gateway operators and enterprises have to purchase annual licences. Licenses are paid in FIAT, which the Quant Treasury then converts to the equivalent amount of QNT. This means enterprises don’t have to worry about purchasing QNT directly from exchanges as the treasury handles that for them. An Overledger Network Oracle will be providing the pricing for USD to QNT conversion.
The QNT purchased for the annual licenses are locked up in layer 2 payment channels for 12 months, thereby reducing the circulating supply and token velocity of QNT, whilst granting developers access to the system. After 12 months, the license expires and the locked QNT is moved to the QNT Treasury. To continue to be able to access the system the developer must renew their license, repeating the process, resulting in QNT being locked up for a further 12 months. This creates a constant yearly demand for QNT and as the platform grows exponentially, so too will the number of licenses required to be purchased each year.
Quant Overledger is an Enterprise DLT operating system, that connects to any DLT and Application Programming Interface (API) based systems providing scalable interoperability. It exposes their combined functionality through a single API and allows coordinated transactions and business processes to happen across all the connected DLTs and API based systems.
In order to leverage all their DLTs assets together, organisations can license and run Overledger for internal use and deploy it on-prem or in their own cloud instance. A single API for application development provides all the functionality of all the DLTs they have deployed, with Multi-chain Smart Contracts extending current DLT Smart Contract functionality across all the connected DLTs.
Developers will be able to obtain an annual license to develop applications on Overledger through the purchase of QNT tokens, equivalent to a fixed FIAT amount. The developer wallet will in turn be authorised to access the platform for the length of the license period (i.e. annual), as well as develop, sign, and publish applications. Further information about the licenses can be found here.
Overledger Network Enterprise License
Overledger Network for Enterprise also allows organisations with an appropriate business model and controls to make its own in-house DLT assets available to partners, group organisations and third-party developers, and make revenue from the use of those assets in a secure trusted ecosystem of the Overledger Network.
Any number of organisations running Overledger can connect and do business across their DLTs by connecting their Overledger Gateways, either privately or through the Overledger Network for Enterprise, to create trusted, private business platform across and between their industries. The Overledger Network ecosystem can connect to all the DLTs, globally, that organisations need to do business, and present them in a single API, with a vibrant marketplace of applications and with the simplicity and ease of use of today’s Internet — with the trust, privacy and security that only distributed ledger technology can provide.
Enterprise license fees will be determined on the basis of:
- number of users
- number of employees
- types and number of applications (internal, external, native applications or web based etc)
- volume of Overledger transactions
Overledger Network Gateway Operator License
Enterprises wishing to offer others access to their in-house DLT functionality or data, whether partners or on the open market, Overledger Gateways are the solution. Overledger Gateways connect public or private DLTs to the Overledger Network, making their assets available (with full control, at a price you set) to applications, both in-house or on the marketplace. With Overledger Gateways, customers can also connect new public DLTs to Overledger Network, or offer connectivity to existing public DLTs, and gain transactional revenues
Community members can also run gateways to earn a percentage of transactions that pass through their Gateway to resources they make available. If you already host blockchain nodes and participate in different networks, you can complement your node infrastructure with Overledger Network Gateways and also earn QNT transaction fees on top of your blockchain node rewards and earnings.
Through open source connectors (explained later in the article) developers and operators will be able to add any type of data sources and resources to their gateway connector and advertise them to the rest of the network. By having unique data sources, resources on the Overledger Network, all requests of that resource will be linked directly to your Gateway to be the designated Gateway for that particular service.
In addition to the license fee and developer license approach, enterprises also have to pay a platform fee calculated as a percentage of the license fee in QNT. QNT will be obtained and managed through the Treasury by Quant Network on behalf of the client at a given day’s rate.
Quant will be releasing enterprise add-on services which provide additional features and services which can also be consumed as middleware. These will be released with updates to Overledger for Enterprise to utilise.
End Users will also need to hold QNT to be able to run mdApps and access the Overledger ecosystem. The license key will expire annually and must be renewed using only QNT. This is a similar approach to the Apple App store. It’s a marketplace, where you pay Apple £1000 for an iphone which has the keys in the device to access the app store and run and use ios apps. Rather than purchase the phone the license is acquired to access the ecosystem. (Note please don’t take this as each user needs to spend £1000 a year to access the platform as that is not the case, it is just an example showing how Apple charge for access to the platform by selling the phone with the keys)
The community treasury is a Multi-Chain Decentralised Application (MDAPP) operating in a trustless manner with the use of Layer 2 unidirectional payment channels. This enables scalability of payments for transaction fees in QNT, with the vast majority of transactions being performed off-chain instantly, with only minimal transactions being done on-chain such as the opening and closing of channels and random reconciliations). This means despite QNT being an ERC20 token, it doesn’t matter about Ethereum’s low tps or high ETH fees.
The community treasury's role is to handle QNT payments ﬂowing from users to the gateways in such a way as to disincentivise faulty behaviour from any user or gateway, and to do so in a manner where it can be held accountable to any observer.
Each payment channel created will hold a certain amount of QNT funded by the creator of the channel and the channel is set to expire after a declared time period after which all unclaimed QNT can be reclaimed by the channel creator. The creator of the channel can increase the amount of QNT and adjust the timeout period for the channel. The receiver in the channel can claim a certain amount of QNT from the channel when certain conditions are met such as provide proof they have received an off-chain transaction sent to them by the creator. You can read more about the community treasury here, here and here.
Consumption fees are paid for usage of Overledger as well as to gateways for performing functions as part of Overledger Network. As QNT is on the Ethereum blockchain, the community treasury uses uni-directional payment channels to vastly increase transaction throughput as well as minimising transaction fee cost.
The payment channels require a lockup of QNT in order to be used. The more QNT locked up and the longer for, the cheaper QNT transaction will be as more transactions are sent off chain. Thus, reducing the token velocity compared to other platforms used for transaction fees and that longer and bigger QNT lockups would be beneficial for the QNT market price.
Enterprises and Developers will need to pay for reads and writes to Overledger. Developers will need to make payment in QNT based on a FIAT value whilst enterprises will pay in FIAT which then gets converted to QNT through the treasury. As enterprises will have larger volumes of usage, there will be multiple payment options for:
- pay in arrears
- pay in advance (pre-pay)
- unlimited usage
- number of users
The community treasury allows developers to pay gateway owners QNT to use their resources. Each developer has a uni-directional payment channel open to the community treasury, the community treasury has a uni-directional payment channel open to each Gateway, and the community treasury is responsible for routing payments between the developer and gateway channels.
A gateway will earn a fee in QNT for every function request correctly processed before the response timeout limit. These fees will accumulate in a Treasury to Gateway payment channel, the total of which can be claimed whenever required.
Users will each need to deposit an amount of QNT that will be used to pay fees to gateways for processing functions. This deposit will be used to fund a payment channel between the user and the community treasury. Any fees that haven’t been spent when the channel times out / is closed will be returned to the user.
The user also has to deposit a small amount of QNT to cover the cost of any penalties for raising incorrect disputes. This dispute deposit is not expected to be large but is used to disincentivise a user from raising many unnecessary disputes and is returned if no unnecessary disputes are raised.
Quant’s vision is to build an ecosystem around Overledger, allowing for developers and Enterprise to innovate, create value and build game-changing multi-chain applications for users and their customers. They plan to foster innovation by directly incentivising developers with an App Store model akin to Apple and Google stores but instead for Blockchain enabled Multi chain Decentralised Applications (MDApps).
Quant Network will be giving Developers the choice of using the best business model for their Multi-chain Decentralised Apps, in line with the market’s expectations via any of the following four revenue models:
- Freemium Model. In this model, users don’t pay to download or use the Multi-chain Dapp. But they can pay to get access to additional sets of features.
- Paid Model. In this model, users pay once to download the mdApp and use all of its functionality. No additional charges will apply.
- Subscription Model. In this model, users pay for a (daily/monthly/annual) subscription to use the mdApp.
- In-App Model. In this model, users are able to download the mdApp for free (or at a cost) but are charged when they use in-app functionality. Developers independently decide how much to charge users for their apps.
Overledger Network Marketplace
The Overledger Network Marketplace is an ecosystem where data holders and service providers, can advertise and sell services, data, APIs and any other off-chain or on-chain integration or resource you can connect to your gateways for the ecosystem to consume. Quant are building the Marketplace directory and front-end to start listing services. The Gateway’s service or data is then published to the rest of the network to build applications (mdApps) with and for users to consume and use.
You, as the data owner and gateway operator, set the price and the rules for the use of the data or service. You can set the transaction fee in QNT for each service, transaction, or event for consumers to buy from you in QNT. This payment of your service or data is managed through the payment channels in the Treasury where you are paid directly to your wallet through the Treasury as the intermediary between buyer and seller. The Treasury facilitates all the transactions between parties and takes a percentage of the transaction as fees.
Members of the Overledger Network ecosystem, will be able to buy and consume services, and data with payments handled by the Overledger Network Community Treasury, further increasing the demand for QNT, and locking more in payment channels.
Open Source Connectors
Quant will be releasing open source connectors so that developers can connect any blockchain or API to Overledger Network and be part of the Network of Networks. Based on globally recognised standards that Gilbert founded — ISO TC 307 and which 57 countries are working towards, this model can be reused to connect to distributed databases, big data providers, APIs and any type of service a gateway wants to provide.
The integration of open source connectors to the Overledger Network will provide organic ecosystem growth. The increased variety of data sources and services will lead to more complex multiple chain apps being developed, which should, in turn, drive further connectors to be developed.
Pick and Mix — Combine any blockchain and API based system to create new products
DeFi on Ethereum enabled DAPPs to easily interoperate with each other and be combined to build exciting new products. This combing of multiple projects together is exactly what Overledger has set out to achieve from the start with Multi-Chain Decentralised Applications. Rather than being restricted to combining projects within a single ecosystem like Ethereum, Overledger enables developers to utilise multiple different blockchains to tailor-make their application to take full advantage of the benefits of each of the blockchains without having to compromise on a single one, as well as integrate with any API based system (Pretty much everything has an API nowadays). Treaty contracts enable smart contracts across multiple blockchains to take this to another level.
The idea of combining apps goes far beyond just DeFi, this is what the future of all applications will be, interacting with Supply Chain, Decentralised Identities, Financial platforms, healthcare, IOT, as well as interacting with non-blockchain networks. All in a scalable interoperable way, following globally recognised standards and without imposing restrictions on the underlying blockchains or adding additional overhead / latency / bottleneck.
The Overledger Network will enable developers to select their favourite blockchains and API services and combine them to build exciting new products with scalable interoperability.
Data providers can sell their off-chain data and make it available to the entire Overledger Network ecosystem by running an Overledger Gateway. Unlike other oracle solutions, it signs the data at source with bank grade security, ensuring it hasn’t been tampered in transit, whilst enabling access to be controlled in a private and scalable way. Off-Chain aggregation by querying multiple gateways using multiple sources means value gets transferred to the data providers rather than being lost by paying extortionate gas fees to miners, enabling frequent updates for accurate price feeds rather than at infrequent time intervals.
As an example, a gateway operator decides to integrate this off-chain data for historical USD/GBP FX rates and is selling the data for 1QNT for each day’s rates. All participants of the ecosystem will be able to see the listed service and data offered to buy and consume. Overledger Network participants can see the advertised data and service, and consume it directly from the Gateway, paying the Operator the price for the data, handled by the Treasury through payment channels. Driving further demand for QNT and more locked in payment channels.
You can also run cross-chain oracles to serve the Overledger and wider DLT ecosystem by creating MDAPPs that can operate as oracles across networks aimed for enterprise, institutional and developer oracle needs.
Gateway Operators will have to lock QNT (Stake) to be able to process requests within Overledger Network. The more QNT that the operator stakes, the more requests the gateway is authorised to handle. If the gateway returns faulty data / malevolent behaviour, then the deposit gets slashed as punishment to incentivise correct behaviour.
Staking is also required for helping prioritise gateway operators when there are multiple gateways who can transact the same resources. The gateways that have staked more QNT with the Treasury, will be ranked in terms of priority by the algorithm to determine who will receive the transaction request.
As volumes of QNT are going to be locked up, Quant are exploring options with new partners and looking at introducing QNT Staking for Gateway operators to opt-in to a staking service, facilitated by the Treasury to make better use of stationary QNT, where your locked-up license will be able to earn staking rewards facilitated by a regulated 3rd party. This will lead to more QNT being locked up and taken out of circulating supply and further reducing token velocity.
Signing of Transactions
To enforce confidentiality and integrity, QNT are used to validate with the option to sign and encrypt every transaction that flows through Overledger. Every enterprise client, developer, user, and application (mdApp) validates each transaction using their QNT linked to their mdAppID and bpiKey. — No transactions can flow through Overledger without being securely validated by QNT. — No 3rd party can view or tamper with transactions and their contents, including Quant when signed and encrypted.
Plus, even more utility is being planned in the near future
Why Quant has the potential to be an incredible long-term investment
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Every blockchain project, enterprise, developer, and user all need interoperability, not just between blockchains but with existing networks as well. Quant has built the technology to deliver scalable, future-proof interoperability without imposing restrictions on the underlying blockchains and without the overhead / bottleneck of adding another blockchain in the middle. See this article for more details — What is a blockchain operating system and what are the benefits? As well as this article here and here and this twitter thread below:
Central Banks and Banks don’t send payments over the public Internet, they have mission critical private infrastructure networks. In order for the tech to be used it needs to be integrated in those networks. This is why Quant’s partnership with SIA is so important. Quant Network partner with SIA, A Game Changer For Mass Blockchain Adoption by Financial Institutions
SIA provide a private financial network which is the backbone of the European financial market. SIA, in partnership with Colt and SWIFT are the only 2 providers for the Eurosystem Single Market Infrastructure Gateway, granting access to all RTGS, Securities and Instant Payment transactions for all of Europe.
Overledger is integrated into SIAChain, part of that private financial network (SIAnet) that is the backbone of the European financial market, enabling the 580 banks, central banks, trading venues that are building projects on SIAChain to benefit from scalable Interoperability.
SIA has not only partnered with the European Central Bank connecting all central banks in Europe to the ESMIG, but also provide networks for other Central Banks such as Bank of Canada, Nordic Central Banks and over 100+ Tier 1 Banks.
SIA’s recent merger with Nexi makes them Europe’s largest payment provider. Combined, they have around two million merchants, 120 million cards, and an overall number of processed annual transactions equal to €21 billion.
Some of the largest blockchain projects in the world are being launched on SIAChain, one of those is the Spunta project. Spunta is a huge project consisting of the entire Italian banking system and looks to further expand into Europe. See the twitter thread below for more details which also covers Quant’s meetings with central banks such as the FED, ECB, BIS, finance regulatory bodies such as the FCA and William Lovell, the Bank of England’s Head of Future Technology talking about the project, as well as Quant being made a guarantor of Pay.UK, the UK’s largest payment network where Quant will help shape the payment ecosystem and help set the strategic direction of the Payments infrastructure and adopting the New Payments Architecture (NPA).
Quant have also been named as a supplier for the UK Government Crown Commercial Services and have partnered with AUCloud who work with the Australian Government and Department of Defence, validating Quant’s technology for being incredibly secure and compliant by being able to operate in the most sensitive of networks.
Central Banks, Banks and enterprises all aren’t going to just completely replace their existing infrastructure with blockchain at the flick of a switch. This is mission critical infrastructure which entire economies depend on. Quant enables seamless integration with any platform, but of particular importance is Oracle. Every top bank in the world uses Oracle and Quant have been selected as one of three companies as a Fintech Partner for Financial Services Infrastructure. Oracle invited Quant to attend the leading financial event of the year — SWIFT SIBOS where Oracle were co-marketing with Quant to take their solution to their 480,000 clients including meetings with Banks / Central Banks
The target market for Quant is enormous and we didn’t even cover the tokenisation of assets, work in capital markets and partnering with SEC Registered Broker AX Trading with 800 clients. This is just one of the verticals Quant is targeting, the sheer scope of this project is difficult to comprehend. Everybody needs interoperability.
So with the tech being built, integrated into the largest financial networks in the world, partnering with the largest existing infrastructure providers in the world, the next step is to enable anybody to connect any blockchain or API to Overledger Network and be part of the Network of Networks. Based on globally recognised standards that Gilbert founded — ISO TC 307 which 57 countries are working towards, this model can be reused to connect to distributed databases, big data providers, APIs and any type of service a gateway wants to provide. Quant are also a founding member of the European Unions International Association for Trusted Blockchain Applications (INATBA).
The Overledger Network is a network of networks, which allows enterprise and communities stakeholders to access and participate in a growing hyper-connected decentralised ecosystem. Enterprises, banks, central banks, trading venues, etc will be able to host their own secure dedicated gateways, enabling secure connectivity to permissioned networks, permissionless networks, ecosystems, consortia, and other distributed technologies. Community members will also be able to run an Overledger gateway to further enhance the scalability, decentralisation and optimise network latency, providing enterprises, developers, and users choice to use the closest gateway when accessing permissionless blockchains. The Overledger gateways will create a horizontally scalable p2p network where gateway operators can advertise and sell services, data, APIs and any other off-chain or on-chain integration or resource you can connect to your gateways for the ecosystem to consume.
This creates a positive feedback loop, the competition amongst gateways will lead to a larger variety of blockchains and APIs connected to the ecosystem, leading to higher usage of the network as well as the underlying connected solutions, enabling scalable interoperability between them all. This further creates awareness of the platform which leads to more blockchains and services being added and higher usage of the platform.
Metcalfe’s Law states that a network’s value is proportional to the square of the number of its users. This Network of Networks effects will cause not only the ecosystem to grow exponentially but also the value of the network as more and more join the ecosystem. These network effects lead to explosive growth as seen with the Internet and other social media platforms. QNT captures the value of all connected blockchains and APIs and all connected blockchains and APIs benefit from being part of the Network of Networks.
The next piece in the puzzle is how to connect these gateways together and create a protocol that can be the foundation for the evolution of today’s Internet. An Internet which is secure, inherently trustworthy and builds the foundation for the next generation of connected businesses.
Connecting the Internet directly to blockchain will allow websites to be natively created and served directly from blockchains, without the need to have, run and maintain web servers, web services, SSL certificates etc and all running in a completely trusted, extremely resilient / tamperproof environment.
Quant are collaborating with Massachusetts Institute of Technology (MIT), US Government, Intel, Juniper Networks, Payment companies and Telecommunication companies to create Open Digital Asset Protocol, an open blockchain agnostic protocol, enabling interoperability of assets and messages across DLTs as well as Oracle functionality with the use of decentralised trusted compute base gateways, similar to how BGP protocol enables communication between different AS through gateways (BGP Routers). BGP is the protocol that makes the Internet work today but was never designed with security in mind. You can read this twitter thread for more details below as well as see the related papers here and here.
QNT’s token velocity is reduced from multiple sources outlined below:
- Annual licenses lock QNT up in payment channels for 12 months. Once the license is renewed QNT is locked for a further 12 months.
- Trustless layer 2 payment channels provide scalability for transaction fees in QNT, despite it being an ERC20 token, with the vast majority of transactions being performed off chain instantly, with only minimal transactions being done on chain.
- The payment channels require a lock up of QNT in order to be used. The more QNT locked up and the longer for, the cheaper QNT transaction will be as more transactions are sent off chain. Thus, reducing the token velocity compared to other platforms used for transaction fees and that longer and bigger QNT lockups would be beneficial for the QNT market price.
- Payment channels are used for payments to gateways to perform tasks, licenses, purchase of MDAPPs, off-chain data feeds, access to APIs etc all contributing to more QNT being locked in payment channels.
- Gateway Operators will have to lock QNT (Stake) to operate within Overledger Network. The more that is staked the more requests the gateway is authorised to handle.
- Staking is also required for helping prioritise Gateway operators when there are multiple gateways who can transact the same resources. The Gateways that have staked more QNT with the Treasury, will be ranked in terms of priority by the algorithm to determine who will receive the transaction request.
- Quant are exploring options with new partners and looking at introducing QNT Staking for Gateway operators to opt-in to a staking service, facilitated by the Treasury to make better use of stationary QNT, where your locked-up license will be able to earn staking rewards facilitated by a regulated 3rd party.
- The token has all the attributes for an excellent potential store of value and people will be more inclined to hold it, thus reducing token velocity further.
Quant has a very small supply of just 14.6 Million QNT. No new tokens will ever be minted and there is no inflation. The team only hold a small percentage of tokens compared to most projects.
As tokens are locked up through annual licenses, payment channels and gateway staking, the circulating supply of QNT will reduce, creating deflationary pressures and lead to price increases.
Unlike most projects, the token is needed by everyone including enterprises which is where the most adoption is going to be. The Quant Treasury facilitates enterprises to pay in FIAT which then gets converted to QNT rather than enterprises themselves having to purchase from exchanges directly.
Gilbert Verdian the CEO — his CV speaks for itself. Having over 20 years of industry experience, he has gained many contacts and understanding of how large companies and governments operate at the highest level. Working for PWC, HSBC, EY and various roles in Government in addition to being part of the committee for the European Commission, US Federal Reserve, and the Bank of England. Before starting Quant, he was the Chief Information Security Officer for Vocalink (Mastercard) where he was in charge of security for the entire payments in the UK managing £6 Trillion per year
Martin Hargreaves recently joined as Chief Product Officer. He has 12 years’ experience at Vocalink and was the Vice President of Product. Vocalink (Mastercard) manage the entire payments system for the UK as well as other payment networks in the US, Singapore, and others.
Guy Dietrich, managing director of Rockefeller Capital (who manage assets worth over $30 billion) joined the board of directors and has attended meetings personally with Gilbert such as with the Financial Conduct Authority in the UK
Neil Smit, Former CEO and now Vice Chairman at Comcast (2nd largest broadcasting and cable television company in the world) has joined the board of directors to help grow the company and has the perfect background and experience in large-scale Internet networks.
A Sustainable Business Model
Time and time again we are seeing projects having to cease operations or significantly cut back on staff / costings to try and survive a little longer. Once funds run out from ICO then what’s the plan? Less funds for future development / growth of the platform which in turn has a big impact on investment opportunities.
Unlike most projects which set up a foundation to kickstart the ecosystem and dissolve once funds run out, Quant Network is already producing revenue and brought in almost $10 million last year before the coronavirus hit. They are rapidly expanding (even during the pandemic), increasing staff levels as well as expanding to the US and other parts of the world through their partners, such as the “Big four”, the largest professional services companies in the world. This allows them to grow exponentially over the years, develop the platform further and create additional revenues which results in more QNT being locked up through licenses.
There isn’t another project that comes close to the tokenomics of Quant, especially at its current market cap of under $200 million, with 2/3 the total supply of Bitcoin and no inflation. Everybody needs interoperability and Quant is working with Central Banks, Governments, Enterprises, some of the largest payment infrastructure networks in the world to re-architect the entire financial system and work in collaboration with MIT, Intel, Juniper Networks, Payment and Telecom companies to build a protocol to be the foundation for the evolution of todays Internet. An Internet which is secure, inherently trustworthy and builds the foundation for the next generation of connected businesses.
Quant enables scalable interoperability between any blockchain and any API / existing network without the overhead and bottleneck of adding another blockchain in the middle. Providing enterprise grade Multi-DLT Oracle functionality, a horizontally scalable network of networks where the ecosystem will grow exponentially and developers, consumers and enterprises are all able to extract value from the ecosystem.
QNT captures the value of all connected blockchains and APIs, it has incredible utility from annual license fees, platform fees, transaction fees, payments in the marketplace, gateway staking to process more transactions, signing of transactions and more. Enterprises can pay in FIAT which then seamlessly gets converted to QNT through the treasury.
It’s blockchain agnostic, regardless of which blockchains come out as the leading platforms, they will all need interoperability, not just between blockchains but existing networks as well. It’s a hedge against inflation, even Bitcoin has inflation until the 21 million have been mined, with Quant there is none. It’s not going to happen overnight, but Quant has the potential to be an incredible store of value and an extremely rewarding long-term investment and I encourage everyone to look into it further and DYOR.
“We just recognized that Quant is doing what Ripple promised. Quant and SIA Europe successfully tested cross-blockchain interoperability between multiple Distributed Ledger Technology (DLT) protocols on SIA’s inter-bank network, SIAnet. SIA is the backbone for financial institutions, central banks, corporates, and the public sector to process their transactions. It was clear that Quant’s operating system provides the layer for blockchain interoperability in the financial services sector.” Enzo Villani, Managing Partner at Alpha Sigma Capital commented.
For additional reading I strongly recommend David W’s articles
A deeper look into the Quant Network Utility Token (QNT) valuation dynamics and fundamentals
The reasons why Quant Network (QNT) will rise to the Top of the crypto sphere in the coming months
The potential of Quant Network’s technology to capture value from the structural shift in the World’s assets and machine-related data/value transfers
As well as the below articles and others under my profile.
Quant’s Token Utility Paper / Overledger Network for Community
Overledger and Overledger Network for Enterprise
The Network of Networks, Scalable Interoperability to Unleash the True Potential of Blockchain
How the Overledger Network Community Treasury powers the Network of Networks
What is a blockchain operating system and what are the benefits? Introducing Overledger from Quant Network.
Wall Street 2.0: How Blockchain will revolutionise Wall Street and a closer look at Quant Network’s Partnership with AX Trading
Large Enterprise Adoption of Blockchain is happening, enabled by Quant Network’s Overledger
As well as an 8 Part Series taking an in-depth look at Overledger starting with Part 1