I spent the biggest part of my day analyzing and finding information for a crypto project, for the needs of one Assignment of mine.
I chose BAT because I really wanted to learn about it and this is my findings.
The framework I used for the analysis is the below. Please note that you should always do your own research and also - no technical analysis is presented here, which would be also needed for investment decisions to be made.
The framework that will be presented will be as follows:
Starting with a general overview of the project (background, mission etc). Continuing with market analysis and technology analysis. Then we mention the token economics, the team and advisors, as well as the community and partnerships. There is also a research on the projects Roadmap and milestones, risks and challenges. At the end, we summarize our findings.
Overview
I selected to post about BAT, which is #107 in CoinMarketCap
https://coinmarketcap.com/currencies/basic-attention-token/
About BAT
Basic Attention Token (BAT) is a cryptocurrency that has the goal to resolve the problems that affect the advertising industries; This means issues such as fraud, user abuse, low loading times due to user trackers etc.
BAT was founded by Brave Inc. to be used in their web browser Brave.
Brave was created in 2015 by web pioneer Brendan Eich (creator of JavaScript and former CEO of Mozilla Corporation) and CTO Brian Bondy. Brave browser is considered to be a fast, privacy-focused, open-source browser that can block third-party ads and trackers.
Mission
BAT's mission is to improve the way advertising is done on digital platforms by creating a fairer and more efficient system that benefits users, advertisers and publishers. What can the users do? They can replace the ads they see with ads on Brave's ad network, earning her BAT rewards based on their attention. Advertisers can target audiences more effectively and only pay for verified views. Publishers can increase their revenue share and reduce their reliance on intermediaries such as Google and Facebook.
Having said this, we should take under consideration that at the moment it is not possible for all countries to receive the BAT earned in a custodial wallet: https://support.brave.com/hc/en-us/articles/6539887971469-List-of-supported-regions-for-connecting-a-custodial-account-to-Brave-Rewards-and-Brave-Creators
The main purposes of BAT are:
- Give users a better browsing experience that respects their privacy and rewards their attention.
- Offer advertisers a transparent and responsible way to reach prospects and measure campaign performance.
- Publishers have a sustainable way of monetizing their content
https://basicattentiontoken.org/
https://www.cryptovantage.com/buying-crypto/bat
https://coinmarketcap.com/currencies/basic-attention-token
Market analysis
We will review the following aspects:
Market demand for the project's services or products:
The aim of BAT is to provide a better and safer advertising experience for its users, as well as for the advertisers, and publishers. The demand for such a service is already high and keeps growing, as the current online advertising industry is facing many challenges. Data breach, privacy violations, fraud, and more, that ultimately lead to users’ dissatisfaction.
According to a report by Statista, the global digital advertising spending is expected to reach $526 billion by 2024. This indicates a large and growing market opportunity for BAT and its platform.The competition and market share of similar projects:
There are a few similar projects as BAT, such as AdEx, Adbank, Adshares. However, BAT’s major advantage is its integration with Brave Browser.
The Brave Browser has millions of users and verified content creators and also a dedicated team behind its development.
According to CoinMarketCap, BAT has a market capitalization of over $287 million as of June 23rd 2023. BAT has a circulating supply of almost 1.49 billion tokens out of a maximum supply of 1.5 billion tokens.
BAT's price has fluctuated significantly over the past years. On this day, June 23rd the price is $1.93
Technology analysis
We will review the following aspects:
The technology stack and its scalability:
BAT is built on Ethereum's blockchain technology.
BAT uses Ethereum's ERC-20 token standard and it uses a specialized web browser called Brave. Brave is an open-source browser that blocks third-party ads and trackers, and integrates with the BAT platform.
BAT's technology stack allows it to scale up to millions of users and transactions, however there are also some scalability challenges, such as the high gas fees and network congestion on Ethereum.The security and reliability:
BAT's security and reliability depend on the security and reliability of Ethereum and Brave browser. Ethereum is a well-established and widely used blockchain platform that has a strong network of nodes and miners that secure its transactions and data. Similarly, Brave is considered a secure and reliable web browser that protects users' privacy and data from third-party trackers and malware.
https://www.investopedia.com/terms/b/basic-attention-token.asp
https://www.sofi.com/learn/content/what-is-bat-crypto
Token economics
We will review the following aspects:
The token's utility
BAT is a utility token that serves as a medium of exchange and a unit of account on the Brave platform.
It can be used to buy ad space, sponsoring content, tipping creators, rewarding users etc.The token's demand and supply
BAT's demand is driven by its utility. The more users, advertisers, and publishers join the Brave platform, the more value and demand BAT will have. The demand is also influenced by its price, its availability on exchanges etc. The token supply is fixed at 1.5 billion tokens, of which 1.49 billion are currently in circulation, as mentioned before. BAT's supply is distributed among users, advertisers, publishers, Brave Inc., and the User Growth Pool (UGP). The UGP is a reserve of 300 million tokens that are used to incentivize user adoption and growth.The token distribution:
BAT's initial coin offering (ICO) in 2017, raised $35 millions very quickly. 1 billion tokens were sold at a price of $0.036 per token. The remaining 500 million tokens were allocated as follows: 200 million tokens for Brave Inc., 200 million tokens for the UGP, and 100 million tokens for the development team and advisors.
More token information and analytics is available in Etherscan
BAT Token Contract and Distribution Chart (etherscan.io)
https://basicattentiontoken.org/static-assets/documents/token-econ.pdf
https://www.investopedia.com/terms/b/basic-attention-token.asp
Team and advisors
According to the project's website, BAT is a token that aims to make crypto and DeFi accessible and useable for everyone, and to solve the problems of the digital advertising industry. BAT is integrated into the Brave browser, which is a privacy-focused web browser that blocks ads and trackers by default.
The founder and CEO of BAT and Brave is Brendan Eich, the creator of JavaScript, co-founder of Mozilla and Firefox. The co-founder and CTO of BAT and Brave is Brian Bondy, a former senior engineer at Mozilla and Khan Academy.. The chief information security officer of BAT and Brave is Yan Zhu, a former security engineer at Yahoo and Tor Project.
https://basicattentiontoken.org/team/
The quality of the project team and consultants seems to be very high, with extensive experience, achievements and skills in the fields of cryptocurrency, web development, security, engineering and product design.
https://basicattentiontoken.org
Community and partnerships
The project's community seems to be large, engaged, and active, as evidenced by the following metrics:
BAT has over 58 million monthly active users and 22 million daily active users on the Brave browser
https://bravebat.info/brave_browser_active_usersBAT has over 2 million verified creators who accept BAT as a form of payment or donation for their content
https://basicattentiontoken.org/growth/
- BAT has over 269 thousand followers on Twitter, where it regularly posts updates, announcements, and events
The project also has several partnerships and collaborations with other projects in the crypto and web space.
https://brave.com/transparency/
https://twitter.com/AttentionToken
Roadmap and milestones
The project's roadmap and milestones can be found at the BAT Roadmap 2.0,published in February 2021 and updated in July 2021. (https://brave.com/bat-roadmap-update-2/)
Four main areas are covered:
Brave Wallet, is a native C++ implementation of an Ethereum remote client that supports multiple blockchains, DeFi, and NFTs.
Brave Swap is a DEX aggregator that allows users to swap tokens across multiple liquidity sources with the best price and lowest fees.
THEMIS is a protocol to progressively decentralize the Brave/BAT private ads infrastructure. It aims to provide users with more transparency and control over their rewards, and enable new use cases for BAT such as e-commerce, VPNs, and more.
Brave Search is a privacy-preserving search engine that does not track or profile users. It also offers users the choice to use their own ranking models or contribute to a community-curated open ranking model. Brave Search is currently in beta testing and has over 40 million queries per month.
Some of its milestones are:
- Launch of Brave Swap on desktop in June 2021
- Bridging BAT across Ethereum and Solana blockchains in June 2021
- Launching Brave Search beta in June 2021
- Reaching over 55 million monthly active users and 16 million daily active users on the Brave browser in September 2021
It was not possible to find an exact timeline or estimation of roadmap. However there is information about all the updates and important project milestones.
https://brave.com/bat-roadmap-update-2
https://beincrypto.com/basic-attention-token-bat-milestones-and-achievements
https://basicattentiontoken.org
Risks and challenges
There some risks and challenges to consider, such as:
- Regulatory risks
The legal framework for crypto assets is still inconclusive and varies across jurisdictions. The project may face regulatory uncertainty, compliance costs, or legal disputes over its operations, products, and services. - Operational risks: The project relies on complex and evolving technologies that may be vulnerable to cyberattacks, frauds, hacks, or glitches.
https://www.imf.org/-/media/Files/Publications/GFSR/2021/October/English/ch2.ashx
https://www.researchgate.net/publication/355407027_Cryptocurrencies_Key_Risks_and_Challenges
https://www.garp.org/risk-intelligence/technology/7-unique-challenges-in-cryptocurrency-risk-management
Conclusion
Based on the analysis of the project's market analysis, tokenomics, team and advisors, community and partnerships, roadmap and milestones we can conclude the following
The team behind the project is dedicated and experienced. They seems to be a a clear vision and mission for BAT and Brave and aim for users empowerment, and a more fair distribution of rewards in the evolving digital ecosystem.
The project’s community is large, engaged, and active community that is constantly growing
The project aims to make crypto and DeFi accessible and useable for everyone. They offer a native wallet that supports multiple blockchains, DeFi, and NFTs as well as a DEX aggregator that allows users to swap tokens across multiple liquidity sources.
Even though there are some risks and challenges, such as regulatory uncertainty, legal disputes etc, we can see from its road map and milestones that the next steps are carefully planned and achieved.
Overall, the project has a high potential.
It is not possible to make investment decisions based only in the Market Analysis. A detailed technical analysis should be also included.
https://coinmarketcap.com/currencies/basic-attention-token/ (screenshot June 23rd 2023)
Thank you for your time!