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Tezos Has The Second Most Developer Interest In The Industry According To The Digital Assets Primer Of Bank Of America
In the graphs that are included in the report, we see that Tezos scores the second-highest on the developer interest scale. Out of the 30 cryptocurrencies, only Ethereum scores higher than Tezos.
By: Lee Evans
9 October 2021
The Bank Of America Digital Assets Primer Report
“Digital asset sector too large to ignore; not just bitcoin, so much more.”
This is the first sentence in the Digital Assets Primer of the Bank of America which was published October 4th. In the 141 page long document, the Crypto & Digital Assets Strategy department of the Bank of America gives its analysis on the crypto market, its components, risks and potential.
The report stated:
“With a $2tn+ market value and 200mn+ users, the digital asset universe is too large to ignore. We believe crypto-based digital assets could form an entirely new asset class.
Bitcoin is important with a market value of ~$900bn, but the digital asset ecosystem is so much more: tokens that act like operating systems, decentralized applications (DApps) without middlemen, stablecoins pegged to fiat currencies, central bank digital currencies (CBDCs) to replace national currencies, and non-fungible tokens (NFTs) enabling connections between creators and fans.
Venture Capital digital asset/blockchain investments were $17bn+ in 1H/2021, dwarfing last year’s $5.5bn. This creates a new generation of companies for digital assets trading, offerings and new applications across industries, including finance, supply chain, gaming and social media.”
It went on to say:
“Despite potential regulatory headwinds (maybe tailwinds ultimately), we are bullish on the long-term prospects for the digital asset ecosystem as it enters the mainstream.
We anticipate significant growth as digital asset use cases move beyond bitcoin’s store of value thesis to an industry characterized by product innovation, regulatory clarity, increased institutional participation and mainstream adoption.”
Valuation of crypto
The report mentions that it is not possible to value cryptocurrency tokens due to the absence of intrinsic value. Intrinsic value is determined by analysing the value of a company and its cash flow.
However, according to the report it is possible to determine whether or not a token is overvalued or undervalued:`
“We look at a token’s functionality, adoption and development (Exhibit 32 & Exhibit 33).In general, a token needs at least 2 of the 3 for demand to build (and potentially create market value).”
Scoring high on development, adoption and functionality means higher value ranking. Scoring lower than other cryptocurrencies in the same market cap range, means that a cryptocurrency “is probably trading on hype” and is overvalued.
In the graphs that are included in the report, we see that Tezos scores the second highest on the developer interest scale. Out of the 30 cryptocurrencies, only Ethereum scores higher than Tezos.
Going by just these specific these metrics, which are determined to be valid metrics to compare and justify current token values in the market of today, we can conclude that Tezos is the most undervalued token out of the selection of 30 tokens based on market cap/developer ratios.
It outranks all other tokens except Ethereum, while its current market cap value is much lower than most. You can see this on the two charts below:
Another important factor to evaluate is the question of sustainable growth.
Looking back to The Electric Capital Report of last year, we see that Tezos was in the top four in an analysis that used comparable metrics such as developer activity and interest growth. Tezos has been moving up in rankings since last year, which indicates continuing growth.
Sustainable growth is also visible if we look at metrics that we can use to measure adoption of the Tezos blockchain. Although adoption is an important metric to compare token values, the Digital Assets Primer report does not include metrics on that subject for the 30 selected tokens.
Better-call.dev offers us the metrics we need though. Looking closer at on-chain activity, we see that the amount of contract calls per month on Tezos mainnet has been growing exponentially for over a year as well. Contract calls are interactions with dApps.
By these metrics we see growth in user activity, which means that not only developers interest grows, but also user interest and adoption.
If we look at the total amount of transactions (contract calls and basic token transfers combined), we see that this number has already reached peaks of 600,000 transactions per day, which is 50% of Ethereum’s daily transaction volume.
The third metric to compare token values Crypto & Digital Assets Strategy department of the Bank of America, is functionality. The Digital Assets Primer report mentions CBDCs (Central Digital Bank Currencies), NFTs and DeFi.
Tezos is decentralized, offers fast transactions and one of the lowest fees of all decentralized smart contract platforms. Combined with a variety in smart contract languages, tools and a growing network effect, this forms the perfect breeding grounds for a wide range of functional applications. Tezos covers all aspects and more.
Below you’ll find a brief selection of functional applications on Tezos mainnet. This is by far not a complete list. We have covered almost everything that is currently live on Tezos.
So for a more complete look into the Tezos ecosystem, scroll through our timeline here and find hundreds of articles on future and current applications and use-cases.
Digital Euro. It has been confirmed in a ‘Digital Euro experiment Combined feasibility’ report that Tezos technology has been used as one of the model experiments.
With 2 NFT platforms in the top 10 on dAppRadar, ranked by the amount of users, the Tezos NFT scene is amongst the biggest in the industry. Other popular dApps that utilize NFTs on tezos are collectables- and gaming platforms like PixelPotus and upcoming Tezotopia.
Not included in the DappRadar rankings is NFT platform OneOf. Also built on Tezos and specialized in connecting fans with the music industry.
– DojaCat (3.6M followers on Twitter), launched her NFT collection on OneOf. The highest selling NFT from this collection sold for $188,888 USD.
– Rapper The Game (1.1M followers on Twitter), has launched his NFT collection on OneOf recently.
– Today DJ Allesso (2.1M followers on Twitter), launched his NFT collection on OneOf.
In the sports department, Tezos NFTs show other interesting use-cases. Formula One racing teams RedBull Racing and McLaren Racing will both offer a fan experience on Tezos-based NFTs.
There are many other NFT projects on Tezos at the moment and we can’t mention them all, but we have to mention the much anticipated Trading Card Game Emergents. The comic book series that precedes the game and introduces characters from the game is in the process of rolling out.
Both the storyline and drawings in the series are world-class and created by a team of artists and writers that have built a great reputation creating comics for Marvel.
They previously have created both art and stories for Marvel comic books like X-Men, Iron Man, The Hulk, Spiderman, Crimson Dynamo, Spider Woman, Darkstar, Ultraverse, and much more.
DeFi (Decentralized Finance)
The Tezos DeFi ecosystem is growing fast. Users can utilize decentralized exchanges (the third exchange will launch soon), farming platforms and lending platforms. TLV in Tezos DeFi is currently calculated on DeFiLama at about 200M USD.
There are several DeFi platforms missing on that list though so the TLV on Tezos is actually higher. (Think of platforms like Smartlink, AlienFarm, FlameDAO and SalsaDAO.)
Real world use-cases
Tezos has several real world use-cases live at this very moment.
Swiss cities receiving COVID relief funds. Through the Tezos-based Ecoo app, two Swiss cities distribute COVID relief funds to its residents. This made the national news in Swiss.
Decentralized Digital Identities. Gravity provides a decentralized solution to create trusted digital identities for real-life use, that are private, portable and persistent.
Current clients like United Nations Development Programme (UNDP), Red Rose, Kenya Red Cross Society (KRCS), Norwegian Red Cross, International Federation of Red Cross and Red Crescent Societies (IFRC), Norwegian Refugee Council (NRC) and Save the Children.
STO’s are tokenization or real world assets. A popular example is the tokenization of real estate, which enables investors to buy real estate tokens and own a fraction of this asset while earning revenue such as rental income.
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In a recent integration, teams within the Tezos ecosystem have enabled more than 30 million MetaMask users to connect to the Tezos blockchain. This collaboration expands the utility of MetaMask, one of the most popular digital asset wallets, to encompass the Tezos blockchain.