Welcome to Smith + Crown Intelligence (SCI). This reference document provides context and clarification for the major fields displayed in SCI, and the methods or assumptions underlying them. The information herein is designed to provide an overview, with more comprehensive accounts of research methodology available in select research pieces, planned releases, or through future community engagements.
The document is organized into three sections:
b. How is Signal status determined?
Each section is organized so to first explain the broader rationale underlying pertinent methods, then to broadly overview key decisions with methodology, before finally describing processes and methods with greater detail and nuance.
Within the Projects Lists, there is a designated tab for “Signal Projects.” Signals are projects that have sufficiently demonstrated relevance in the industry in some form, for at least a finite period of time, as collectively agreed upon by Smith + Crown’s team of professional blockchain researchers. Table 1 briefly overviews what Signals are and are not.
• Typically, projects with clearly articulated goals, token models, protocols, evidence of leadership experience, industry knowledge, or developer capability. These factors are always considered in industry and project context—these areas are weighted differently according to circumstances.
• Guaranteed permanent. A project’s Signal status is subject to revision based on the best available evidence of the project performance, adoption, and general industry trends.
• The only projects S+C regards as quality—projects without a cryptoasset are not considered for Signals inclusion.
Projects may qualify as Signal for entirely different reasons—some due to their innovative cryptoeconomic design, others by novel approach to governance or central place in a broader adopted stack—but, by whatever combination of traits, all Signals are deemed worthwhile to understand for their potential influence on or place in the wider crypto ecosystem. Importantly, projects can be disqualified as Signal when they no longer satisfy the research team's criteria for inclusion, and several projects lack inclusion not because they lack importance, but because projects without cryptoassets are not currently considered for Signals inclusion. Reviewing the methodology section ‘How is Signal Status Determined’ will provide readers a closer look at the reasons why some projects and not others are deemed Signals.
How research is conducted critically shapes the character of its products. Smith + Crown’s methods for evaluating Signals candidates contribute significantly to distinguishing SCI from other available surveys of projects. The processes for including and changing a project’s Signal status are informed by Smith + Crown’s conception of good inquiry, so, in particular, are designed to:
- Minimize personal bias
- Reflect experts’ collective understanding of the industry’s current state
- Be responsive to reasons and evidence
- Remain open to oversight, correction, and rational revision
- Make transparent grounds for Signal’s inclusion or exclusion
- Hold findings accountable to impacted parties: analysts, projects, and the general public can exercise oversight on Signal inclusion to varying degrees
These values shape the current Signals’ evaluation process and, along with practical considerations, inform decisions on changes to workflow. The processes touching on Signal selection, evaluation, and review are discussed below, with Table 1 highlighting major factors considered. As Smith + Crown strives to produce exceptional research, critical yet civil questions, comments, and discussion are always welcome. The feedback module, denoted by a chat bubble symbol in the upper right section of SCI, is one method for SCI readers to provide such feedback. By joining the Smith + Crown mailing list, readers additionally can participate in future planned community engagement.
Top projects by funds raised
Projects with demonstrable adoption
Projects innovating in technological design, cryptoeconomic design, or regulatory approach
Projects recommended by the community
Project development, adoption, milestones
Demonstrated general and industry specific leadership ability
Evidence of the developer team’s capability
Misrepresentation of work history, credentials, experience or team capability
S+C’s tech experts have serious doubts about whether a feature is technologically possible
Project business plan or road map is wildly unrealistic
Lack of adoption given current stage of project
Analyst, industry specialist, project, or public feedback can prompt review of Signal status
S+C retains records for all Signals evaluations
Smith + Crown evaluate projects across the breadth of the cryptocurrency and digital asset space on the basis of meaningful engagement from the community, end users and prospects of driving the industry forward. Projects that successfully incentivise users, sufficiently so to motivate their onboarding, are usually a driving force for the industry in its relatively early days. Smith + Crown consider projects that come across our radar organically, in addition to persistent systematic surveying of the industry, and evaluate their capacity to impact the community broadly. If a project has an established, liquid market for its token, then analysts might well evaluate this project to see if there is adoption and traction—hopefully beyond secondary market trading. Other factors sometimes considered in sifting for Signal include:
- Market Cap or Funds Raised
Large raises or implied valuation sometimes indicate that a project’s value proposition has mass appeal or is one key investors are optimistic about. While actual project quality does not always match perceptions, market cap or funds raised are typically sufficient reason to investigate a project further.
High adoption may also indicate that a project is doing something worth looking into more. Some Signals sustain the development of meaningful technological innovations independent of a token sale or private investors—open source projects with passionate volunteer developers releasing protocols with meaningful adoption are on Smith + Crown’s radar too.
Smith + Crown reviews hundreds of projects as part of weekly advisory, advocacy and research routines. As such, the team develops well-supported views on when a project represents a unique approach to cryptoeconomic design, novel industry solution, or meaningful technical innovation. Projects team members suspect stand out in these areas are always subject to further review for Signals inclusion.
- Suggested Projects
In such a broad industry, even a committed team of researchers can have its blindspots. Smith + Crown values its community and takes feedback seriously, making a point to review or reconsider projects the community at large feels are overlooked.
Nomination for Signals review does not guarantee a spot on SCI. Before inclusion in SCI, projects nominated for Signals status are subject to subsequent internal review by Smith + Crown analysts. After inclusion in SCI, a project’s Signal status must be maintained: Smith + Crown may, at any time, conclude that current pertinent factors, as brought to attention internally or externally, constitute sufficient grounds for status degradation.
All Signal’s candidates receive Signals evaluations as part of Smith + Crown’s internal review for SCI inclusion. Analysts consider the following project aspects as part of reaching their overall conclusion in Table 3 below:
No one factor is typically independently sufficient for a project’s inclusion or exclusion. A project’s ambitions, the broader industry trends, competitor status, and regulatory direction are all context that can add weight to particular factors shaping analysts’ final judgments on whether to recommend the project or not. Regardless of judgment, all Signals evaluations are documented and recorded in Smith + Crown’s proprietary database.
To progress to the drafting stage, a Signals candidate must either have:
- At least two analysts independently strongly recommend the candidate after having completed and documented a Signals evaluation.
- Smith + Crown’s research department reaches consensus on the project’s inclusion during dedicated quarterly meetings. Projects must be strongly recommended by an analyst after completing and documenting a Signals evaluation to progress in this manner.
Analysts research and write project profiles for each Signals candidate selected through the aforementioned process. Subject experts and developmental editors support profile writers—a project’s preliminary status as Signal is subject to further critical scrutiny by all such personnel, and is always subject to revision in light of factors uncovered throughout the writing process. The research department as a whole is responsible for discussing and documenting grounds for change in status. Completed profiles are reviewed by additional analysts before publication. After review, a project profile and Signal status announcement are simultaneously released on SCI.
Post publication, all Signals are open to revisions in status based on newly available evidence or changing circumstances. Smith + Crown can initiate review internally, typically done on the basis of industry and project monitoring. Smith + Crown also initiates review through direct contact by affected projects, academic or legal experts, and in response to feedback submitted by the SCI community.
Basis for change in Signal status include, but are not limited to:
- Evidence of fraud
- Missed Milestones
- Lack of progress
- Change of leadership
- Loss of key initial personnel
- Evidence of critical security breaches
Signal status is always considered holistically; new information pertinent for change in Signals status on the above grounds may not be independently sufficient for change in status, and, as with initial Signals’ evaluations, the project’s ambitions, broader industry trends, competitor status, and regulatory direction are all context that lend weight to the factors shaping Smith + Crown’s decision to maintain or change a project’s status.
SCI displays a variety of live cryptoasset market data, allowing users to track price and volume movements. Data is sourced primarily from the Nomics API, which integrates directly with top exchanges to provide an accurate view of the market.
Market Capitalization is the Circulating Supply multiplied by Current Price of a cryptoasset and is roughly analogous to the identically-named metric in equity markets. While market cap is the most frequent metric used to measure the value and network activity of public cryptoassets, it is imperfect for several reasons:
- Varying inflation schedules - Token holders may face differing rates of dilution as inflation schedules vary widely between tokens, which affects both current and implied future market cap. Supply is generally governed by a mix of creation at genesis, algorithmic issuance, and stakeholder voting. Increasing the token supply could artificially raise the market cap without changing the price or value of the network. Given these differences, it is often difficult to directly compare current market caps for dissimilar projects. In contrast, supply of an equity is effectively fixed (including splits), such that company market caps can be directly compared.
- Lost coins and discrepancies in circulating supply - The owners of some tokens, particularly from early Bitcoin mining and trading, may have lost private keys that render them permanently unrecoverable. These tokens are effectively removed from the circulating supply for price discovery purposes, but are counted as part of the supply in the standard calculation of Market Cap.
- Liquidity - Tokens with low liquidity and thinly traded markets may have artificially inflated market caps. Consider a token with a current price of $1,10 million circulating tokens, and thus a $10 million market cap. If there is little actual trading of the token and the order book has few open buy orders, a large holder may not be able to liquidate their position at or near the $1 price/$10 million implied token supply valuation, and may suffer significant slippage in the process. Since the market cap calculation only considers the last price, not the amount traded at that price, illiquid markets can skew the market cap figure.
While market cap is an imperfect metric as translated from the world of traditional equity, it does serve as a useful baseline for approximate valuation and an ordinal ranking of cryptoasset valuations. An array of emerging alternatives are discussed in this Nomics blog post, including “fully diluted market cap” with circulating supply normalized as the estimated value in 2050, and “realized value” to disregard lost coins by considering the exchange rate at which the token was last moved on-chain. Smith + Crown endeavors to provide and contextualize these evolving metrics to better characterize a cryptoasset’s total value.
Note: In the Markets table, the “Dominant Asset” statistic represents the percentage of the group’s total market cap that the largest assets accounts for.
A key indicator of a cryptoasset market’s strength is the volume, or total value of associated trades. Since trading activity is highly dispersed across many venues, Smith + Crown present a compiled view for each asset. However, many exchanges have an incentive to misrepresent their volume numbers in order to attract new customers. Further, the reporting methodology for exchanges varies widely; some provide granular trade-level data through an open API, while others only report summary statistics. Exchanges may also engage in wash trading or other market manipulation tactics. Bitwise, a Bitcoin ETF applicant, conducted a comprehensive study of exchange behavior, aiming to identify real volume by examining order book structure and comparing reported volume to website traffic. In brief, the report found that up to 95% of volume reported on CoinMarketCap was suspect, and identified a group of 10 exchanges offering more transparent and accurate volume data. As such, all reported volume data must be considered in context. All volume figures within SCI include all exchanges integrated with Nomics.
Note: In the Markets table, the “% Change Volume X 24 Hour” represents the change in total volume between 24 and 48 hours ago and the current time and 24 hours ago. This is effectively a rolling daily delta for volume.
SCI displays a variety project data, providing users historical information on the nature and extent of project fundraising, as well as project’s current state of development and industry classification. Data for these fields is primarily sourced directly from project materials or communications, with analysts judgments informing some indicators.
• A separate measurement from project adoption
• S+C includes several blockchain specific industries, such as smart contract platforms and general purpose cryptocurrencies
In terms of displayed fields, Smith + Crown’s classification of project status recognizes the following project states: live, testnet, public demo, private demo, outline. A project is described as...
- Live: when the primary offering is made fully available to a project’s intended user base.
- Testnet: when an alternative chain designed for features testing is made fully available to the project’s intended users.
- Public Demo: when a project’s primary offering or sufficient portion thereof is claimed to be available to the public. This category does not include projects who make a primary offering available to the general public for a limited time at an event or venue.
- Private Demo: when a project’s primary offering or sufficient portion thereof is claimed to be available to investors, advisors, or is made available at an event for a limited period.
- Outline: when a project’s primary offering is described in a project’s documentation, and no other category applies.
In this manner, the concept of a project’s primary offering plays a major role in classifying a project’s current status. Broadly speaking, project primary offerings typically fall into one of three categories, as outlined in Table 6.
• Token Launched
• Token Usable
• Live (no token)
• Live & Tokenized
As the framework suggests, the notion of a ‘primary offering’ is project-sensitive, with an analyst’s judgment that a product B constitutes part of project A’s primary offering grounded in her understanding of both a project’s stated goals and stated means for achieving those goals, as are found in a project’s whitepaper, website, blog, or communications to Smith + Crown.
Note also that Smith + Crown does not equate project status with token status. A project’s cryptoasset can be traded while a project is still developing the networks, Dapps, user-base, or industry relationships whose value the cryptoasset may (or may not) capture. While the incentive structure a cryptoeconomic system provides can be a necessary component of a project’s feature set, the release of a cryptoasset alone is typically insufficient for a change in project status.
The ‘Funding’ field indicates the total amount a project raised in its token sale and equity funding events. Values are given in the USD, converted from cryptocurrency using the relevant exchange rate at the conclusion of the sale.
There have been many efforts to classify startups and blockchain projects by industry. Outlier Venture’s token ecosystem classification is particularly insightful. Classification serves multiple purposes, including helping cluster projects working on similar problems, identifying peer companies, and tracking growth over time. This helps identify which sectors are particularly dynamic, indicating a shared intuition of a particularly lucrative blockchain application.
Industry classification is not as straightforward as might initially appear. The most comprehensive efforts to classify business activity are usually undertaken by governments. In the United States, industries must register according to the NAICS code system, which generally resembles the International Industry Classification system.
There is one key decision in such classifications that the lay observer usually misses. Most systems categorize companies according to their means of production rather than their product. An example would be how Uber is classified as an information company rather than a transportation one, or Airbnb as an information company rather than an accommodation business.
From the standpoint of governments, this makes sense. Means of production is a better indicator of employment needs and industrial input–two areas over which governments have immense influence. Manufacturing cars requires different types of workers and resources than designing software to support car manufacturers. It has the added (and unintended) benefit of remaining mostly stable on a per-company basis: the software company could begin selling software to distributors (a different sector).
This approach also has several drawbacks: it is very poor at making sense of the technology sector, particularly information technology and its impacts throughout the economy. Under current production-oriented classification (like the NAICS system), a software company solely supporting car manufacturers would be considered a software company. If a car manufacturer acquires that company to perform the same services in-house, it would seem like the manufacturing sector grew and the software sector shrunk.
In addition, the actual products are important to keep track of as a means of identifying market changes. Governments have the luxury of tracking this through product sales numbers, but this isn’t always feasible. It also makes it difficult for companies to identify competitors or strategic threats. Airbnb undoubtedly has an impact on the accommodations industry. Finally, the commitment of means of production is also likely short-lived. On a certain level, every company is an information company.
• Better reflects industrial inputs (land, energy, materials)
• Classification can follow companies across multiple markets
• Difficult to answer business strategy questions, such as identifying competitors or threats
• Cannot make sense of wide-scale industry transformation
Smith + Crown has considered this issue carefully in developing estimations of blockchain-related activity across a range of industries and sectors, and implemented the following approach to classification.
- Classify according to target market. What industry is the company trying to disrupt? In other words, if it is a payment system for marijuana, it operates in the drugs and alcohol sector.
- Classify according to several new sectors that are specific to the blockchain industry, including smart contract platforms and prediction markets.
- If the project’s market is industry agnostic, classify according to its product. For example, if it is a general purpose payment system, it operates in payment processing sector.
- Finally, use the NAICS code industry system as a backend and maintain a cross-walk to new industry and sector classifications.
Smith + Crown has done so for the following reasons:
- Classification by means of production would be very difficult and usually arbitrary. Ultimately, most companies are applying blockchain technology in one of several ways: an immutable and auditable ledger, a digital currency, autonomous and auditable software, and an economic system for crowd contributions. Even these distinctions are rough and not comprehensive.
- It is a more coherent story of disruption. Classification by (arbitrarily chosen) means of production would not shed much insight into how blockchain technology is actually being used to disrupt traditional industries.
- It helps identify peers and competitors. This is important for assessing the relative merits of different tokens.
- It is more straightforward. Today, most blockchain companies are small. While they will pivot or expand their services, in their early stages they have a distinct focus that is usually easy to identify.