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Enigma Catalyst Project and ICO Evaluation



The following is a detailed and objective review of the Enigma Catalyst project. The Enigma Catalyst is a platform that empowers anyone to build their own crypto hedge fund. Catalyst provides crypto-relevant data and research tools for quantitative traders to build, test and master investment strategies.

Catalyst has two core components, which will be built sequentially over the next three years. These are:


  1. A Quant-trading platform which enables quants to be built and master trading strategies created using relevant crypto-financial data from day 1 (Enigma creates the initial data sets).
  2. A data marketplace for crypto-financial data which enables community participants (companies with data and data crawlers) to offer valuable data sets to the quants in exchange for Catalyst tokens.

Catalyst will use a decentralized exchange protocol, an off chain solution, that enables the users to make fast cross-chain transfers while maintaining full custody of their assets (not having to trust a third party).

The team’s long-term vision is to build an open data marketplace for all types of data. In the beginning the focus will be on financial data, which will immediately serve the Catalyst community.

The team mostly consists of MIT graduates and is well backed mostly by well-known non-crypto VCs. The ICO will take place on the 21st of August 2017. The tokens have a strong affiliation to the success of the platform.

The market potential is huge. Let’s go!

enigma

The Team

Most of the team members and advisors are MIT grads.

The cofounders Guy Zyskind and Can Kisagun were the cofounders of the Enigma project which started in 2014 as a solution for “homomorphic” encryption: A way to encrypt data such that it can be shared with a third party and used in computations without it ever being decrypted. For more information, refer to this publication from Wired.

Their advisory board includes:

Prof. Alex Pentland, a Director at MIT Media Lab and a board member at Google, United Nations and Telefonica.

Justin Lent, a former director of hedge fund development at Quantopian. Quantopian is a leading platform which provides traders with tools to build, test and execute trading strategies. This is similar to Enigma’s aims, only not in the crypto world.

There is more about the other team members and advisory board on Enigma’s website.

INVESTORS and VCs

The Enigma project is well backed by a few well known non-Crypto VCs and one Crypto VC who also backed other known crypto projects like KRAKEN, RIPPLE, BITPAY, SHPESHIFT, ZCASH and more.

Non crypto VCs: FLOODGATE, FLYBRIDGE CAPITAL PARTNERS, CONVERGE, HEROIC VENTURES.

One crypto VC: DIGITAL CURRENCY GROUP.

Whitepaper

The team has released two whitepapers.

These are the Enigma whitepaper, for the data marketplace (Catalyst 2.0) and the Catalyst whitepaper, for the trading platform (Catalyst 1.0).

Both are very detailed and well written and the following are the key features of both platforms

Catalyst 1.0 Quant-trading platform for crypto assets (Q1 2018)

Quoted from the whitepaper: “Inspired by the rapid growth and proliferation of crypto-assets, we propose Catalyst – an off-chain decentralized exchange protocol coupled with the first investment platform focused on enabling developers to build, test, and execute micro crypto-funds. Our long term vision is to create a marketplace of trading strategies that non-developers can use to invest in the wisdom of the quants.”

Trader’s incentive

  • A complete toolchain that makes developing and testing trading strategies easy
  • The back testing engine is based on Zipline, a leading open-source algorithmic trading simulator written in Python. Using an upgraded version of Zipline will enable more than 100,000 developers to reuse their regular stock market strategies on the Catalyst platform
  • Accessibility for the algorithm to choose the lowest/highest trade available from many exchanges simultaneously
  • High trading velocity
  • Accessibility for the algorithm to broad crypto Data sets which will automatically be updated (price data, sentiment data, social networking data, and more)
  • Fees from raised funds
  • Hiding the trading technique. Only performance and strategy is revealed.

Investor’s incentive

  • Investing in an algo trading in a successful and tested fund
  • Rank mechanism of historical performance for the trader’s mini funds dealing with various market conditions
    • Ranking system will include: standard return and risk metrics, such as ROI, Sharpe ratio, alpha,beta and max drawdown

Curator’s incentive

  • Writing crawlers that curate data
  • Fees, depending on how frequently the data sets are used

Catalyst 2.0 – Data marketplace (Q1 2019)

The idea of a decentralized data marketplace is driven by the original Enigma whitepaper.

The data marketplace will be created around crypto investment data. The Quant platform will create the demand for the data and will fix one side of the marketplace.

The Catalyst decentralized data marketplace will orchestrate the collection and transaction of additional data sets that drive crypto-investment strategies. Community members will be provided with instructions to create data sets, either to use internally or license to quants on Catalyst. These datasets will be accessed via smart contracts in exchange for ECAT tokens. Data providers will own their own data at all times. In time, Catalyst datasets will be moved to the decentralized data marketplace as well.

Market Potential

The Crypto Market evaluation is currently around 100 billion USD with a 24 hours volume of around 2.5 billion USD for the top 10 crypto coins.

By far, most of the crypto owners are here for the profit potential.

I would agree that we are in a bubble situation for the short term, but for the long term, I think that we will see a growing decentralized asset market.

A decentralized platform that serves as a one stop for developing and testing algorithmic trading strategies is needed.

The project is aiming for the long term story by attracting traders and data curators to a decentralized platform. And for the longer term the project aims to serve as an all data marketplace (beyond the crypto world).

In my understanding, if the Catalyst platform succeeds, the sky is the limit for the market potential, meaning an exponential growth.

Road Map

An alpha version of the platform was released recently. Developers can now build and test their investment techniques using data from the Poloniex exchange (currently: USDT_BTC, USDT_DASH, USDT_ETC, USDT_ETH, USDT_LTC, USDT_NXT, USDT_REP, USDT_STR, USDT_XMR, USDT_XRP, and USDT_ZEC).

Q2-Q3 2018, as fund leader’s records start to become clear, the company hopes to open the platform to outside investors, letting them place investments with the funds of their choice.

Q1 2019, Launch of the Data Marketplace

Community

A Slack community of currently more than 1,000 members is growing by the day.

A Bitcointalk thread which has low activity, but has good comments about the project from experienced community members. The team announced a bounty program for you to spread their word.

 ICO (ECAT token)

There is a strong relationship between the success of the platform and the rise in the ECAT token value. ECAT tokens will have to be consumed by the quants in order for them to access the data they want. ECAT tokens will also be used to attract quants to the platform. Reward tokens are provided to quants with winning strategies.

ICO Terms

Date:  21st of August

Token distribution:

A fixed supply of one hundred million (100M) tokens, to be allocated as follows:

  • 50% to be made available in the initial token sale (only to be used for operations)
  • 25% retained as incentives for the Catalyst community
  • 25% retained by Enigma

Funds allocation:

  • 60% for product and technology development
  • 15%for blockchain research
  • 10%for marketing purposes
  • 10%for operations
  • 5%for legal and administrative costs

Max Cap for the token sale (50% of all created tokens): 30 million dollars, one ECAT=0.6$

CryptoPotato ICO Evaluation

Key for the evaluation:

IF = Impact Factor

WA = Weighted Average

ico review

Team & Advisory board: Broad experience and knowledge in necessary fields, backed by well-known top VCs: Score 9 IF 5 WA 2.05

Stage of the project: Alpha version released, Q1 2018 Catalyst platform is live, Q1 2019 Data marketplace is live: Score 9 IF 1 WA 0.41

Project potential: Exponential growth potential, decentralized platform connects traders, data curators and investors: Score 8 IF 3 WA 1.09

Community and Media: ~2000 Tweeter followers, ~1100 Slack members, great ongoing bounty program (fast community growth): Score 8 IF 2 WA 0.73

Token use: ECAT is needed to access the data on the platform: Score 8.5 IF 3 WA 1.16

ICO: Cap, Distribution, Inflation Fixed amount, 50% distributed on token sale, ongoing pre-sale (min 100k$), max cap: 30 million $: Score 7.5 IF 5 WA 1.7

Whitepaper: Two well detailed whitepapers for catalyst platform 1.0 (Algo-trading platform) & catalyst platform 2.0 (Data marketplace): Score 9 IF 1 WA 0.41

Backend: code, Technology Novel idea for data storage on the cloud, using the blockchain (announced 2015), python sdk, cross-chains atomic swaps: Score 8.5 IF 2 WA 0.77

CryptoPotato Enigma Catalyst ICO Score: 8.32

enigma_score

Conclusion

The team has built a win-win situation for all future platform users – traders, investors, data makers. The market potential is huge and in my understanding will get bigger over time. The idea and the way it is planned to be implemented is unique among other crypto projects. The team is strong with valuable experience and knowledge in the necessary fields and is backed by strong VCs. The team’s revenue from building the platform is their stake of the tokens, meaning, the team has an incentive to appreciate the value of the ECAT token.

PROS:

  • Promising leading team and advisors
  • Huge market potential
  • The idea solves a current problem in the Crypto trading world
  • Alpha version of the platform released, project ahead of schedule
  • Strong relationship between the success of the platform and the value of the token

CONS:

  • 30 MILLION USD token sale cap is a bit high
  • Small community compared to other projects (gets bigger by the day)

For more information

  • Enigma Catalyst website
  • Blog post regarding Project’s long-term vision, decentralized Data Marketplace,
  • Token sale Info
  • Enigma Catalyst’s alpha version.



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