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.
This is part of a larger article which has been 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 (This section)
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.
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.
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
