Crypto Teams Need to Communicate Better, and a New Segment: Big Drama in Smallcap Land (Zoin and Sumokoin) QuantLayer Follow Aug 22, 2018 · 32 min read

Here’s a transcript of QuantLayer Crypto Podcast #5.

We talk about the current bearish sentiment of the market and how exchanges and coin teams can better communicate with their customers. We talk about how exchanges can add predictability to their platforms through API versioning and coin teams can flag important news they need to share with their coin holders.

We also start a new segment called Big Drama in Smallcap Land where we dissect the persistent drama in the world of Smallcap crypto clients. This week we talk about Zoin’s ($ZOI) new lead developer not having development experience and Sumokoin ($SUMO), a strange tale of missed opportunity. Between market and technical topic this episode is a good mix of all the things we love about crypto.

The episode in its entirety can be listened to here:

Quantlayer is a software consultancy based in Brooklyn New York. All opinions expressed by podcast guests are solely there own opinions and do not reflect the opinions of Quantlayer. The information presented should not be construed as investment advice. Guests may maintain positions and assets mentioned in the podcast.

Vikram: Hey everybody you got Quantlayer here, Vikram speaking and we also have Faizaan also known as the Wizard.

Faizaan: Hello.

Vikram: How’s it going Faizaan, what are you up to?

Faizaan: I’m good I just got back from about 10 days in Toronto. Just visiting family.

Vikram: Awesome.

Faizaan: What about you?

Vikram: Yes I was in — did a little bit of travel myself last week. I was in DC and Baltimore and finally back in town. It feels good to be in New York. It’s a nice summer.

Faizaan: Nice.

Vikram: Yes so one thing we were interested in talking about today, I thought we would start off with just high-level commentary on the state of the market. Since the last podcast pretty much everything has taken a big hit. Bitcoin was in the 7,000–8,000 range and now it’s in the 6,000 range. Ethereum has taken a big hit too. I think there were some concerns about there being a big hack. Like another exchange had gotten hacked, but after there was some SEC commentary last week where an SEC Commissioner came out and said that Ethereum and bitcoin are not securities. I would think that was a bigger news for Ethereum than it was bitcoin. I think everyone had assumed that bitcoin would never be categorized as security.

Faizaan: Yes.

Vikram: It was pretty big deal for Ethereum and it popped a little bit the day of the announcement. I think may be 8–10 percent something like that and then afterward it sold off. You know I talked to a good friend of mine. He’s an investor in the space. He had asked me aren’t you surprised that it had popped a bit more? Yes, I don’t know. I think it points to there being a pretty strong bear market right now. There’s not much in the way of good news that’s going to be pushing a lot of these coins. We saw Zcash get added to Gemini and now it’s given back that whole trend. It popped at 30 percent or something like that the day it happened and then now it sold back.

Faizaan: Yes.

Vikram: Back to where it was before, but yes it’s pretty bearish. You know on Twitter too you see just general sentiment. When I traded stocks you could kind of get a pretty solid view of stock3 sentiment based on what people were saying about it on Twitter and it’s even more so with crypto. You can very quickly I mean people getting pretty nasty matches with each other when things aren’t going so well. Where everyone is kind of like praising each other back in December-January I think people are very angry at each other. You see people leaving. You see all kinds of crazy threats so I don’t know.

Faizaan: Wow.

Vikram: The state of the market right now just seems pretty pretty negative.

Faizaan: Are you finding that that’s the case moving you know beyond some of the big currency is to even the ICO market and token market.

Vikram: Yes, I think so. I think there’s there was a whole lot of exuberance around ICOs before and that same group of people I think they feel like they’ve gotten burned by a lot of these ICOs so.

Faizaan: Yes.

Vikram: You see the reason that the Ethereum ruling was a shock to people is kind of related to that. Basically what you see is professional investors buying a stake in a token probably at a very depressed price you know. Say I’m just going to make these numbers up. Let’s say they buy them at five-ten cents and then the coin company ends up getting their token listed on one of these exchanges and they start you know they would maybe start trading at 20–30 cents. Already that’s a ridiculous return for the initial investor.

The only people buying these tokens are the retail crowd now or the people that really wanted to be involved in the ICO, but couldn’t get involved. Maybe some of them. I think people are realizing that something like that is happening and things like that are happening so I get the sense that there is a lot of negativity and skepticism around the space. Probably should have shown.

Faizaan: We are also seeing more regulatory action from all of the agencies at least in North America where before I think a lot of ICOs were going on and on unimpeded. Now some of the earlier ones are being called out. Maybe there’s just a little more trepidation around what is a legitimate versus non-legitimate ICO.

Vikram: Yes, yes, that’s probably fair. I mean we discussed this last time too when we went to that Coinlist event and we met with those lawyers. You know what does it mean for us to do an ICO? Like we don’t want to necessarily do one in the US because we don’t know what the regulatory environment is like. That probably has spread to other companies and also other retail traders as well. Yes, the over all state of the market is just pretty pretty bearish, pretty negative. That’s fine.

You know these things — if bitcoin and the other coins trade like commodities. You see stuff like this all the time. Oil has gone through peaks and troughs since day one so once activity picks up again and you see these coins start to have a little life you see like the best of BridgeCoins starting to gain traction. I think that will be a sign of when things will pick up again. One thing that’s a little different though versus other bear market cycles is that you know a lot of these teams have raised capital so they have capital now and then if they manage their treasury okay meaning they didn’t store it in their token a 100 percent or you know didn’t store at all in Ethereum. They have actual dollars to spend on additional feature development, additional marketing, and things like that. It will be interesting to see like a year from now.

Faizaan: They should be able to.

Vikram: Where they are pretty substantial bear market if they did if they’re not just holding in their original token.

Faizaan: Yes, exactly.

Vikram: You mentioned to me earlier today that Square got their bit license so this is a big deal.

Faizaan: Yes, yes a pretty big deal. You’re seeing markets rally a little bit on it so I think Coinbase and Gemini had been a couple of the firms that had the bit license. New York is known to not hand out this bit license, that you know gratuitously so the fact that Square got it and the fact that the Square App is pretty sweet to use, the Cash App and the fact that Jack Dorsey, founder of Square and Twitter has been very vocal about bitcoin has given this minimarket rally some legs. I think that because it will be easier now for New York residents to buy bitcoin in the Cash App, I think there are some view that that will probably be good for bitcoin.

Vikram: Yes, because I mean looking at you know Coinbase and Gemini they were new entrants primarily for the purpose of buying and selling crypto currencies whereas Square is pretty established both for money transfer, but also as a point of sale for merchants and so I think that’s a big deal to have not just a place to buy bitcoin, but potentially being able to spend it or bitcoin or other currencies without having to you know someone like at Coinbase going to have to find merchants to.

Faizaan: Yes I think that’s totally right. The fact that we have been able to use bitcoin for Square and cash type transaction is pretty good.

Vikram: Yes.

Faizaan: I think you were mentioning too I noticed that we were talking about Coinbase and so they decided to list Ethereum Classic ($ETC).

Vikram: Yes, they did and that’s any new listing on Coinbase is always a big deal because they list so few coins, but they’re one of the main channels in which people at least in the US move Fiat into crypto so any new listing usually results in I think a pretty, an increased amount of interest in that coin so. Adding Ethereum Classic is a big deal. What do you think are the — like there must be simple and political ramifications with having both Ethereum and Ethereum Classic.

Faizaan: Yes, so in Ethereum had forked into Ethereum and Ethereum classic after the Dow hack last year. Basically the two sides were her Ethereum classic side said you know we don’t want to be part of the Dow hack. The victims in the Dow hack wanted to get their funds back and the problem with that is it if that set some kind of president anytime there’s some kind of hack and some funds are lost or stolen. It gives the victim some right to recourse. The Ethereum Classic people said hey look this is, we want to Ethereum to be totally decentralized and uncensorable.

The fact that you can recover funds through for the Dow hack means that some kind of censorship. Although the motives are good like you don’t want people’s funds who are stolen to be you know totally left on the sideline, but just philosophically they’re two different views. The current state of Ethereum.

Vikram: Right.

Faizaan: Is that they don’t want it to become a president so they’re going to you know not let the slope get slippery. I think that’s the road they’re going to try to take. As far as political ramifications within Coinbase if you held a decent amount of Ethereum through the fork in Coinbase. The same thing happened with like bitcoin and bitcoin cash. You want to be able to get access to that a Ethereum Classic in the same way that if you held bitcoin through I think it was August 2017, you wanted to get access to your bitcoin cash.

Again it could be pretty significant because I think like when bitcoin cash started trading it was like you know at $2,000-$3,000 per coin so same thing with Ethereum Classic. There were a bunch of people holding it, holding Ethereum so wanted to make sure that they would get their Ethereum Classic. My guess is Coinbase had to do that for legal reasons as well. Another player who’s pretty bullish on Ethereum Classic is Barry Silbert through his Digital Currency Group. This is a company, I think they’re based in New York and they offer index funds for accredited investors for different crypto assets so if you don’t want to buy bitcoin directly you can buy it through his fund and so they launched a bitcoin fund. They also launched an Ethereum Classic fund. I think they have a Zcash fund.

They actually just recently launched a ZenCash fund. ZenCash is kind of is a privacy layer coin that is looking to. I mean it’s pretty small. It’s like maybe a $100 million market cap. They have these things called Super Notes coming out this summer and those will be basically like Master Notes. Anyway, so he’s been pretty vocal about Ethereum Classic so I bet he probably played some kind of role there too.

Vikram: Shifting gears a little bit into some more technical topics so you know with our platform that we’ve been working on one of the things that we do is track the APIs of a lot of these exchanges to try and catch any meaningful events, listings, D listings. Wallets sometimes go down that sort of thing. We’ve been seeing some interesting behavior from both I believe it’s pronounced Zaif, Z-A-I-F and Cryptopia who are based out of New Zealand. Can you talk a little bit about what’s been happening with their API?

Faizaan: Yes, so Zaif is Japan-based, Cryptopia is New Zealand-based. We’re not calling those two out specifically. It’s just we see a lot of exchanges do these kinds of things. We watch these exchanges for as you mentioned listings, D listings while it’s going off-line. While it’s going on automated status and you can usually get pretty solid trade ideas out of this. If you care a lot about a particular coin and you see that you have some important trade coming up and you see their wallet is going to be off-line at a particular exchange you want to get your coins off that exchange and get it to a new exchange if the trade is important to you. You see coins doing air drops and things like that and often an exchange will shut down trading in that particular coin so you don’t want to miss out on a trade just because you didn’t know that the wallet was off-line or whatever.

Vikram: One thing we noticed with Zaif and Cryptopia is they’re making some modifications to their API, which makes it difficult to know what is going on. What I mean by that is so Zaif for example was, they were adding these pairs of tokens that don’t actually exist. It sounds there. It looked like they were kind of test tokens, you know made up names basically and these don’t exist, but our system was picking them up as being added or removed and it would happen regularly. You know every as often as we checked these APIs. That was a little suspicious so we decided to look into it and we can fix this. You know we can just ignore the particular names of these, the pairs so that it doesn’t cause an issue on the platform for the users, but the exchanges typically don’t have a standardized way of delivering price data to the users. Also the status of a wallet to users and so forth so they’re all a little different.

Cryptopia was also changing their API response format so our system was picking up things that had changed when it actually hadn’t changed. For those more interested on the technical side, you know some of these exchanges will send back 200 responses when they’re an error or they’ll send, they want an error message when there are successes, but just their format of how they respond to your API request can often be just totally out of sync with how it should be done. You know I just thought this was interesting from the perspective of how exchanges might architect their price data a little better and their status of the coins that they host a little better. You know what you think?

Faizaan: Yes because especially as more and more capital is flowing through these exchanges and they’re more critical to people just financial operations, standardization and predictability is really important because you don’t want to be surprised by a wallet going down or a coin being unavailable if you have you know a big trade you’ve put on or just a lot of capital on a given exchange. I think it’s just part of the market maturing where some standards and then predictability is going to have to come to a lot of these APIs.

Vikram: Yes, I mean what kind of standards do you think would be good for this kind of use case?

Faizaan: I mean off the top of my head I think you know most of these exchanges are showing the same stuff, like price data, beta ask, spreads. That sort of thing. Just standardizing the format would be very useful. Right now the other thing is that everything is like you don’t know when an exchange is going to change their API format. Just simple things like having versioning, having clear timelines of when APA changeovers are going to happen.

What it looks like is happening is for some of these smaller exchanges they’re doing a lot of trial and error in production so I think as they grow they’re going to have to shift to just having more established procedures around having multiple environments. You’re not rolling stuff in their production until it’s like thoroughly tried and tested. Really especially not experimenting with any sort of test data because we don’t want people making financial moves based on something they thought was really happening.

Vikram: Right.

Faizaan: When it wasn’t. I think a lot of these APIs also they’re available as a you know rest APIs. You can hit them on a given interval, but if you look at you know exchanges in the traditional markets they have various ways via their socket. There is a fixed protocol because they’re streaming so much data they have to be able to stream it to you in something much more efficient.

I think we’ll need to see these exchanges providing data feeds that are little more, they’re easier to consume like large amounts of data, but these are all solvable problems I think. A lot of the exchanges are very new especially for the amount of capital they have moving through them and their team size.

We’ll see it mature, but in the meantime I think it’s good to just be wary of even if you see an exchange that has a lot of coins, it’s doing a lot of volume, it may still only be a year and a half with company with a handful of developers and some of the teething pains that come with that.

Vikram: Yes, you mentioned versioning earlier so typically you know as you worked with different kinds of software teams, different kinds of management teams. I’ll probably echo what you just said, you know maybe, you know some of them do see the importance of versioning your API. A lot of them don’t.

Faizaan: Yes.

Vikram: You know it takes a little bit of work to version your API. You got to set it up and then when you actually migrate to a new version that’s a good deal work you got to let your users know, you have a whole bunch of stuff you need to do on the back end. What are, like what are your thoughts on that? What are some ways to handle that versioning well?

Faizaan: Yes so I think there’s a continuum on one hand you just make changes whenever and just push it to production. You know that’s something like a small start up where the person that’s working on the front and in the backend and there’s no third-party user through the API. That’s perfectly fine. On the other end when you have something that’s a critical piece of software and I would argue exchange pricing information and especially like order execution stuff is you know about as critical as it gets at least in financial markets.

Everything needs to be predictable. Like that’s the key. You can’t be surprised so versioning in terms of frequency I think it just depends. I think in these early stages it’s probably okay to version on a more frequent basis, but you need to have a fixed release cycle and you need to have planned ahead what’s coming next. Now for things like bug fixes, I think it just depends. If you can make a change without breaking the previous behavior I think it’s okay to roll that out sooner specially if it fixes a problem. Essentially if you’re breaking the existing behavior you’ve got to prepare users for it with some lead-time.

Vikram: Are there any open source projects you think that do versioning pretty well? Like Ember has some kind of six week release cycle right?

Faizaan: Yes, yes exactly so yes we use Ember GS for a lot of our front end work and that’s exactly right. They have a six-week release cycle. They don’t make breaking changes on major versions. They just deprecate everything so you will essentially be just keep getting warnings if you’re doing things in a way that’s going to break and as long as you silence all of those warnings before switching up a major version everything should work fine.

The other thing they do is yes they release every six weeks, but then they also have a long-term supported releases so if you’re not on pace to keep upgrading every six weeks there’s more infrequent intervals that still capture all of the major updates that you can follow. That just gets back to the they’re able to make a lot of changes. Ember has you know evolved to dramatically from when we first started using it, but by introducing that element of predictability you can sort of choose to keep up at your own pace and what suits your suits business and especially in financial markets I think that’s going to be critical.

Vikram: Yes, that’s really interesting. I wonder if there’s some kind of corollary with these crypto teams because I’ll give you an example. I had been staking this proof of state coin called Blocknet which was a while back. Blocknet basically is a decentralized exchange and when you stake you help support some of those functions.

I was staking and I wasn’t reading through the chat rooms that regularly and when I was staking I probably would get a payout every I don’t know like a week or so. It was pretty small. I just wanted to see what staking was like and I thought that would be a good bet to try out. I get a payout once a week and then you know I think I went on vacation and then I came back and I saw that I had I was getting payouts like every 10 minutes. I thought wait something has to be wrong.

There’s no way that my machine is doing this. There is no way this is possible so I went back on like their discord looked into it and it turned out that they had actually, there was some fork that happened in between at some point between when I had left and when I checked the payouts. If I hadn’t looked into it and if I had just let it running I was basically mining the wrong chain and no one was mining that chain and as a result that’s why I was getting all of those payouts regularly.

Stuff like that like I wonder if there’s some way to be able to support because you can’t expect non-technical users to follow what’s going on exactly all of the time about these different coins. Like a wallet has to update automatically or they need a better roadmap of when these things are going to happen. I guess that gets harder if there’s like a tax on a coin because those aren’t predictable. Those would just happen randomly.

Faizaan: Yes like instances like that or what happened to you they have to become the exception rather than the rule or relatively common occurrence before I think a lot of big institutions will feel safe. Like putting serious amounts of money into these sorts of things especially on behalf of say customers.

Vikram: Yes and even if there was like a services business you could build to help institutions stake their coins, run master nodes and things like that.

Faizaan: I mean one would argue it’s a great thing for a platform that sends out alerts to alert on.

Vikram: Very good in portfolio.

Faizaan: Maybe we will see this roll out in the next version or two.

Vikram: Yes.

Faizaan: There is a little section that I wanted to try out and we can try this out and see how you know how people like it. It’s called Big Drama on Smallcap Land and basically there’s always something going on in the Smallcap World. There’s two coins that I wanted to highlight over the last couple weeks has just been really interesting following these stories. One is called Zoin. It’s a fork, the ticker is ZOI.

It’s a fork of the Zcoin Protocol. It’s a Smallcap privacy coin. They introduced master nodes kind of recently like in the last few months. Pretty solid returns, 30 to 40 percent and it was run by a really solid lead developer, Jackieboy. I think that was his username.

He would always hit roadmaps. Always hit deadlines that are really nice looking desktop wallet. He sounded like he had a really solid understanding of economics too and on top of all this he was super available in his chat. You could just ask him questions directly and he would respond. A couple of months ago they announced that they’re going to be doing in airdrop for all of the current holders of Zoin for a new coin called NIX ($NIX).

NIX is a coin that enables privacy around atomic swaps. Basically you can swap bit coin for light coin over their privacy layer and it’s kind of like a master node. They call them ghost nodes, which enable this privacy layer so when they announced this I mean it wasn’t a bull market like the market has been on a downturn since, but it had something very similar feel to Z Classic ($ZCL), which had a monster run when they announced that they would be forking ZCL to bitcoin private. It went from like a couple of dollars to a couple of hundred dollars in a really short amount of time.

That was back when things were really bullish so the team probably, I think the investors in Zoin had expected something like this. Like they were hoping for like a massive run and the reason I know this is just that’s what people were talking about in their in the chat room like people are holding.

Vikram: That’s right.

Faizaan: They were hoping like oh this could become another ZCL right. It didn’t perform the way you would expect. It ran up a little bit into the fork date, maybe like two weeks before the fork date and then it sold off into the fork date. It sold off a ton and had gone to 250 before the fork and then like a couple of weeks before the fork then a couple of days before the fork it was down to 140 and right after the fork it just got destroyed.

Like it’s trading at $0.25-$0.30 right now. I remember the block it was at. I decided to just pull up Cryptopia and look at the order book. Cryptopia has this cool feature where you can look at an order book so you can go to a coin and see how many buy orders and sell orders they are. People typically look at this because if something has a ton of buys and not that many sells it gives you some indication that there are more buyers than sellers. A lot of this stuff is gamable so you can’t necessarily trust it.

Faizaan: Right.

Vikram: Yes.

Faizaan: About anything.

Vikram: Yes.

Faizaan: Publicly built like that.

Vikram: After a fork where you know there’s going to be a lot of sellers it is pretty meaningful because then you can just go look at the order book and see like oh how everybody just wants to sell. I think there’s Zoin block times two and a half minutes so it takes at least that to get from your desktop wallet because the none of exchanges support of the fork. Not fork sorry the airdrop.

Faizaan: Right.

Vikram: You had to actually have it on your desktop wallet at the certain block height. The moment that block height got hit you saw a ton of movement and people are just waiting for it. You can tell people probably just had their they had their address ready to go with a number of coins they’re going to send over and a block passes and they just click submit. At that moment like there are a ton of orders that went to Cryptopia.

It didn’t sell off like it took it was funny it took like two and a half minutes plus probably like 30 seconds to start selling off. Once it did it just got clobbered. This was an interesting story. You had to watch the Zoin team is not really going to be involved in the like the old Zoin team who is now the NIX team. They’re not going to be super involved in the future of Zoin.

I think they’re going to stay on as advisors whatever that means. Like this is very vague, but the new team, they joined Discord and they posted up I think Zoin posted a link to everyone bios. This is the stuff where it gets really interesting so the new team just seems really green. Like if you read through their chat, I was shocked by this. The newly proposed lead dev doesn’t have development experience.

Faizaan: Wow. Wait at all?

Vikram: Yes, yes at all. That’s why I thought okay maybe he means he doesn’t have crypto experience, which is totally reasonable, but still a little bit concerning. He literally doesn’t his bio says he’s interested in programming and has some experience with C Sharp and .Net something like that. That’s super concerning you had like Jackieboy who is awesome.

He hit all of his deadlines all the time and who was the former lead dev and now you have a lead dev that’s really green and doesn’t really have program experience. Even though he says he’s excited to learn and I think that’s fine at a certain level of developer, but on any software team I mean how would you feel about having a lead dev without program experience.

Faizaan: That would be I mean that’s alarming. That’s not.

Vikram: Right. I mean it’s ridiculous right? Am I crazy?

Faizaan: It’s ridiculous is what it is yes. You know in like traditional markets shareholders can like they can sue leadership if there’s just some horrible mishandling of the company right? Do I have that?

Vikram: Yes, for sure. I mean the board will get involved and hopefully take care of the issue before it comes to that, but if yes they can shareholder can to sue a company for sure.

Faizaan: We’re going to need to see some sort of like accountability of governance for crypto teams because the way it is right now is you bet on a good team and you hope that they stick with it, but if either of those two things are not true you just lose money and there’s really no recourse beyond that. I think especially in the ICO space we’ve seen this where you know people raise money and then just don’t execute. It will be interesting how that plays out.

Vikram: Yes, in their chat they had I mean they had a new channel called Meet the New Team and then they have a voting channel where they put up things for votes like they put about a few months ago when they were doing master nodes they wanted to know if people thought it should be like 10,000 coins-15,000–25,000 so they allow people to vote like that. The latest vote is do you want to allow this, the new proposed team to run with the coin? The votes open till next Saturday so we got another week or so, but it doesn’t I mean it looks like it’s going to go through. It’s like you know 200 votes to 20 nos, 200 yeses to like 20 nos.

Faizaan: Well you are in this weird situation if you’re a holder and a voter where even if you don’t feel that good about the team like a no vote would be even worse for the price right?

Vikram: Yes, it would look pretty bad. I’m they’re.

Faizaan: Potentially, yes.

Vikram: There’s only 200 people-ish that have voted so far and there’s definitely a few thousand in the chat. You know maybe those voting numbers will pickup, but this is the other thing about you know teams. It’s tough for teams to like get people to involve themselves in the coin. Like how do they give solid updates to users? They can’t really.

Faizaan: Yes.

Vikram: In general like you said that teams need some better basics like understanding economics and how coin supply affects coin values. How like you need a solid lead dev to run a project no matter how good the project.

Faizaan: That’s just true. That’s just true.

Vikram: That’s just true.

Faizaan: Period. Outside of crypto.

Vikram: Yes, outside of crypto.

Faizaan: That’s just true.

Vikram: It doesn’t matter who they are like they need to they should have cut teeth on some project right. You can’t like not have any programming experience.

Faizaan: Yes, computers, you got no computers.

Vikram: Right.

Faizaan: I was going to say.

Vikram: Hey. We’ll see.

Faizaan: Yes.

Vikram: We’ll see how that turns out. I’m a little surprised that the team like some people are saying. This was an exit scam and I don’t like doesn’t seem like it would be just on based on what the other what like Jackieboy and the rest of the team were like. I don’t yes I did get that sense from them.

Faizaan: Yes.

Vikram: It could just be like hey.

Faizaan: What’s the quote never attribute to mouse what like what can be attributed to incompetence or something like that?

Vikram: Yes, that’s right that’s right. That’s a good quote.

Faizaan: I think that that applies to a lot of the what you see in crypto is people go in with good intentions, but just they can’t execute especially at the bar that’s set for the amount of money there is.

Vikram: Right.

Faizaan: Right.

Vikram: I guess you see a lot of that in like broader software too.

Faizaan: Yes. Yes, there is definitely.

Vikram: The funniest thing on top of all this, this is a privacy claim so you know like we talked about before it’s not like you just you have a private coin, it’s private for life. You’re going to constantly be making changes to it, making sure different attack lectors get sealed, like new attack lectors will come. You’ll have to deal with those. Like it’s just insane to have a non-technical person be the technical lead.

Faizaan: Yes, agreed. The second coin you had mentioned was Sumo.

Vikram: Yes, Sumokoin so this was a Monero fork, Monero is another big privacy coin so the team came across my radar back in winter after I saw Kevin Rose. This is founder of Dig mentioned it at one point. He didn’t say to buy it or anything. He just said these are the coins I’m watching so the other coins I think I had already looked at and this was a new one. It’s a microcap so I thought I would take a look at it.

It seemed interesting like it’s a mission structure. Basically, the idea was like they wanted a predictable supply schedule, an omission schedule that would theoretically make the devs incentivized to keep working on it. They had to pre-mine, but the pre-mine wasn’t available immediately. Like it would be available in like little chunks. Like there was like a vesting period.

Kind of right? I took a look at this one and I don’t like this one was insane to me. They had a chat room. My first experience with the coin was going to their chat room. Their chat room was run by a PR team. Like none of the devs I think I mean it’s hard to know at this point because everyone was so pseudo-anonymous. It’s hard to know like who was saying what, but.

Faizaan: Right.

Vikram: The PR team like one of the first thing I noticed was they were hitting on women who joined the chat.

Faizaan: Oh wow.

Vikram: Yes if someone joined with a like a woman’s avatar they would just start commenting on it. It was pretty bad. The PR people, like a couple of them got called out by it by a few other members who were like hey guys you can’t do this. This is ridiculous like what are you? Are you in kindergarten?

Faizaan: Yes.

Vikram: Like what’s the deal? That was the first thing. Then they talked a ton of smack about other coins including like Monero’s lead dev. Twitter’s name is FluffyPony.

They were talking a bunch of smack about him and then Kevin Rose I think had tried to get in touch with the developers on the project and they didn’t respond so initially he was going to feature the coin in a newsletter and he decided not to because he was like hey look I can get in touch with these guys. I’m not going to promote this coin if it’s if I don’t know like who is actually behind it and so the PR team, they started calling him Kevin Gross. Like his last name is Rose R-O-S-E. They just called him Gross.

Faizaan: Right, right.

Vikram: Like what is this? Like how old are these people?

Faizaan: Yes that’s.

Vikram: Then to top all of this off was I think they antagonized enough of the Monero community that a bunch of the people in the Monero team found license like problems with the license that they were using. It was a fork of Monero code and one of the requirements of Monero code base is that you give proper attribution and they hadn’t. Like they hadn’t update — it was like really minor. Like they had updated some dates and they hadn’t done a few other things and around this time when it happened I guess they got their GitHub repo pulled from GitHub. Like they got a DMCA notice.

Faizaan: Oh wow.

Vikram: Yes and then it got you know it was down a whole bunch just on that and then the chat got really active people asking like what’s going on? Like why are we doing this? Why are we antagonizing these people etcetera and.

Faizaan: I would like to cut you off just to point out that we do catch all of these DMCA notices on our platform as well.

Vikram: Yes, we do and they’re great indicators of there’s a major problem if a team is, team gets one.

Faizaan: Right.

Vikram: We saw it with Sumokoin.

Faizaan: Like your coin is — you’re not in GitHub anymore.

Vikram: That’s a big deal.

Faizaan: Yes.

Vikram: If it’s because of a license issue, that’s a big problem. I mean if you’re on top of your stuff you should be aware of all of these things especially as an open source contributor.

Faizaan: Right and this is one of the situations where it’s often not incompetence, but actually fraud where people will just copy something with the intent of doing some sort of a pump and dump or that sort of thing.

Vikram: Yes, so that happened and then you know I was asking a bunch of questions on this too and then boom I got banned.

Faizaan: For just asking.

Vikram: Yes, just for asking questions. I wasn’t given a warning or anything like that. I just got banned form the telegram chat.

Faizaan: Why are you spreading fun?

Vikram: Yes basically that was it. I was spreading fun because I asked them what the status of the GitHub repo was? Okay all that happened and at that point it’s like okay this thing is really weird. Like I have no interest in being involved in this anymore and then some time passed and they brought on a new developer.

This guy FireIce who was the XMR stack miner developer and he was supposed to help build them and ASIC resistant algorithm. For some reason they wanted to rebrand the coin from Sumokoin to RyoKoin R-Y-0. That didn’t make a whole bunch of sense to me. At this point you know after everything that’s happened it’s very obvious that this is just some kind of fraud. Then we found out that there was a big fight between FireIce and the lead developers at SumoKoin and one of the claims was that Sumo was actually led by just one person who pretended to be five different people.

Faizaan: Oh wow. Was it Kevin Durant?

Vikram: Yes, it was just. The whole thing was just a huge mess.

Faizaan: Yes.

Vikram: I think a lot of it was very predictable after the chat room experience. They should always being really interesting like what’s going on in this little Smallcap Land?

Faizaan: Right because it’s always just this handful of people that are involved in drama.

Vikram: Yes and one of the other things that these small coins point to is just communication problems with their coin holders so this is something that we alluded to earlier today. One thing our platform does is it aggregates a bunch of the things that coins end up doing like when a coin updates their blog, we delivered that to our users. When the coin updates their GitHub repo, we deliver the latest commits to our users.

Faizaan: Admin chatter on telegram.

Vikram: Yes.

Faizaan: Because a lot of times that’s the first place news comes out.

Vikram: Right. Admin’s are saying interesting things in their chat. We deliver that to users so you very quickly know what’s going on a project by just you know going through our feed. I was on Twitter this weekend and we got into a Twitter conversation with user NotSoFast, one of the true OGs of crypto. He’s been around for awhile. Really awesome.

He’s pseudo-anonymous and I think for good reason like he doesn’t want people to know who he is exactly for safety purposes just for Op sec. You know he is very open with his theories. He’s a big miner. He’s not a big trader.

He does a lot of this like spec mining. You set up a few rigs and when a new coin hits Bitcoin Talk you just mine it and then move onto the next coin. You can make pretty significant gains over time as these really small coins finally get onto exchanges. Most coins when they launch they aren’t on any exchanges.

I was pretty thrilled to just chat with him. He was basically looking for something that was very similar to what we do so instead of you know looking at medium and get hub. What he was looking for was a way for coin teams to directly push their updates to users themselves. You know we have these features. We have a feature called analyst alerts where we push human generated content to users so it’s kind of similar to that, but I don’t know what do you think? What do you think about that idea?

Faizaan: Yes, I think that’s a great idea because and you know in one of our earlier podcasts we just talked about how public companies have reporting requirements and ways they have to communicate with investors and as crypto coins and tokens become more popular they’re going to have to do the same thing especially as more institutional money comes into the system. Right now there is no platform for doing that. Some people are in telegrams. Some are on discourse where you see a lot of stuff just happening on Twitter or the coin’s website and I think as an investor and both as both a coin manager or an investor it would be nice to have one place you could go to and see all of the official releases for the coins in your portfolio or as a coin manager being able to publish in one place and potentially have it syndicate to a handful of platforms.

Vikram: Yes, I can see that having a good use to me during the whole Block Net thing where I was mining a dead chain because a good UX is a user gets pushed the important stuff.

Faizaan: Right.

Vikram: Rather than going out to look for it.

Faizaan: If especially if you can classify them as certain types of events. Like pending pork should be like a big red flag. Like that’s something you absolutely need to know about right away whereas something else that’s more minor could carry some sort of different tag and doesn’t necessarily you know it’s not as urgent, but it would be great if four of them like my portfolio I could be pushed all of the stuff is by urgency.

Vikram: Right.

Faizaan: I don’t know if you watch The Office, but there was that wolf where you get like a fax and a text and an email and.

Vikram: Oh yes.

Faizaan: Something like that I think would be a great UX.

Vikram: Yes. That’s what we need to do.

Faizaan: Yes, in terms of what we’re working on I think our initial thought was that we would primarily have internal analysts pushing out information as we find it, but some sort of a syndicated feed you know from white listed users could actually be pretty useful.

Vikram: Right, right. Because you have coin teams, you have exchanges, traders, miners. Miners have to care about these forks. People who are staking need to care about any changes in the on the staking side. There is really a lot of people that could get a ton of value from this.

Faizaan: You also have to be able to trust the information. Like it takes a while for at least for me like if you’re looking at a new coin figure out who the players are and who you need to be listening to. Just if there was a service that like if it was a platform and those people were vetted that goes a long way because I might be on a telegram and I see someone is an admin and they say something. If it’s a smaller coin or you know a bad team like some of the coins we discussed previously you don’t know like, the credibility isn’t necessarily there.

Vikram: Right.

Faizaan: Having a platform where if anything is being published on it there’s a level of credibility I think that’s valuable.

Vikram: Yes. Yes the creditability is important there. You see that with even a lot of these newsfeeds out there that are crypto focused. It’s pretty obvious that they are biased and I wouldn’t be surprised if some of them were being paid by being coin teams to promote whatever agenda. Like this morning I saw a I’m not going to name who it is, but I saw a news article come through and the title was something like see how useless the lightning network is?

Faizaan: Oh wow.

Vikram: It looks like it’s coming from somebody legit by the name of the news provider and you read through it and it’s just it’s a lot of actual fud around the lightning network.

Faizaan: Yes.

Vikram: You see stuff like that you know again and again with different news platforms and presumably if a coin is giving information to its holders, it’s miners, it’s ecosystem directly you know that can be treated as a source of truth. It’s kind of like the investor relations department of stock I guess.

Faizaan: Right.

Vikram: Yes so I think were coming up on time. That was a really interesting conversation and I look forward to chatting again soon.

Show Notes:

State of the market since the last podcast

The SEC commentary on Ethereum ($ETH) and Bitcoin ($BTC)

General crypto sentiments on Twitter

The case moving beyond some of the big currencies (ICO and token markets)

Trepidation around what is legitimate versus non legitimate ICO

The big deal about Jack Dorsey’s Square getting a BitLicense

Adding Ethereum Classic to Coinbase

Political ramifications of having both Ethereum and Ethereum Classic

What they noticed about Zaif and Cryptopia’s API

Standardization of API formats

Their thoughts on API versioning

Open-source projects that do versioning: Ember

Airdropping free NIX tokens to Zin coin holders

Their thoughts on Zoin having a lead developer without development experience

Vikram’s experience in the Sumokoin chatroom

Links

Come check out our market intelligence platform — https://quantlayer.com

Technical explanation of the DAO hack — http://hackingdistributed.com/2016/06/18/analysis-of-the-dao-exploit/

Conversation with Notsofast on Twitter — https://twitter.com/vikramQL/status/1008051164590624768

Ember.js Guides — https://guides.emberjs.com/release/

Barry Silbert & Digital Currency Group — https://dcg.co/who-we-are/

Zencash — https://zencash.com/

Zcash — https://z.cash/

Nix — https://nixplatform.io/

Hey everyone, this is Vikram again. Thanks for listening to us. If you’re an exchange, a trader or working on a crypto project get in touch with us.

You can reach us on twitter at https://twitter.com/quantlayer or email us

at podcast@quantlayer.com.