As a seasoned crypto investor with a deep understanding of the market, I find GSR’s ETF Possibility Score an interesting and valuable addition to the investment community. Decentralization and demand are two crucial factors when evaluating potential investments, and this research provides insightful metrics for both.
As a researcher at GSR, I’ve recently been exploring the potential of various cryptocurrency Exchange-Traded Funds (ETFs) using our newly developed ETF Possibility Score. This score is calculated based on two essential factors: decentralization and demand.
Decentralization is a intricate and multifaceted idea that encompasses various aspects including: the ability for anyone to join without permission, the power to develop and make decisions, the dispersal of digital tokens, and the reliance on diverse hardware systems.
One way to rephrase this in clear and natural language is: “Important indicators for evaluating decentralization include the Nakamoto Coefficient, representing the minimum number of entities able to conspire against the network, and staking demands, which gauge how simple it is for an individual to become a node operator or validator.”
Based on the assessment by GSR, XRP and Cardano have decentralization scores of -0.9 and -0.1 respectively, making XRP rank last and Cardano fifth in this metric. It is important to mention that Nakaflow did not provide ratings for XRP and Cardano, so GSR utilized estimates from other sources instead.
The potential for growth is an important consideration, with metrics such as market capitalization, trading volume, and community engagement providing valuable insights. A higher ranking in these areas typically suggests a stronger prospect for increased demand in the future. XRP and Cardano have demand ratings of -0.2 and -0.5 respectively, positioning them fourth and sixth on our list.
With a weighting of 33% for decentralization and 67% for demand, GSR’s ETF Potential Scores assigned Ethereum the highest ranking. Solana and NEAR followed closely behind, demonstrating strong potential as well. However, XRP and Cardano’s lower scores imply a less likely chance of ETF approvals for these assets in the immediate future.
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2024-06-28 15:16