Theta Network - Issue #22
In this newsletter, we are profiling Theta Token [THETA]. In previous newsletters, we have profiled Bitcoin, Cardano, Stablecoins, Uniswap and many others. Access all our newsletters in our archives at madcapx.substack.com.
The Short of It
Theta is yet another interesting crypto to watch. If you are a trader, look for some more momentum in the next 30 days but as always, do your own research and manage your risk.
Profiling
Theta was founded in 2018 by Mitch Liu and Jieyi Long. The project is advised by Steve Chen, co-founder of YouTube and Justin Kan, co-founder of Twitch. It is a Proof-of-Stake blockchain network tooled specifically for video streaming. Originally launched as an ERC20 token, it has been on its own mainnet since March of 2019. It also features a fully EVM-compatible smart-contract platform. Content on the network can be viewed via the Theta.tv website and app.
There are actually two native tokens. The first one, THETA, is used for staking on a validator or guardian node, to produce blocks, and to steer the protocol’s governance. THETA is capped at one billion tokens. The second token, TFUEL, is the gas used in the system to complete transactions, for video relay nodes, and smart-contract interactions. Nodes can earn TFUEL for every video stream they relay to other users on the network. TFUEL is capped at five billion tokens.
The network can handle 1000+ transactions per second and uses a multi-level Byzantine Fault Tolerance (BFT) consensus mechanism. Both validator nodes (used in block production) and guardian nodes (used in block finalization) can stake THETA in order to earn TFUEL rewards.
The network has the great benefit of reducing content delivery costs by effectively creating a mesh network of shared content. When a user consumes a video stream, their geographical location, speed and availability are taken into account, and the nearest best-fit nodes are selected for content delivery. Each peer node may act as a viewer, a caching node or both. The network continually tests and redefines each node’s neighbour list to ensure optimization during playback.
Advertisers in the system can directly target viewers at a lower cost than on regular video networks. Content viewers earn Theta tokens for their attention as they engage with their favourite content, and influencers can earn Theta tokens as gifts directly from viewers. Viewers are also incentivized to share their redundant computing power and bandwidth resources. Theta has partnerships with many video service companies, such as Samsung, Google, MGM and Sony.
Additional software called Edge Cacher allows users with adequate technical specifications to serve as a dedicated relay node, able to serve orders of magnitude more video data than the normal relay nodes.
Other blockchains similar to Theta are Videocoin, LivePeer, and LBRY.
Trend Lines
In a period of about one month, THETA has gained 222% against BTC. What is happening that is causing the price to push up?
Let’s take a look at Cardano [ADA] that gained over 500% in January and February and in March, it lost as much as 45% from the highs. ADA announced that on March 1st, the Mary hard fork would happen, which would bring some major new features to the blockchain. Two days before the hard fork, ADA topped on the daily chart and on March 1st, it started its descent that lasted 13-14 days. It was a sell-the-event moment.
We could assume the news of Theta mainnet 3.0 that is being released in 30 days is the reason we see this rise. In the markets, there is a term “Buy the rumour, sell the news.” Well, here we buy into the event and sell the release. Does THETA have another 28-29 days of upside?
What about TFUEL, the second token used for gas?
It has gone up a crazy 1000% against BTC with a 37% correction over the last 10 days. Against USD, it is up 1600%. There is a bullish daily candle on TFUEL today. Is this the start of more momentum into mainnet 3.0 with TFUEL?
The Other Trend Lines
Bitcoin continues to be bullish within these trend lines as this Tradingview user puts it: Hello, Traders! BTC-USD is trading in a rising channel Above the support confluence. Consolidating above the previous all-time high. So I think after retesting the support. We will see the pair going up. To retest the current ATH and perhaps to establish a new one. Buy!
A bearish bitcoin call from another tradingview user: We have seen BTC run up quite remarkably, but everything has to come to an end! With all the hype around BTC right now and with my grandparents beginning to talk crypto, I feel the bull market is coming to an end. Using Elliott wave, we can easily see that the 5th wave has to end somewhere around the current area and perform a proper correction. Also, we have seen some bearish divergence in the RSI lately, which indicates that the market needs to turn red for a while! Beware that shorting this market is a considerable risk.
Michael Saylor, who has invested over a billion dollars of company funds into Bitcoin, explains about adding bitcoin to the company treasury “Bitcoin is property, it’s not a security, and that is a very critical idea. Property means you can own a house or you can own land and your company can also buy land..” from the video below.
Saylor has a profound unease about central banks propping up economies with cheap money; by his calculations, the increase in the monetary supply devalues the dollar by 15% a year. He refers to cash as “trash” and a “melting ice cube.” Bitcoin, on the other hand, is “digital gold.” In August, Saylor took the unorthodox step of moving a portion of his company’s treasury reserves into Bitcoin, buying 21,454 bitcoins for $250 million. MicroStrategy continued buying, and in February, it added 19,452 bitcoins for $1.026 billion, bringing its total holdings to 90,531 bitcoins. Current value: $5 billion. The company’s stock has soared in response, closing on March 16 at $724 per share, up from $107 a year ago. — read the full story at Time.com
Portfolios
This portfolio section gives you an idea of what sort of return you can get when investing in crypto assets.
BTC/USD FUND is up 432% since October 1st, 2020. Since this is a long-term holding, it is best kept in cold wallet storage or a safe custody solution. We continue to see a long-term hold position as our best stable alternative. This past week bitcoin has been ranging between $53,270 and $61,130 USD in value.
FUND 3 started on November 16, 2020, with $1000 USD in value and invested into BTC, LTC, ETH, and ADA. The total amount of BTC value from the four coins has a gain of 39% since the start. The USD fund value is up 377% since the start. We will hold these positions to see how well it does against our BTC-only portfolio. LTC is in the minus by 19% against BTC. ETH is holding steady at 13% against BTC since the start. ADA continues to outshine the other altcoins in this fund with a gain of 232% against BTC and 1034% to USD.
BLWX Fund started on February 22, 2021. They all are assets we have profiled in the last few months, and we are interested in how they will perform in 2021 against BTC. BAT went from 29% last week to 108% gain this week against BTC since the start; LINK is down at -10%, WAVES is -9%, XMR is -5%. Overall, against BTC, the fund is up 20% thanks to BAT.
Overall, Bitcoin should be your first choice as an investment in crypto, though many altcoins can give you amazing gains if you manage your risk. As a long-term investor, we see it as our largest portfolio investment. If you are a day trader, there are many great assets to put on your watch list. Look through our previous newsletters to find some. Madbyte does have its own token called MADX and is available within our member website.
About
MadCapX research newsletter is written by the Madbyte Team. You can learn more about Madbyte and MadCapX on our websites. This weekly newsletter is a paid subscription and supports the team and the Madbyte projects. The regular cost is $5/month or $50/year. Cancel anytime.
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Disclaimer: Nothing in this newsletter is intended to serve as financial advice. Therefore, do your own research and due diligence before applying any of the techniques highlighted in this post. Any risks or trades based on this newsletter are committed at your own risk.