Recently, I put a spotlight on using the all-time volume weighted average price (ATVWAP) to evaluate, whether the price of Bitcoin is overbought or oversold (find the detailed article here: Bitcoin ATVWAP). It is basically an average daily price, with every price point being weighted by its daily trading volume. The ATVWAP is not limited to BTC though, it also offers interesting insights for the price of other cryptocurrencies. In this article, it will be applied to one of the fastest cryptocurrencies around, which is Nano.

Trading Volume
Nano has been traded publicly for about two years. It started trading below 0.01 USD in March 2017 and then rose all the way up to an all-time high of 37.62 USD on January 2, 2018. After that, it went all the way down to a low of 0.74 USD on December 15, 2018. As these numbers indicate, Nano was traded in many different price ranges. The trading volumes per price range differed largely from each other. For example, not many people were able to pick up Nano below one cent with just 20 million Nano traded below that range. Surprisingly, only a total of 170 million Nano were traded with the Nano price below 10 cents, even though it traded in that range for 170 days, whereas 244 million Nano were traded with a Nano price above 10 USD in just 62 days. By far the most trading volume (810 million Nano) has occurred in the range between 1 and 5 USD. The following visualization shows how many Nano were traded in each price range:
800M600M400M200M0.01$10$.05$–  .01$.10$–  .05$.50$–  .10$1$–  .50$5$1$><10$5$NANOTRADING VOLUME PER PRICE RANGE(IN NANO)
Nano ATVWAP (in USD)
As we can see, Nano was traded in many different price ranges over the past two years. It is therefore difficult to determine a “fair” price, that is significant but also not too complicated to calculate. An average price of Nano over time wouldn’t be significant since its trading volume peaked above a dollar, even though Nano traded below 10 cents for a long time. Instead of the average price, I suggest using the all-time volume weighted average price (ATVWAP), which weights each daily price with the volume it was traded at. The following chart shows both the daily price movement and the corresponding ATVWAP value.

NANO(IN USD)ALL-TIME VWAPATVWAP (USD)VOLUME(NANO)DailyPrice (USD)20172018.005$.05$.5$5$50$
During its nearly 2 years of public trading, Nano mostly went up in 2017 and mostly went down in 2018. Starting in March 2017, Nano’s price increased steadily from 0.008 USD to 0.09 USD in the beginning of November 2017, growing by around one percent a day for half a year. The all-time volume weighted average price (ATVWAP) acted as a reliable support during that period, with Nano’s price approaching the ATVWAP on several occasions, but barely going below.

From November onwards, Nano pumped massively from 9 cents up to 37 USD in a span of two months, growing on average by 10 percent per day (!). That huge growth in price led to an increase of the ATVWAP as well, but it didn’t go nearly as high as the daily price. When Nano hit its all-time high of 37.62 USD on January 2, 2018 the ATVWAP was at 1.37 USD, indicating that Nano was massively overbought. The daily price declined after that, but managed to stay above the ATVWAP until March 27, 2018, with the daily price at 6.66 USD and the ATVWAP at 6.8 USD.

From mid-March to mid-May 2018 Nano’s price hovered around the ATVWAP but declined below it afterwards. On August 14, 2018 Nano reached a temporary low of 0.78 USD, with the ATVWAP at 6 USD. Nano went up afterwards, but only to a temporary high of 3.72 USD 12 days later. After that, Nano continued to go down to a low of 0.74 USD on December 15, 2018 and has therefore now stayed below the ATVWAP for over eight months, leading to the ATVWAP declining to 4.5 USD.

For the last 76 days Nano has stayed below/around the one USD mark. With a price around 80 cents today, Nano is trading way below its current ATVWAP of 4.5 USD. It shows, that many investors are sitting at a loss and might have little to no incentive to sell at these prices. However, the ATVWAP is an adaptive metric and will go lower, the longer Nano’s price stays below the ATVWAP. Adding to that, investors that buy at these prices are in profit, if the price goes back up to two USD or higher. Therefore, it might take some time until Nano’s price hits the ATVWAP again but buying far below the ATVWAP value should be a way better entry point than buying it while the daily price traded 30x above its ATVWAP value.

Skycoin Distribution

Skycoin Distribution
The cryptocurrency market is well accustomed to the ICO model. Most projects use the approach of an initial coin offering to finance their idea via crowdfunding, with investors receiving a substantial portion of the coins of the invested project in return. From the start of these projects, most of the coins are held by investors and there will be little to no influx of new coins. Only a few projects use a long-term distribution model, in which just a slight portion of coins is released at a time and the distribution is executed over years. Skycoin belongs to this group of long-term distributed coins and we will take an in-depth look at how its distribution is executed.

A total of 100 million Skycoin were generated in the genesis block.1,2 On April 2nd in 2015, these 100 million Skycoin were separated into 100 addresses with each of it having a balance of 1 million Skycoin (transaction).3 These addresses are known as the distribution addresses. Each Skycoin, that is not contained in these addresses, counts as circulating supply.4 Since April 2015, coins are successively taken from the distribution addresses and are put into circulation. I analyzed all transactions of the distribution addresses and displayed them in a chart, that shows how many Skycoin were distributed over time:
SKYCOINCIRCULATING SUPPLY12.5m10.0m7.5m5.0m2.5m02015201820172016+77%+127%+92%
Distribution events – General
As the chart shows, the circulating supply increased periodically. It looks like the distribution was either made directly from the wallet (slow growth) or the coins were taken out of a distribution address completely and were then distributed (sudden growth). Nonetheless, there were some distribution events, that we can attach to this chart.

Distribution events – 2015 & 2016
The first initial public offering was announced in early 2014.5,6 It was held one year later in April and May 2015,7,8 where about 450 thousand Skycoin left the original distribution addresses. To be fair, it was not an usual IPO, it was more a private sale to dedicated early followers/contributors,9 who would not shy away from compiling the wallet on Linux.10 Because of the difficulties that came along with this early IPO, the team offered to continue selling Skycoin for the same BTC price of the IPO, until a circulating supply of about 2 million Skycoin would be reached.11 If they actually sold more than 2 million from the first 3 million Skycoin distributed in 2015 and 2016 is hard to determine. What we know so far, is that 1 million Skycoin were sold to a large investor or a consortium of investors, that were held in one address. The coins were sent to this address in September 2015 and have recently been sold.12 Concluding from that, an amount of 1.45 million Skycoin have evidentially been distributed via sales in 2015. Therefore, I would estimate that another 550k were sold to early followers, while the remaining 1 million Skycoin from the first 3 distribution addresses were distributed to team members and project contributors.

Distribution events – 2017
After some testing of a Skycoin distribution on a third-party platform,13,14 the next big distribution event was held on the exchange C2CX in early 2017. About half a million Skycoin were sold in this event.15 Followed by this success, another distribution event was held on C2CX in August 2017, where 1 million Skycoin were eligible to be sold to the public.16 However, since I couldn’t find any source indicating how many Skycoin were sold of these 1 million Skycoin available and the coins were sold for twice the market price Skycoin was traded at back then, the distribution event probably wasn’t very successful. I would guess, that about 10% (100k Skycoin) of the available coins were sold in the event. Overall, the Skycoin distribution was pushed forward in November and December 2017 with over-the-counter sales, with Skycoin being both sold manually and fully automated via the Skycoin website. About 50 thousand Skycoin were distributed in the automated OTC, which can be seen in the Skycoin explorer (automated OTC address).17 Determining the amount of Skycoin sold via manual over-the-counter sales is more difficult. The amount of Skycoin sold in these sales was rather high, as Synth has stated in an interview.18 One address alone has received 1 million Skycoin in December 2017, which I suppose is an OTC sale to a large investor (or a consortium of investors). Given that 4 million Skycoin were put into circulation in 2017, I would estimate, that another 1 million Skycoin were sold via OTC sales in addition to the 1 million Skycoin distributed to the large investor address.

Distribution events – 2018
In 2018 many smaller distributions took place. It started with the distribution of Skycoin to buyers of the official Skyminer, which was sold for one BTC each. The first batch of 300 Skyminers was handed to buyers alongside 450 Skycoin each,19,20 whereas the second batch of 300 Skyminers included a rebate of 650 Skycoin per buyer.21,22 These miner rebates add up to a total of 330 thousand Skycoin. Then in May, Skycoin was listed on Binance. Since Binance is one of the largest cryptocurrency exchanges it presumably required a listing fee (which might have been paid in BTC or in SKY) and a certain amount of Skycoin to ensure liquidity in the orderbook. Finding out how many Skycoin were distributed to Binance for these purposes is difficult, a look at Binance’s Skycoin withdrawal address can provide some hints however. The trading of Skycoin on Binance started on May 24, deposits were enabled one day earlier.23 The Skycoin withdrawal address on Binance was filled for the first time on May 25 with an initial amount of 503 thousand Skycoin. With the help of the Skycoin blockchain, I traced back the largest amounts of SKY deposited to Binance from this initial amount and it included 85 thousand Skycoin, that originated from a distribution address opened 5 months earlier. Therefore, I assume that these 85k Skycoin were given to Binance to provide the orderbook with liquidity. In June, Binance also held a trading competition and a lucky draw in cooperation with Skycoin, in which they gave away 50 thousand SKY.24 From June onwards, the Skywire testnet went live and rewards were handed to participants monthly. 8 months later, these rewards have accumulated to a total of 290k Skycoin.25 In July, around 700k Skycoin were distributed to an OTC seller, which became apparent after the investor sold all his coins on Binance a few months later (see his Binance deposit address for more information).26

Distribution events – 2019
In December 2018, the circulating supply started to increase from 10 million to now 12.5 million Skycoin at the beginning of February 2019. It can be assumed, that most of these coins were distributed via OTC sales,27 so I would estimate around 2 million Skycoin from these 2.5 million introduced to the circulating supply in December 2018 and January 2019 have been sold over the counter. Skycoin also started trading at the crypto exchange LBank, which (according to an analysis of Skycoin’s blockchain) has received around 50k Skycoin for liquidity and airdrops.
290KSkywireTestnetRewardsSince June20182MOTCSale(est.)Dec/Jan2018/1950KBinanceTradingComp.June2018700KOTCSaleJuly201850KLBankAirdrop &LiquidityJanuary201985KLiquidityBinance(est.)May2018330KMiner RebateSkyminerBuyersJan/Jun201850KAutomatedOTCDec/Jan2017/181MDistributionto largeinvestorDecember20171MManualOTC(est.)Nov/Dec2017100K2. Distributionvia C2CX(est.)Aug/Sep2017500K1. Distributionvia C2CXJan – April2017550KSale to earlyfollowers –(est.)April – Dec20161MDistributedto largeinvestorSeptember2015450KFirst PublicOffering ofSkycoinApril/May2015SKYCOINDISTRIBUTION EVENTS
Allocation of the total supply
The numbers shown in the graphic add up to a total of 8.155 million Skycoin, that have been mostly distributed via sales. The circulating supply right now is at 12.5 million, although we have to consider that the Skycoin project didn’t necessarily distribute the coins directly from the distribution addresses, but rather took them out all at once and then placed them in several smaller distribution addresses. It is therefore possible that the real amount of Skycoin in circulation is lower than the amount displayed in the Skycoin explorer. Nevertheless, I can’t tell how many of these have been distributed, so let’s say 12.5 million is the actual circulating supply. Considering that approximately 7.5 million Skycoin were sold, (only) 60% of the circulating amount of Skycoin have been distributed via sales. So, what has happened to the other 40% of coins in circulation, that were not sold in distribution events?

A part of the Skycoin distribution strategy is to not offer all Skycoin to speculators, who might only be interested in short-term profits. Certainly, coins are sold to gather funds and provide liquidity to the market, but a vast amount of coins is distributed to people who contribute to the success of the project. Of the 25 million Skycoin that are immediately available for distribution,28 10-15 million will be offered in ICO and OTC sales.29 Another 10 million Skycoin are reserved to incentivize Skywire by either handing out mining rewards or offering a Coin Hour buyback.30,31 However, we don’t know if these 10 million Skycoin are fully part of the first 25 million distributable Skycoin. We can assume it though, because the Skywire network had to be incentivized anyways, if the team would make a decision against distributing more than 25 million Skycoin in the future. Furthermore, the Skycoin project is willing to fund interesting, dedicated projects within the Skycoin ecosystem, that move the project forward.32 There are also bounties available for individual contributors to the Skycoin project.33 So, going back to the 40% of coins in circulation that were not allocated for sales, it is assumable that they were distributed to contributors of the project.34 Generally speaking, with a minimum of 20 million Skycoin being used for sales and Coin Hour buybacks, I think 5 million Skycoin is the maximum amount available for a fund included in the first 25 million Skycoin. Let’s visualize these numbers:
Maximum supply
As we have seen, 25 million Skycoin are immediately available for distribution. As soon as this mark of 25 million Skycoin in circulation is reached, another 5 million Skycoin become available per year, until there is a maximum of 100 million Skycoin available for distribution.35 In addition to that mechanism, there is an unknown group of developers involved in the distribution process, who need to agree to unlock 5 million Skycoin. If just one of these developers votes against distribution, it can stop the whole process.36 It is currently under consideration, if the growth should not be slowed down even more.37 Adding to that, each core developer is getting 1 million Skycoin, which are locked for several years.38 There are different mechanisms in place, that prevent the core developers from dumping the coins.39,40

So, how could a concrete distribution plan look like? We saw, that it took 4 years to distribute 12.5 million Skycoin. Let us assume, that 6.25 million Skycoin will be distributed per year from now on, which is already a high amount compared to the distribution in the past. This would mean, that it would take until the end of 2020, until the immediately available 25 million Skycoin are distributed. After that mark would be reached, 5 million Skycoin would be unlocked per year. If, for the following 15 years, each of these Skycoin would be distributed in the same year, the whole amount of 100 million Skycoin would be in circulation at the end of 2035. Let’s visualize it:
SKYCOINESTIMATED DIST. OVER TIME20272015201720192021202320252029203120332035100m80m60m40m20m025m
The reasons behind the long-term distribution
After looking at how the past distributions were executed and depicting, how future distributions might look like, you are probably still wondering, why the Skycoin project made the decision for this long-term approach. It is in fact such a different approach compared to the distribution of the majority of coins and tokens. Most new cryptocurrency projects choose the distribution method of an ICO, where they sell a large portion of their coins, because they require a decent amount of funding to execute their idea. It is basically a crowdfunding approach to finance their project. However, this did not apply to the Skycoin project. The early developers of Skycoin claim, that they were very early into cryptocurrencies. They say, they owned Bitcoin before it reached the mark of one US dollar and are therefore pretty well off.41 Additionally, they claim that a lot of the early development of Skycoin was funded by a bunch of different companies,42 meaning the Skycoin project didn’t need to fundraise money to finance the development. So, unlike the majority of other coins, they could thoroughly plan their distribution. In their opinion, it is the best approach to distribute coins gradually, with the influx of new coins decreasing over time, which is similar to Bitcoin’s distribution rate.43 They aim to sell small amounts of Skycoin at a time, and will reinvest the received funds into the project’s development and infrastructure.44 To not effect the price per Skycoin negatively by increasing the circulating supply, they intend to release coins slower than the growth of their userbase.45

Unlike most other cryptocurrencies, the Skycoin project prefers to use a long-term approach for the distribution of Skycoin. Of 100 million Skycoin, about 12.5 million were distributed in four years since the first ICO in April/May 2015. From now on, I estimated, that 6.25 million Skycoin could be distributed per year, until 25 million Skycoin would be in circulation at the end of 2020. After that, 5 million Skycoin could be distributed per year, which would mean, that there could be 100 million Skycoin in circulation at the end of 2035. Talking about the target audience of these distributions, the project wants to not only distribute Skycoin via ICO and OTC sales, but also use the coins to incentivize bandwidth providers in the Skywire network and to generally reward people who contribute to the project. All in all, I hope this article increases the transparency about the Skycoin distribution and provides answers towards most questions around this subject.

Sources – General supply
“Skycoin has a total supply of 100 million coins created in the genesis block.”
Skycoin; Skycoin Blog; Understanding the Skycoin Supply & Distribution; 25.01.2018
“So there’s one hundred million total and the reason that number was chosen was that one million coins is exactly 1% of Skycoin.”
Synth; Youtube; Coin interview with Skycoin; 30.10.2017
“The 100 million coins are being sent, 1 million coins to each of 100 addresses with multiparty lock system to prevent theft. There is also a time capsule lock on the private keys.”
Skycoin; Bitcointalk; [SKY] Skycoin Launch Announcement; 01.04.2015
“unlocked means it can be distributed, locked means it cant be distributed, circulated means distributed”
Steve [Sky Dev]; Telegram; Skycoin main channel; 01.11.2017
Sources – Distribution events
“How the IPO Will Work: 1 million coins (1%) will be sold for 50k in Bitcoin.”
skycoin; Bitcointalk; [SKY] Skycoin Launch Announcement; 18.04.2014
“IPO pre-registration begins in a few hours. Trying to get binaries compiled and making sure this bitmessage library works. Pre-registration will last two weeks. Until the 6th of September. Pre-registration will be required for the IPO.”
skycoin; Bitcointalk; [SKY] Skycoin Launch Announcement; 22.08.2014
“2500 Skycoin per Bitcoin. Which is about $0.10 / Skycoin. Bitcoin to USD is too volatile so just set it to that. … I think we started getting bitmessage requests for IPO in about two months ago and are just sending out coins now. … There are about fifty people in the IPO so far. The average amount is $2000. About half the coins in the allotment are already accounted for. Very good so far.”
skycoin; Bitcointalk; [SKY] Skycoin Launch Announcement; 18.04.2015
“25% of the IPO receipts have been processed. I am this far down list now. I have not even gotten to processing the orders for the Skycoin devs yet.”
skycoin; Bitcointalk; [SKY] Skycoin Launch Announcement; 02.05.2015
“This IPO is for developers, people who have been following for a while and experienced people who know what they are doing. This is more of a private offering and not really an IPO. The purpose is to get Skycoin trading and work on bugs.”
skycoin; Bitcointalk; [SKY] Skycoin Launch Announcement; 07.02.2015
“We did a ghetto ICO, by hand on bitmessage a few years ago. To software developers who had to compile the wallet from source, on linux.”
skycoin; Bitcointalk; [SKY] Skycoin Launch Announcement; 25.12.2016
“Yes we reserved 2% of the coins for people on the Bitcoin talk thread, at the ICO price. Bitmessage did not work for a lot of people. We tried to do sale over Tox bot and that failed and people had problems. Also, no wallet builds and difficult to buy. We have developers we are reserving coins for, because they have not been able to get compilation working on their platform.”
skycoin; Bitcointalk; [SKY] Skycoin Launch Announcement; 10.10.2016
Please refer to my blockchain analysis of Skycoin, where I dedicated one paragraph to this address.
Christian Ott; Refering to my chain analysis of Skycoin; 19.07.2018
“We have an invite only ICO on third party platform, that you need QR code to access. 25 people have code right now, and it is open to anyone who posted on the Bitcoin talks thread in the past 4 years. More information later.”
skycoin; Bitcointalk; [SKY] Skycoin Launch Announcement; 23.11.2016
“Now we are testing ICO on third party website.”
skycoin; Bitcointalk; [SKY] Skycoin Launch Announcement; 25.12.2016
“Last distribution was 500,000 coins. That took 4 months to sell. But then in last month someone wrote one article and skycoin was put on one website and whole ICO sold out in two weeks”
Synth; Telegram; Skycoin main channel; 22.04.2017
“On August 8, 2017, 1% (1 million) of Skycoin will be sold at a fixed price of 0.002 BTC / SKY.”
Skycoin; Skycoin official website; Distribution; 13.08.2017
“-The OTC price adjusts when we adjust it -The OTC wallet is bxpUG8sCjeT6X1ES5SbD2LZrRudqiTY7wx you can see how many coins are in it. There’s about 20BTC worth at these prices -We add coins to the OTC wallet manually. This reflects the amount available for sale. -The OTC price is kept higher than market price for reasons stated 100 times in chat and also in blog posts”
Steve [Sky Dev]; Telegram; Skycoin main channel; 09.01.2018
“I have 300 people messaging me for the OTC. Until we have the automated system in place, which is just being turned on now, I had to do these things by hands, so we were getting 100 messages an hour for OTC sales. It took three weeks I think for me to finish all of the OTC sales … So we have these OTC orders and some are like 5, 10, 200 Bitcoin…”
Synth; Youtube; Coin Interview with Skycoin 02; 11.12.2017
“For the cost of 1BTC you receive the miner (value of 0.05 btc +/-) and you receive a rebate in the form of .95BTC worth of Skycoin (450 Sky at the moment)”
MrHodlr | Systems Integrator | Skycoin; Telegram; Skycoin main channel; 30.01.2018
“Shipping schedule: – 50 miners are available for shipping immediately- 250 miners should be available by the 2nd week of February.”
Steve [sky dev]; Telegram; Skycoin main channel; 10.01.2018
“About 300 I think.” (Responding to the question how many Skyminers will be sent out)
Steve [sky dev]; Telegram; Skycoin main channel; 26.05.2018
“Miner rebates were at 650”
therealssj; Telegram; Skycoin main channel; 23.07.2018
“Binance will open trading for SKY/BNB, SKY/BTC and SKY/ETH trading pairs at 2018/05/24 09:00 AM (UTC). Users can now start depositing SKY in preparation for trading.”
Binance; Official Website; Binance Will List Skycoin (SKY) on 2018/05/24; 23.05.2018
“Skycoin Competition … Trading Competition: a total of 20000 SKY to win! … Lucky Draw: 30000 SKY + 10 Skyminers to win!”
Binance; Official Website; Binance | Skycoin – Lucky Draw; 07.06.2018
The following amounts of Skycoin were sent to miners per month: 25k SKY – June 2018; 25k SKY – July 2018; 30k SKY – August 2018; 30k SKY – September 2018; 60k SKY – October 2018; 40k SKY – November 2018; 40k SKY – December 2018; 40k SKY – January 2019
PSA Skywire; Telegram; Channel PSA Skywire; Starting from 28.07.2018
“huge OTC investor who was time locked; at $35 dollars a coin, just had coins unlock, so may be dumping”
Synth; Telegram; Skycoin trading channel; 27.10.2018
“Some OTC at market and some to investment funds. And some for coin hour buy backs.” (Answering the question on how coins are being distributed)
Synth; Telegram; Skycoin main channel; 01.01.2019
Sources – Allocation of total supply
“75 million coins (75%) are timelocked (hardcoded in skycoin.go scroll down to bottom) and 25 million coins are currently unlocked.”
Skycoin; Skycoin Blog; Understanding the Skycoin Supply & Distribution; 25.01.2018
“We will set the total cap of the OTC sale to bring Skycoin’s distributed percentage to be between 10% and 15%. Currently, Skycoin is at 6%. The remainder is reserved for the Skywire network subsidy, until we hit the 25% timelock cap and enter a maximum 5% per year distribution.”
Skycoin; Skycoin Blog; Skycoin Distribution Plan; 09.10.2017
“We have decided we will distribute a portion of the Skycoin over time to people running Skycoin meshnet nodes. To promote network usage and to get users on to the network and balance out the whales.”
skycoin; Bitcointalk; [SKY] Skycoin Launch Announcement; 09.03.2017
“We have 10 million skycoin allocater for coinhour buybacks over a few years to bootstrap the skycoin to coinhours market.”
Synth; Telegram; Skycoin main channel; 25.11.2017
“However, if 1% of currency is created each year and invested in activities that increase the value of the coin network, by more than the cost, then doing so maximizes the value for all coin holders. If $1 in investment in meshnet deployment, PR, advertising or lobbying nets $5 in coin market cap then coins which use this mechanism will out-compete coins that are unable to. The market-cap and values of coins pursuing this strategy will grow significantly faster than the alternative.”
Skycoin; Skycoin Blog; Development Update #45; 17.12.2014
“If you come in and you do a VPN app or videosharing app or a messaging app on Skycoin, we might give you half a million dollars of Skycoin. We fund our developers. We invested in a lot of different development teams and we distributed the coins to the people that are doing the work and promoting it. If you are doing a meetup, we will give you Skycoin. If you are doing T-Shirt designs, we will give you Skycoin. If you help with translations, we have a bounty program. So, we are busy distributing the coins to people moving the project forward.”
Synth; Youtube; AMA hosted by Crypto Brahma; 11.03.2018
“We are going to be distributing coin bonuses to about thirty contributors, on a vesting schedule over the next few years. For example – one project manager who has help fix over a hundred fifty bug tickets is getting 250,000 SKY over the next four years (about 40k USD in SKY at price when he joined project) – website guy/content/marketing/design guy who was critical is getting 60,000 SKY over next two years – some contractors and major contributors are getting 5,000 SKY to 30,000 SKY distributions over the next two years for work on mesh network, bounties, bug fixes, etc”
Skycoin; Skycoin Blog; Ask the developers #8; 25.12.2016
Sources – Maximum supply
“The Skycoin distribution is timelocked. This means that, of the undistributed Skycoin, 25% are immediately distributable. The remainder cannot be distributed until the first 25% have been distributed. Once the first 25% have been distributed, an additional 5% is unlocked for distribution. For each subsequent year thereafter, an additional 5% is unlocked for distribution. This gives Skycoin a 14 year distribution timeline, after the first 25% is distributed. We may extend the unlocking process to take up to 25 years, but we will never shorten the timelocking schedule. There is no requirement that the yearly 5% be distributed. The unlock only enables that amount to be distributed. The locked Skycoin are allocated for expansion of the Skywire Network via targeted network subsidies and for bounties for platform development.”
Skycoin; Skycoin Blog; [SKY] Skycoin Distribution Plan; 09.10.2017
“The 75 million (75%) undistributable Skycoin cannot be distributed until the first 25 million (25%) have been distributed. After that is done, for each subsequent year thereafter, 5 million coins (5%) are unlocked via an unanimous consent (1 vote against distribution can stop the whole process) of an unknown group of developers. This does not mean that each year 5 million coins have to be distributed, they are just unlocked and it is possible to distribute them.”
Skycoin; Skycoin Blog; [SKY] Understanding the Skycoin Supply & Distribution; 25.01.2018
“We are considering slowing down the timelock even further: * 5% each year for 5 years * 4% each year for 5 years * 3% each year for 5 years * 2% each year for 5 years * 1% each year for 5 years This make it last for 25 years instead of 14, and is better suited to our growth forecasts. Note that for technical reasons, locking is handled in 1% chunks, otherwise we would be doing exponential decay.”
skycoin; Bitcointalk; [SKY] Skycoin Launch Announcement; 28.08.2017
“Each of the core developers is only getting 1% each and they are locked for several years.”
Skycoin; Skycoin Blog; Ask the developers #7; 07.05.2015
“We are putting technical and human measures in place, to ensure that if any of the key contributors starts dumping that it would only be temporary. We want to avoid a situation where someone has 30% of the coins and the community has 2% and that person could dump their coins everyday on the market for a decade before they ran out. That is what happened with NXT and we wanted to avoid that.”
skycoin; Bitcointalk; [SKY] Skycoin Launch Announcement; 04.04.2017
“Future Measures: – we are going to time lock the addresses in the future, so the node will reject transactions spending their outputs – we are going to put constraint in the code, so the blocks have to be distributed in sequential tranches”
skycoin; Bitcointalk; [SKY] Skycoin Launch Announcement; 04.04.2017
Sources – Reasons for the long-term approach
“All of our lead developers were in Bitcoin before it was at a dollar, so they are pretty well-off. Then we had an ICO and even the developers had to buy in the ICO and that was when Bitcoin was less than a hundred dollars and Bitcoin is over 10,000 dollars now. Actually, we never even had budgeting until very recently, because the Bitcoin price was just going up and up and up and no matter how many people we hired, we couldn’t even spend it.”
Synth; Youtube; AMA hosted by Crypto Brahma; 11.03.2018
“Skycoin is more like a consortium. There is a bunch of different companies, that are all using the infrastructure or are contributing to the infrastructure and funding developments. In the beginning we didn’t do a huge ICO to raise money, most of the development was funded by our corporate partners and also the personal contributions of the developers who made a lot of money on Bitcoin and just wanted to see this technology built.”
Synth; Youtube; AMA hosted by Crypto Brahma; 11.03.2018
“Our distribution schedule is very similar to Bitcoin. – We are not doing a large sale of 30% of the coins at once like Ethereum. We think this distribution schedule sells to many coins and limits the upside for investors and will destroy the long term price when the speculators/miners dump. – We are not hoarding 98% of the coins like Ripple (the Ripple free float is a lie) – We think a gradual distribution with the number of new coins decreasing over time is the best distribution schedule. – If the distribution negatively impacts the price, we will cut the distribution back and if it continues to fall we will begin buybacks. – We have a professional market maker partner who is invested for the long term and will provide liquidity on both sides of the order book. We think the Bitcoin distribution schedule is the most natural and has been the most successful. We do not have miners and no new coins are created, so it has to be done by hand, but we think that is best way to allow gradual long term appreciation.”
Skycoin; Skycoin Blog; Ask the developers #7; 07.05.2015
“The Skycoin distribution schedule and philosophy is identical to Bitcoin’s distribution rate, or how Facebook or Google stock was distributed. Google did not distribute 80% of its shares by doing a massive Ethereum style crowd sale, before any of the work was done. It sold off fixed, small slices of equity at each step at an increasing price. Then they dumped the money into development and increasing the value of the equity for all stakeholders by investing the money raised in infrastructure. This is what makes sense for funding a large, long term project whose value is increasing. We are using this model, because it works.”
Skycoin; Skycoin Blog; Ask the developers #9; 13.04.2017
“There are two conflicting things we have to deal with – The community wants us to distribute at a rate so the coin becomes less centralized over time – The community does not want us to distribute so quickly that it drives the price down … We want to distribution coins, slower than the rate of user growth – If we distribute 10% of the current free float (10% inflation in free float) – Then the user base growth for Skycoin should be at least 10 or 20% over the same period … The max any one person holds, is 1% of the total coins. 1 million SKY. These are early developers, who have been working on the project for years. This is to eliminate dumping and prevent NXT/Ripple style situations as people join and leave the project team. We have an extremely tight coin supply. No one person is in a position to do major damage, like what happened with NXT or Ripple. We studied every way, that every previous coin had failed and then explicitly designed our rule set to avoid those methods of failure.”
Skycoin; Skycoin Blog; Ask the developers #8; 25.12.2016

TOP 50 one year after the peak

TOP 50 cryptocurrencies
It was on January 8, 2018 when the overall crypto market cap reached its peak of 828.5 billion USD. It was the peak of a phase of seemingly never-ending euphoria, and cryptocurrencies were said to be the new financial paradigm. From that point on, the cryptocurrency market moved into a totally different direction, with many coins/tokens losing over 90% of their fiat value in less than a year. In this article, I will take a look the TOP 50 cryptocurrencies at the peak and how they are positioned on the exact same day one year later.

TOP 50
A comparison between different years for cryptocurrencies can be done with different parameters. You can base the calculation on the price, but that doesn’t consider (logical) price declines due to increases in circulating supply. The market cap of a cryptocurrency should therefore be better suited for a comparison, since it both includes price and circulating supply. The market cap itself is often referred to in USD, but due to most altcoins’ fiat value depending on Bitcoin’s fiat value, comparing the market cap in BTC should give better insights on how a coin performed over time, than it’s fiat value. Accordingly, in the following you can find the market cap of the TOP 50 cryptocurrencies on January 8, 2018 compared to their market cap in BTC on January 8, 2019.
As we can see, there are only four coins in last year’s TOP 50, whose market cap was worth more in BTC, than it was one year later. EOS’ market cap gained 66.6% in Bitcoin, Binance’s market cap gained 80.8% and stablecoin Tether’s market cap gained 388% in Bitcoin value. Bitcoin’s market cap was also worth more (in terms of BTC) than it was one year ago, due to an increase in circulating supply. The market cap of all other 46 coins/tokens lost value against BTC, some less (Stellar lost only 21%), some more (DENT lost 90%). 36 coins remained in the TOP 50, while five coins even moved out of the TOP 100. One coin died completely, which is the infamous Bitconnect. On average, the market cap of coins/tokens in the TOP 50 lost 50.4% in Bitcoin value.

Price in fiat value
The peak of the overall crypto market cap also meant a peak for most coin’s prices. With BNB, EOS and USDT, only three coins would have gained value against BTC, if you had invested in them at the peak of the market. But even they couldn’t gain value against USD. Besides stablecoin Tether, the best investment from a perspective of keeping your fiat value would have been Binance coin – it’s price in USD went down “only” 63.4%. If you would have invested an equal amount in each TOP 50 coin at the peak, you would have lost 88.9% of your fiat value compared to exactly one year later.

The cryptocurrency market peaked at January 8, 2018. A comparison between the valuation of coins/tokens on this day and one year later is best done by comparing their market cap in Bitcoin value. At the peak, only an investment in Binance Coin, EOS and USDT would have gained value against BTC, while the average market cap of TOP 50 cryptocurrencies lost 50.4% of its value in Bitcoin. Talking about the TOP 50’s price valuations in USD is even more devastating: Binance coin lost the least with only 63.4% of its USD value, while the TOP 50 cryptocurrencies on average lost 88.9% of their USD value.

Let’s hope for a better 2019.

Ethereum ATVWAP

Ethereum ATVWAP
Recently, I put a spotlight on using the all-time volume weighted average price (ATVWAP) to evaluate, whether the price of Bitcoin is overbought or oversold (find the detailed article here: Bitcoin ATVWAP). It is basically an average daily price, with every price point being weighted by its daily trading volume. The ATVWAP is not limited to BTC though, it also offers interesting insights for the price of other cryptocurrencies. In this article, it will be applied to the second highest ranked cryptocurrency on CoinMarketCap, which is Ethereum.

Trading Volume
Ethereum has been traded publicly for the last 3.5 years. Similar to Bitcoin, Ether’s trading volumes have gone up significantly over time. While just 835k ETH were traded on a daily basis in 2015, this number increased to 6.7 million ETH in 2018. Lately, the market showed tremendous interest in trading Ether, with a daily trading volume of 21.2 million ETH in December 2018. Consequently, the ATVWAP should better indicate a fair price of Ether than the average price does, because way more investors agree to buy and sell Ether in 2018, than they did in 2015. The rising volume can be seen in the following chart:
Ethereum ATVWAP (in USD)
During these 3.5 years of public trading activity, ETH went from lows around 0.5 USD all the way up to 1400 USD. During the course of 2018 however, Ether has seen its biggest decline. When it hit 82.83 USD on 2018-12-15, it was down 94.2% from its previous all-time high. At that point, many people were screaming for Ether to go even lower, but it has recovered a little instead and went up to the 150 USD range again. Ether’s price movements should provide interesting data to apply it to the ATVWAP.

Although before calculating the ATVWAP, we have to consider Ethereum’s initial distribution method. Ethereum held an ICO in 2014, where it raised 31,538 BTC.1 It can be assumed, that purchases of ETH were made for 2000 ETH per 1 BTC,2 indicating that 63 million ETH were sold in the crowdsale for approximately 0.3 USD per ETH. Why is that important for calculating the ATVWAP? Alongside the public trading data, it also makes sense to integrate data from a crowdsale into the ATVWAP, to add the price difference between token issuance and first exchange listing into the equation. The result is displayed in the following chart:
ETHER(IN USD)ALL-TIME VWAPATVWAP (USD)VOLUME(ETH)DailyPrice (USD)2016201720180.15$1.5$15$150$1.5K$
As the chart shows, ETH’ price action was very bullish from its ICO onwards to the end of 2017. After listing 10x above its ICO price on public exchanges, it dropped down to 0.5 USD, but stayed above its ICO price of 0.3 USD. Later on, it went up from 1 USD to 15 USD in the first 75 days of 2016 and stayed in the range of 7-15 USD for almost a year. Then, from the beginning of 2017 on, ETH had its biggest run up from under 10 USD all the way up to 1400 USD, followed by a massive price decline in 2018. Now, which role does the ATVWAP play?

There are some interesting similarities between how Bitcoin’s and Ether’s price behaved towards its ATVWAP. We had seen, that Bitcoin had a massive run up two times and after that hovered around the ATVWAP for months (in 2012 and 2015). Similar to that, ETH hovered around its ATVWAP after two run ups. The first occasion where this happened, was during the last months of 2015. After being issued for 0.3 USD in its ICO, ETH reached 3 USD on exchanges and later consolidated in the 0.8 – 1 USD range, while its ATVWAP was at 0.75 USD. The second occasion, in which the ETH price hovered around its ATVWAP, was at the end of 2016. After having failed to pass 15 USD on multiple attempts in 2016, ETH went down to the range of the ATVWAP again in December 2016, which was at that time at 7.8 USD.

After its major run up in 2017 however, ETH declined below its ATVWAP value and has stayed below since August 2018. Its ATVWAP had been as high as 304 USD in August, but due to ETH having stayed below for several months with way higher volume than before, its ATVWAP has already declined down to 250 USD. Accordingly, we have yet to see a longer consolidation period around the ATVWAP value, which would only be the case, if ETH behaves similar to both previous occasions.

Ethereum ATVWAP (in BTC)
To be honest, I am not totally satisfied with calculating the ATVWAP of Ether in USD. The whole crypto market somehow rises and falls with BTC and an USD chart therefore contains unwanted correlations with Bitcoin’s USD value. I think measuring the ATVWAP of Ether in Bitcoin shows more interesting patterns than the USD chart, but is also less intuitive to understand, since most people might rather measure value in FIAT than in BTC. Let’s have a look at the chart:
ETHER(IN BTC)ALL-TIME VWAPATVWAP (BTC)VOLUME(ETH)DailyPrice (BTC)201620172018.00025.0025.0250.25
Ethereum’s price movement against BTC over the past 3.5 years is very interesting. It had three major pumps and massive declines after that, but it could establish a higher support level after every pump. It can also be noticed, that each time ETH had a major decline, it went below its ATVWAP value, only to snap back above it after a while again. Moreover, every time it climbed back up above the ATVWAP level, ETH had a parabolic move upwards. Following the massive decline in 2018, ETH seems to surge to its ATVWAP level again, but if we see a parabolic move upwards after it managed to get above its current ATVWAP level of 0.044 BTC remains to be seen.

In this article, I discussed the all-time volume weighted average price (ATVWAP) as a method to analyze Ethereum’s price. While it is both possible to analyze ETH’s price in relation to its ATVWAP in USD and BTC, analyzing the price in BTC appears to be more promising, because it includes less correlation with Bitcoin’s price in USD. The chart shows, that ETH had three declines below its ATVWAP value (in BTC) in the past, but always managed to climb back up again, followed by a parabolic move upwards. Currently, it trades below the ATVWAP for the fourth time, but seems to be on its way to recovery again and might touch its current ATVWAP value in the near future.

Ethereum received 31,538 BTC in their crowdsale in 2014.
Bitcoin Blockchain; 36PrZ1KHYMpqSyAQXSG8VwbUiq2EogxLo2; 06.01.2019
“Data was taken yesterday, when we had 24000 BTC, and assumes that all purchases were for 2000 ETH / BTC (an assumption that is not strictly true, but the error term is sufficiently tiny that it can safely be discounted).”
Vitalik Buterin; Ethereum Blog; Ether Sale: A Statistical Overview; 08.08.2014

Bitcoin Daily RSI – Bearish Milestones

During Bitcoin’s recent sell-off from 6,300 USD on Nov 14th down to a (up to this point) low of 3,456 USD on Nov 25th, I saw many posts on Telegram, Reddit and Twitter expressing “hopium” for a price rebound due to Bitcoin’s daily RSI being in oversold range. But is that even backed by facts or is an oversold RSI just a meme? Let’s find out!

What is the RSI?
The “Relative Strength Index” (RSI) is a momentum indicator used in technical analysis, that measures the magnitude of price movements on a scale of 0-100.1 Its main purpose is to identify whether the price of an asset is in overbought, neutral or oversold range.2 An RSI value below 30 is commonly perceived as oversold, indicating a future uptrend, whereas an RSI value above 70 is perceived as overbought, indicating an upcoming downtrend.3 In general, the lower the RSI value, the higher the chance for the price bouncing upwards and the higher the RSI value, the higher the chance for the price going downwards. However, it is not guaranteed that the price will move in the direction indicated by the RSI.

Bitcoin overbought on the daily RSI
So, how did the daily RSI behave for Bitcoin in the past? The “BraveNewCoin Liquid Index for Bitcoin” on Tradingview provides us with data about Bitcoin’s price movements from 2010 onwards. Since Bitcoin has been an incredibly bullish asset in the past, it has way more upticks to the overbought zone than downticks to the oversold zone. In fact, most of the time Bitcoin went below 30 on the daily RSI, it went back above it again in the following two days.

There have only been five occasions in the past, where it stayed below 30 for more than two consecutive days. One occurred in 2011, one in 2012, and three in 2014. Since an RSI value in the oversold range should indicate an uptrend, I analyzed how long it took to get back to the closing price of the day before the RSI value went below 30. Two times (in October 2012 and October 2014) the price rebounded quickly, reaching the previous closing day price within a couple of weeks (10 days in October 2012, 23 days in October 2014). On two different occasions it took around two months for the price to recover (57 days in September 2014 and 66 days in October 2011). However, in opposite to these four rather quick rebounds, it took nearly two years for Bitcoin’s price to reach 568 USD again, which was the closing price on 12th of August in 2014, before it went into the oversold range on August 13th (and went back into the neutral zone on August 19th).

Classifying the recent sell-off
Comparing the recent sell-off in terms of RSI value to these other five occasions, shows that the recent sell-off is a historical milestone for the bears. Never in the history of Bitcoin has the RSI value stayed below 30 for more than 6 days, whereas we are now approaching the 13th day of Bitcoin’s daily price remaining in oversold range. The daily RSI value has also produced several new lows, setting a new record low at 9.6 a couple of days ago on 20th of November, 2018.

The historical RSI movement of Bitcoin in the past two weeks showed us, that even after 8 years of Bitcoin trading, new patterns can evolve. Bitcoin’s RSI value on a daily timeframe has never been this low and has never stayed this long in the oversold area. The RSI value being this low is an indicator for a higher probability to enter an uptrend, than with the value being above 30. However, it could only rebound in the short-term and a higher probability of an uptrend still doesn’t guarantee an upwards movement. As we saw in 2014, it could take years to go back to the daily closing price before entering oversold range, although most people in the cryptocurrency market would presumably appreciate a quicker recovery.
I also made a downloadable version of the poster displayed in this article, which you are more than welcome to share or print! Download it here:

Bitcoin’s Bearish RSI Milestones – Ultra High Quality – Width: 4960 Pixel
“The relative strength index (RSI) is a momentum indicator that measures the magnitude of recent price changes to evaluate overbought or oversold conditions in the price of a stock or other asset. The RSI is displayed as an oscillator (a line graph that moves between two extremes) and can have a reading from 0 to 100.”
Investopedia; Official Website; Relative Strength Index – RSI; 25.11.2018
“Most oscillators including RSI work with so called overbought and oversold areas. Market is overbought when there has been “too much” buying in the recent past (last few price bars). Conversely, an oversold market occurs when sellers have prevailed and pushed the price down. Common way of looking at oscillators and their overbought and oversold areas is to think of them as a signal to trade in the other direction. As the name suggests, when market is overbought, the buying has been excessive and we can expect the price to make a downward correction or a reversal. On the other side an oversold market signals a possible increase in prices.”
Macroption; Official Website; RSI Overbought and Oversold Condition; 25.11.2018
“The Relative Strength Index (RSI), developed by J. Welles Wilder, is a momentum oscillator that measures the speed and change of price movements. The RSI oscillates between zero and 100. Traditionally the RSI is considered overbought when above 70 and oversold when below 30. Signals can be generated by looking for divergences and failure swings. RSI can also be used to identify the general trend.”
Fidelity; Official Website – Learning Center; Relative Strength Index (RSI); 25.11.2018

Skycoin – Skywire Statistics – 31072017

Over two months have passed since the official launch of the Skywire testnet on May 22, 2018. Two weeks after launch, we already saw 4000 nodes in the network. As of today, there are over 7000 nodes participating in the testnet from all over the world. On July 31, 2018 I made a snapshot of all miners that were online at that point and received a sample size of 6582 nodes. Each of these nodes comes along with a node key, an app key and a location. Since node key and app key are both unique per node, I used the location data to process it statistically. The results from this analysis are displayed in five infographics. Two of them show the nodes per continent and the top eight countries with the most nodes in the testnet. The other three infographics show maps of different regions in which the nodes per country or state are shown as a number on a flag. Only countries/states with at least ten nodes where considered in the graphics. Check it out:
The number of participants in the Skywire testnet is growing. Over the past two months, about 2500 nodes joined the network. Most of the participants are from the United States (2300 nodes) and Europe (2080 nodes). The locations that contain the most nodes are California (747 nodes), Shanghai (395 nodes) and Texas (208 nodes), while not a single node is hosted in other countries like Poland and Turkey. As we could already conclude from the first Skywire node location analysis, there are local network effects that make the network grow. I can’t tell if this is coming from people who motivate their friends to build miners or people build them on their own and place them in various residences, but local network effects seem to be existing. Furthermore, the regions with the most nodes right now might also be the ones that grow the quickest, if there are already enough people at this point to spread the word about Skycoin. It is actually a good thing to see nodes popping up in huge numbers in similar regions, because these nodes will be able to connect to each other once the Skywire meshnet is running.
Updated Version
The first article about Skywire statistics was originally published on June 3, 2018. This update contains new numbers captured on July 31, 2018. If you want to read the first version of Skywire statistics, you can find it here: Skywire Statistics 03.06.2018

Skycoin – Chain Analysis

Chain Analysis of Skycoin
A side effect of the Skycoin blockchain being publicly visible is, that it enables users to track every transaction and to create statistics about coin movements. That is of course nothing new, other blockchains are publicly available as well and have provided automated statistics about their usage (the chart section on Etherscan for example). However, I haven’t seen many statistics about the Skycoin blockchain, even though an analysis of its blockchain offers interesting insights. Therefore, I decided to create some statistics about Skycoin’s blockchain, which I will present to you in this article. The data used for this analysis starts in block 1 (start of Q2 2015) and ends in block 43753 (end of Q2 2018).

Transactions over Time
Let us start with the easiest analysis, the growth of transactions over time. Block 1 of Skycoin’s blockchain was issued on April 02, 2015. Three years have passed since then and the transaction volume is steadily growing, though the usage started out slow. In 2015 the blockchain registered 262 transactions, which increased to 311 transactions in 2016. That changed in 2017. With increasing public awareness and Skycoin’s first exchange listings on C2CX and Cryptopia, the usage of the network increased in every quarter. In Q2 2017 it was the first time over a thousand transactions, in Q4 2017 the blockchain registered 4500 transactions. This growth continued in 2018, Q1 included 13k Skycoin transactions, Q2 about 24k transactions. A great amount of these transactions are interactions with the exchange wallets, 66.6% of the transactions in Q2 2018 were either incoming or outgoing transfers of the Binance, C2CX or Cryptopia withdrawal addresses. I outlined the amount of interactions with the withdrawal addresses with own colors in the following chart, where you can also see the growth of Skycoin transactions over time.
25k20k15k10k5k02015Q12017Q22017Q32017Q42017Q12018Q220182016Other TransactionsBinanceC2CXCryptopiaSkycoin Transactions over Time
Address Growth
The increase of transactions came alongside an increase in unique addresses, that held a balance higher than 1 Skycoin. At the end of 2015, just 98 addresses held more than 1 Skycoin. This number increased to 166 addresses at the end of 2016. However, the growth in addresses and therefore the distribution of Skycoin really took off in 2017 after the first exchange listings on C2CX and Cryptopia. In the middle of 2017 the circulating supply of Skycoin was still distributed among 400 addresses, while this number increased to 2000 addresses at the end of the year. This growth has continued in 2018, at the end of Q2 2018 7856 addresses held at least 1 Skycoin. This indicates, that the circulating supply of Skycoin is distributed among 20 times as many addresses than it was one year ago and is therefore in an ongoing decentralization process. In the graphic below you can see the growth of addresses with at least a balance of 1 Skycoin over time, it also differentiates the addresses according to the amount of Skycoin held by them.
8k6k4k2k02015201720182016> 1 Skycoin> 100 Skycoin> 10 Skycoin> 1000 SkycoinAddresses with at least 1 Skycoin
Coin Hour Lottery
Another interesting analysis can be made on Coin Hours. Even though Coin Hours are worth nothing right now (which may change in the future), some Skycoin holders are very keen on increasing their Coin Hour stack. This has led to several users splitting their Skycoin withdrawals from exchanges into numerous smaller amounts of Skycoin, to receive a greater amount of Coin Hours with multiple withdrawals, than they would get with one withdrawal of their whole amount. The amount of Coin Hours sent by the exchange certainly depends on the amount of withdrawals prior to an individual withdrawal as well as it depends on the amount of Skycoin in the address used by the exchange and the amount of Skycoin withdrawn. On average per withdrawal, Binance sent 118k Coin Hours, C2CX sent 85k Coin Hours, whereas Cryptopia sent only 21k Coin Hours. In the following graphic you can see the percentage of Skycoin withdrawals, that included a specified amount of Coin Hours for Binance, C2CX and Cryptopia withdrawals:
100%80%60%40%20%0>1M>250K>100K>25K>10k>1kCoinHoursCoin Hours sent by ExchangesBinanceC2CXCryptopia
Movement of Skycoin distributed in 2015
Alongside the first block issued in April 2015 the first distribution event of Skycoin took place,1 where the coins were sold for 0.1 USD apiece.2 At the end of 2015, 97 addresses held a sum of 540k Skycoin. With the price currently at 7 USD, the first investors are at a 70x of their initial investment and therefore might have a high incentive to sell. Because of their low-entry price, selling their coins could lead to huge sell walls, that could slow down price growth. However, if they already sold a sizable portion of their holdings over the past few years, they shouldn’t be able to suppress the price. So, it should be interesting to see what happened to these coins. I analyzed the movement of the amounts held by the early investors of 2015 and checked, whether they are still holding their coins, moved their coins to an exchange (Cryptopia, C2CX or Binance) or sent their Skycoin to another address that obviously belongs to another person.

The amount of Skycoin held by the 97 addresses decreased over time. Prior to the first exchange listings on Cryptopia and C2CX in Q2 2017, 94k Skycoin were moved to other addresses. As soon as Skycoin was listed on several exchanges, profits were taken over time. 83k Skycoin were sold on exchanges in Q2 2017, 20k Skycoin were sold in Q3 2017. In Q4 2017 and Q1 2018, just 3k Skycoin were sold per quarter. More coins were sold in Q2 2018, where 45k Skycoin were sold on Binance and 10k were sold on Cryptopia.

So, the situation on June 30 of 2018 is: Of the 540k Skycoin distributed in 2015, 269k are still held by the addresses (49.8%). 165k were sold on Binance, C2CX or Cryptopia (30.6%) and 106k Skycoin were moved to other addresses (19.6%).
600k500k400k300k200k100k02015Q22016Q32016Q42016Q12017Q22017Q32017Q42017Q12018Q22018Q12016Sent toother addressSent toExchangeHoldingTracking Skycoin distributed in 2015
Movement of Skycoin distributed in 2016
In 2016, the project put about 1.5 million Skycoin in circulation. I think the movement of the coins distributed in 2016 is also very interesting to analyze, since the entry price for these coins was also way lower than it is today. It might not have been as low as 0.1 USD as we saw in 2015, but since they have sold Skycoin at a rate of about 2500 Skycoin per 1 Bitcoin,2 the price should have been somewhere around 0.1 USD – 0.4 USD.3 This means most of these investors are still at a 20x of their investment and might want to take a profit and could therefore suppress the price. Adding to that, I think that not all of the coins were sold to private investors but were also used to reward contributors to the project.

The first bigger movement of the coins distributed in 2016 happened in Q2 2017, where 300k Skycoin were sent to exchange addresses and 100k moved to other addresses. I would guess the 300k Skycoin were sent by the team for the distribution event on C2CX in Q2 2017, paired with the team generally providing the exchanges with an initial amount of Skycoin to facilitate trading liquidity.4,5,6 Over the next nine months, only 70k more Skycoin were moved to exchanges, so only a smaller amount of profits was taken. However, that changed in Q2 2018, where about 750k Skycoin were moved to exchange addresses, 715k of them to Binance. All of these transfers to Binance were made from June 08 to June 13. This also matches exactly with the price decline during these 6 days. In my opinion, selling coins that were held for multiple years this rapidly without caring about crashing the price is an indicator for either selling stolen coins7 or complete panic selling, which probably both were the case here.

Summarizing, the situation on June 30 of 2018 is: Of the 1.46 million Skycoin distributed in 2016, 136k are still held by the addresses (9.3%). 1.115 million were sold on Binance, C2CX or Cryptopia (76.4%) and 209k Skycoin were moved to other addresses (14.3%).
1.5M1.2M.9M.6M.3M0Q12017Q22017Q32017Q42017Q12018Q220182016Tracking Skycoin distributed in 2016Sent toother addressSent toExchangeHolding
The Whale
As if a selloff of more than 700k Skycoin in one week wasn’t enough, on June 18, another address owner decided to sell all of his/her coins. This address received 1 million Skycoin in Q3 2015. I assume, that it is either owned by a whale or a consortium of investors. The coins in it were held for over two and a half years. However, on June 18, 2018, the entire balance of 1 million Skycoin was moved to Binance. Most of these coins were presumably sold on June 18 and June 19, with Skycoin’s trading volume skyrocketing on these two days.

Overall Situation
This selloff of about 20% of Skycoin’s circulating supply in a short time-frame has led to the price declining from 25 USD to 5 USD. However, as bad as this selloff was for the price in the short-term, in my opinion it is good for the price of Skycoin in the long-term. From the total of 3 million Skycoin distributed in 2015 and 2016, only 404k are still held by the early investors (13.5%). The remaining coins have been sold and are therefore redistributed to smaller investors, who might not have a high incentive to sell, until Skycoin’s price reaches a new all-time high. In case there is a huge interest in the market to buy Skycoin in the future, the overall selling pressure should be way lower than it was prior to the massive selloff.

As a summarizing overview the following chart shows the amount of coins held, sent to other addresses or sent to exchanges. It also shows how many Skycoin were sold per exchange, including Binance, C2CX and Cryptopia.
3.0M2.5M2.0M1.5M1.0M0.5M02015Q22016Q32016Q42016Q12017Q22017Q32017Q42017Q12018Q22018Q12016BinanceC2CXCryptopiaSent toother addressHoldingSkycoin distributed in 2015 and 2016
We looked at several aspects of Skycoin’s blockchain in this article. First of all, we saw that the amount of transactions in the network is constantly growing. Speaking about Coin Hours transferred from exchanges, we found out that there has been a higher chance in the past to gain a large number of Coin Hours with a withdrawal from Binance and C2CX rather than from Cryptopia. The steady growth of addresses over the past few years that hold at least 1 Skycoin was documented as well. In addition to these general statistics, we tracked the movement of Skycoin distributed in 2015 and 2016 and found out, that only 13.5% are still held by the early investors, while 86.5% have been moved or sold. This led to the conclusion, that the distribution of Skycoin is currently in an ongoing decentralization process with coins moving from few large investors to many smaller investors. This should be a good thing for the future, since it makes the circulating supply less centralized and relieves Skycoin’s overall selling pressure.

“This IPO is for developers, people who have been following for a while and experienced people who know what they are doing. This is more of a private offering and not really an IPO. The purpose is to get Skycoin trading and work on bugs.”
skycoin; Bitcointalk; [SKY] Skycoin Launch Announcement; 07.02.2015
“2500 Skycoin per Bitcoin. Which is about $0.10 / Skycoin. Bitcoin to USD is too volatile so just set it to that. … I think we started getting bitmessage requests for IPO in about two months ago and are just sending out coins now. … There are about fifty people in the IPO so far. The average amount is $2000. About half the coins in the allotment are already accounted for. Very good so far.”
skycoin; Bitcointalk; [SKY] Skycoin Launch Announcement; 18.04.2015
“Yes we reserved 2% of the coins for people on the Bitcoin talk thread, at the ICO price. Bitmessage did not work for a lot of people. We tried to do sale over Tox bot and that failed and people had problems. Also, no wallet builds and difficult to buy. We have developers we are reserving coins for, because they have not been able to get compilation working on their platform.”
skycoin; Bitcointalk; [SKY] Skycoin Launch Announcement; 10.10.2016
“We have an invite only ICO on third party platform, that you need QR code to access. 25 people have code right now, and it is open to anyone who posted on the Bitcoin talks thread in the past 4 years. More information later.”
skycoin; Bitcointalk; [SKY] Skycoin Launch Announcement; 23.11.2016
“Now we are testing ICO on third party website.”
skycoin; Bitcointalk; [SKY] Skycoin Launch Announcement; 25.12.2016
“Last distribution was 500,000 coins. That took 4 months to sell. But then in last month someone wrote one article and skycoin was put on one website and whole ICO sold out in two weeks”
Synth; Telegram; Skycoin main channel; 22.04.2017
“I think they were stealing coins from other investors and “holding the coins” for them. Maybe they received 1 million yuan from 3 different investors and then only had 1 million yuan of coins and told them all that the “coins” in the wallet were theirs. … I think they even stole Skycoin from coins that Jane/Shellpay had and sold to Chinese users early on. There was an airdrop of 1 million coins for about 1 yuan and they may have stolen 400,000 to 600,000 coins from the air drop. … Some of the stolen coins are from the 2nd tranche of distributed skycoin, with only 3 transactions from genesis. Which is ridiculous.”
Synth; Telegram; Skycoin main channel; 20.06.2018