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Author: Tuur Demeester

Draft - work in progress

Evaluation framework for Digital Assets, in particular for
cryptocurrencies1

Overall goal of this model is to come up with a rational approach to evaluating Digital Assets,
in particular public cryptocurrency projects. Our list of evaluation criteria is aimed at long
term (+10y) viability prospects, and is set up in declining order of importance, whereby the
next step in the analysis can be skipped if the previous step fails to clear the minimum
threshold. Idea is to be cost effective and avoid overinvesting research efforts in projects
with an high likelihood of failure.

Digital Assets are scored on a scale that goes up to 1,000 points. Projects that achieve the
“minimum standard” for a given criterium are awarded a minimum of 25% of the total
available points; if they achieve “medium standard” they are awarded at least 50% of total
available points.

1/ Developers​ (250 points)
Who is actively contributing code to the project? What is their pedigree? Who has done code
review? Who has provided technical feedback on email lists or other platforms?
Cryptographic protocols are unlike startups in that fundamental design flaws are extremely
difficult to fix as that hurts adoption, makes development on the platform less attractive, and
increases centralization.
Minimum standard​: The top 5 developers do not include people who have been actively
involved in shady / scammy cryptocurrency projects.
Medium standard​: At least one top 10 contributor has made previous significant
contributions in fields such as cryptography, mathematics, computer science, Bitcoin, or
open source platforms.

2/ Security​ ​standards​ (150 points)
What security standards are being used? In the case of experimental technologies at work,
is there a scientific basis that supports their security properties? Is there a clear path towards
decentralization? Are the attack vectors actively being vetted and improved?
Minimum standard​: No use of pre- or pseudoscientific technologies in the architecture
Medium standard​: Reasonable selection of technology suite, endorsed by at least one
reputable Bitcoin developer or high level cryptographer.

3/ Sound economics​ (150 points)
“Why does this need a token?”. Is the additional friction justified if there is a new token? Do
the transaction fee revenues generate sufficient security over time? Do the chosen
parameters imply economically sound trade-offs?
Minimum standard​: Absence of deceptive claims, e.g. that security comes at zero cost.
Medium standard​: Reasonable claims about how token will complement/improve upon
Bitcoin

1
Inspiration was drawn from Bruce Fenton’s ​SPACESUITX​ model.
Author: Tuur Demeester
Draft - work in progress

4/ Scaling prospects ​(150 points)
Is there a credible roadmap towards scaling? Is the token likely to remain fungible, i.e. does
it have sufficient divisibility and privacy built in? The fact that the Bitcoin white paper didn’t
contain these prospects isn’t an argument to not require them today - new protocols are
competing with Bitcoin, which is already scaling.
Minimum standard​: No unproven pseudoscience
Medium standard​: Modular approach to scaling

5/ Code review​ (150 points)
Does the code contain indications of incompetence or breach of industry standards? Does it
reflect a healthy amount of peer review or not?
Minimum standard​: no glaring bugs
Medium standard​: reasonable adherence to industry (open source) standards

6/ Legal risk​ (100 points)
Can the token be seen as an unregistered securities offering? Are developers at risk? Are
the promotional efforts within legal bounds?
Minimum standard:​ If there’s no identifiable utility, it’s not called a utility token
Medium standard:​ Reasonable likelihood of decentralization in the network

7/ Partners​ (50 points)
Does the project have relevant and credible partners? Is it promoted in an ethical way?
Minimum standard​: No serial scammers, convicted felons in the official partner list
Medium standard​: Partners with real world credibility that reasonably will provide additional
value to the project’s long term mission.