N.B: In the spirit of full transparency, the following Coin Report on Lattice is a Sponsored Post.
Welcome to the 70th Coin Report. In today’s report, I will be assessing the fundamental and technical strengths and weaknesses of Lattice. This will be comprised of an analysis of a number of significant metrics, an evaluation of the project’s community and development and an overview of its price-history. The report will conclude with a grading out of 10. I hope you enjoy the read!
For today’s report, I will be looking at a project very much in its infancy, thus lacking in certain aspects but nonetheless one of great interest as we move into 2021. Topics covered include decentralised finance and decentralised exchanges, liquidity aggregation, Constellation and its Hypergraph, governance and more.
I hope this report will prove objective where it must be and fair on more subjective matters. For those who’d like to learn a little more about Lattice prior to reading this report, here are some primary links:
Hashing Algorithm / Token Type: ERC-20
Sector: DeFi / Exchange
Exchanges: Uniswap, Bithumb Global, Hoo.com, Bilaxy and MXC
Lattice was conceptualised in 2020 by Ben Jorgensen and Mathias Goldmann (part of the team behind Constellation), following the launch of Constellation’s Hypergraph. Lattice launched with a private sale that raised over $3,000,000 from backers such as Hillrise Capital, Chronos Ventures, Moonrock Capital, FBG Capital, Alphabit and more. Subsequently, they raised further funding three rounds of public sales on Hoo.com, Bitribe and BitMart, raising $500,000 in total for 1,428,570 LTX, at an average price of $0.35 per token.
LTX was created on the ERC-20 standard, with a maximum supply of 100,000,000 LTX. Regarding token allocation, 18% of this was allocated to the private sales, 7% is allocated for public sales, 15% is allocated to the team and advisors, 10% to the reserve, 5% to marketing and 45% to liquidity mining for the future.
Lattice is expected to release its MVP later this month, with full public release expected in Q2 2021.
As LTX has only been in existence for under a month, there is very little price-history available. That said, I will cover what I can in the Technical Analysis section. For now, it will suffice to say that the all-time high formed during early trading around $0.23 according to CoinGecko, with the all-time low forming at $0.073 in late November.
Lattice is primarily focused on providing DeFi solutions in the form of its decentralised exchange, which will seek to improve upon the infrastructure and functionality of existing solutions.
As stated in its whitepaper:
“Using the Constellation protocol, Lattice is a decentralized application, DeFi solution, built on the Constellation Hypergraph infrastructure with seed investors Alphabit and FBG Capital.
The Lattice platform offers the following advantages and features:
- AMM based liquidity pool that allows lenders to earn transaction fees on their deposits (farming).
- Smart routing algorithm for trade execution across different platforms.
- Advanced platform for pluggable institutional grade order matching algorithms that are asset specific (multiple AMMs).
- A governance token called “Lattice (LTX)” which gives holders certain rights
in regards to economic parameters like transaction fees and inflation/deflation. Lattice will be an evolution of existing DeFi solutions by providing better liquidity and more efficient asset-specific automated market making algorithms for traders and liquidity providers. The infrastructure enables a higher assurance in crypto asset trading and settlements. This solution will further advance the blockchain industry with improved financial instruments that are cost effective and have the speed, security, and scalability that traditional securities asset traders are accustomed to.”
I look forward to evaluating their progress.
Let’s begin with some Metric Analysis:
Below are listed a number of important metrics, all of which are accurate as of 4th December 2020. For anyone reading this who has yet to read a Coin Report, it might be worth reading this section of the first report, where any potentially unfamiliar terms are explained. For any terms or metrics specific to this post, I will provide explanations besides the figures.
Price: $0.107 (562 satoshis)
Circulating Supply: 14,533,333 LTX (Confirmed by team)
Total Supply: 100,000,000 LTX
Maximum Supply: 100,000,000 LTX
% of Max. Supply Minted: 100%
Network Value: $1,551,461 (81.69 BTC)
Network Value at Max. Supply: $10,675,190
Exchange Volume: $147,053 ($30,616 excluding wash)
Exchange Volume-to-Network Value: 1.97% excluding wash
Average Price (30-Day): $0.117
Average Exchange Volume (30-Day): $68,375
Average Network Value (30-Day): $1,700,400
Average Exchange Volume (30-Day)-to-Network Value: 4.02%
Volatility* (30-Day): -0.161
Average Daily On-Chain Transactions (30-Day): N/A
Average Daily Transactional Value** (30-Day): N/A
NVT*** (30-Day): N/A
% Price Change USD (30-Day): N/A
% Price Change USD (1-Year): N/A
USD All-Time High: $0.235 (CoinGecko)
% From USD All-Time High: -54.3%
Premine % of Max. Supply: N/A
Premine Location: N/A
Liquidity (calculated as the sum of BTC in the buy-side with 10% of current price across all exchanges): 0.63 BTC ($633k of liquidity available on Uniswap, however)
Liquidity-to-Network Value %: 0.77%
Supply Available on Exchanges: 3,637,749 LTX including Uniswap liquidity
% of Circulating Supply Available on Exchanges: 25.03%
*Volatility is calculated by taking the average price over the given time-period, calculating the difference between it and the highest price and it and the lowest price over that same time-period, and multiplying those figures together. The closer to 0, the less volatility during that period, and vice-versa. Read this for more on volatility.
Supply Emission & Inflation:
Block Reward Schedule: N/A (All LTX in existence, though 45% is reserved for liquidity mining in the future)
Average Block Time: N/A
Current Block Height: N/A
Annual Supply Emission: 0
Annual Inflation Rate: 0%
Circulating Supply in 365 Days: N/A
The following details were taken from this source.
Public Sale Period: 5th November 2020
Total Tokens: 100,000,000 LTX
Total Tokens Available for Public Sale: 1,428,570 LTX
Total Raised: ~500,000
Average Price Per Token: $0.35
Total Tokens Sold: 1,428,570 LTX
- Private Sale raised ~$3mn.
- IEO was conducted in three rounds, one on three separate exchanges: BitMart, Hoo and Bitribe. These three exchanges conducted an orchestrated dump of LTX in order to fleece Lattice of capital via a contractual clause, but this was later reimbursed as evidence came to light and LTX has been delisted from two of the three exchanges.
- Public Sale: 7,000,000 LTX
- Private Sale: 18,000,000 LTX
- Marketing: 5,000,000 LTX
- Liquidity Mining: 45,000,000 LTX
- Reserve: 10,000,000 LTX
- Team and Advisors: 15,000,000 LTX
Address Count: 13,258
Supply Held By Top 10 Addresses: 36.82%*
Supply Held By Top 20 Addresses: 56.19%*
Supply Held By Top 100 Addresses: 80.13%*
Inactive Address Count in Top 20 (30 Days of No Activity): 10**
*Calculated as % of circulating supply, excluding team and exchange addresses but including subsequent private addresses.
**Excluding team and exchange addresses.
Unlike for many reports, there is a little less material to work through here, as Lattice is a project very much in its infancy. I’d like to begin by looking at the General metrics before moving onto Supply Emission and Inflation and then concluding this section with some Distribution analysis:
Firstly, let’s take a look at Lattice’s Volatility, which came in at a moderate level. I calculated its 30-day figure to be -0.161, which places it in the middle of the pack among prior reports. This is neither indicative of tight consolidation and thus potential accumulation nor price being mid-cycle. We will take a closer look at this later in the report.
Moving on, let’s take a look at the two Liquidity-related metrics:
For buy-side Liquidity, I calculated that there was 0.63 BTC of buy support within 10% of current prices across listed exchanges (not including $633k of liquidity on Uniswap), equating to 0.77% of its Network Value. This is a relatively high figure, placing Lattice 8th-highest. This is often the case, however, with microcaps, as even small amounts of nominal buy-side liquidity can give high values for this metric. There is also over $600,000 of liquidity for LTX on Uniswap, though this is of course not calculated in the same way as liquidity within 10% of price in a centralised orderbook.
Looking at the sell-side, I calculated there to be 3,637,739 LTX available for purchase at any price on the orderbooks and on Uniswap, equating to 25.03% of the circulating supply. This is the highest figure recorded in these reports and is highly indicative of the speculative nature of current holders. That said, around 3mn LTX of this is pooled on Uniswap, thus may be predominantly liquidity provision from Lattice itself as opposed to individual sellers. If we exclude Uniswap supply, there is ~600k LTX on centralised orderbooks at any price, which is still over 4% of the current circulating supply, thus remains a high figure.
Before I move on from the General metrics, let’s take a look at those related to volume:
Lattice traded a reported $147,053 of Exchange Volume over the past 24 hours, equating to 9.48% of its Network Value; a fairly impressive figure. Unfortunately, it is likely to be somewhat of a false one, although through no fault of the project itself. If we discount the wash trading, Lattice traded $30,616 in the past 24 hours, equating to a more modest 1.97% of its Network Value. Further, its Average Daily Volume for the past 30 days was $68,375 (accounting for wash), equating to 4.02% of its Average Network Value for the same period. This is promising, as it indicates some degree of sustained speculative interest in the project, though by no means being particularly strong evidence of this.
Now, with regards to Lattice’s supply emission, in short, there is none. This is due to all LTX being in existence already. That said, 45% of the LTX is reserved for liquidity mining in the future, amounting to 45mn LTX. This will eventually join circulation but there is no indication as to when this will begin just yet. Thus, current inflation for LTX is 0%. Moreover, in the future, there may well be a buy-back-and-burn mechanism that actively causes deflation.
Let’s wrap up this section with a look at Distribution:
Looking at the Lattice’s rich-list, I found that there were 13,258 holders, which is among the top-third of prior reports. This – despite Lattice’s short existence – is quite impressive, on the surface.
Of these holders, the top 10 addresses control 36.82% of the circulating supply; the top 20 control 56.19%; and the top 100 control 80.13%. This is calculated excluding the supply controlled by the team and exchanges, much of which is currently locked out of circulation anyway. Addresses #1-#6 and #8 are all team or exchange-controlled addresses and control a huge 86.6mn LTX (86.6% of the maximum supply). Of that, Uniswap and MXC addresses contain 3.8mn LTX. If we do include these addresses, then the top 10 control 88.9% of the maximum supply, the top 20 control 92.9% and the top 100 control 98.3%. So, the bottom 13,158 addresses only control 1.7% of the maximum supply.
Regarding the activity of the top 20 holders (excluding team and exchange addresses), I found that 10 were inactive over the past 30 days (the token has only been in existence for 31, to be fair). Of the remaining 10, 9 accumulated during that period and 1 distributed, with net cumulative inflows of 3.82mn LTX, mostly from Uniswap, equating to 26.3% of the circulating supply.
Let’s now take a look at the Lattice community:
Twitter Followers: 20,309
Average Twitter Engagement: 0.26%
Facebook Likes: 5,565
Facebook Posts (30-Day): 13
Average Facebook Engagement: 0.43%
Lattice has a fairly large Twitter audience of 20,309 followers, which places it in the top third among coins previously reported on. That said, it has quite poor engagement at 0.26%, which is a shame. This is 5.8x greater than the average across all industries of 0.045% and 9.6x greater than the average in the Tech and Software industry of 0.027%; however, relative to other Coin Reports, it is 10th-lowest. Clearly, there is more work to be done here on fostering greater engagement from the large audience it already has.
Now, with regards to Facebook, Lattice has a smaller audience of 5,565 Likes, but the team are clearly committed to keeping this audience informed just as well as on Twitter, with 13 posts in the past 30 days, which is very positive, as so few projects put any focus on social platforms outside of Twitter. The engagement here is also a little bit stronger at 0.43%. This is 4.8x greater than the average across all industries of 0.09% and 21.5x greater than the average in the Tech and Software industry of 0.02%. Relative to prior reports, it is in the top third.
There is no Discord available for Lattice.
The Lattice Telegram group has 22,421 members.
I have summarised the key takeaways from the group below:
- There are also 17,491 members of the Announcements channel.
- There is a decent amount of discussion in the group, although relative to its group size it is not particularly active. I have seen much smaller Telegram groups with significantly more discussion.
- The community is primarily excited about the DEX next year (Lattice’s flagship DeFi solution), given the trajectory of DeFi in 2020.
- The Lattice IEO had some issues, with all three exchanges on which it was hosted complicit in a scheme to dump LTX and invoke a contractual clause that forced Lattice to expend resources. This eventually was found out and Lattice were reimbursed by these exchanges but delisted by two of them.
- The Lattice Exchange is expected for its full public launch in Q2 2021. The Lattice MVP release is expected this quarter, with Hypergraph support expected to be implemented in Q1 2021. Further, Oraclization is expected by Q4 2021.
- Although there is no clear figure to be found on coin tracker sites, the community and admins make it clear that the circulating supply is currently 14.5mn LTX.
- Trading fees on Lattice will be used in part for a buy and burn mechanism, whereby a percentage of these fees will be used to purchase LTX off the market and burn them, thereby causing deflation of the supply.
- Regarding activity of admins, they respond promptly to community queries.
- The phase 1 launch of the exchange will have liquidity aggregation and asset-specific automated market making algorithms, but the benefit of near-zero fees will come in phase 2, when the exchange is supported by Constellation’s Hypergraph. The team behind Lattice are also those that founded Constellation.
The Lattice BitcoinTalk thread was created on September 24th, 2020 and has since generated 167 posts spanning 9 pages in 71 days. This equates to 2.35 posts per day, on average.
The thread is very much active, having only been created recently, and the community are engaged in regular discussion, whilst developmental updates are published here also. I will refrain from covering these here, as I will be doing so later in the report.
And that concludes my evaluation of the Lattice community.
Let’s take a look at the developmental progress since inception, as well as its plans for 2021:
For the following Development analysis, I will be evaluating project leadership, the website, the roadmap, the whitepaper, the wallets and finally providing a general overview:
The Lattice team is comprised of 9 employees, as per LinkedIn, with 6 core team members listed on the website along with 3 advisors. There is no indication as to whether they are currently hiring. The founders of Lattice are also the founders of Constellation.
More specifically, the core team consists of:
And the advisory board consists of:
The website can be found here.
The website isn’t particularly great, though I would imagine it is a placeholder for when the exchange itself is launched.
That said, the homepage provides us with a brief overview of the mission of Lattice, which is to utilise Constellation’s Hypergraph to build a decentralised exchange that improves upon existing solutions, primarily via liquidity aggregation, advanced automated market making algorithms and far cheaper transaction fees.
We also find a list of venture capital firms that have invested in the project, including Chronos Ventures, Alphabit, Hillrise Capital, Moonrock Capital, FBG Capital and Global Digital Assets.
Scrolling down the homepage, we find a little more detail on the project itself, with the exchange stated to be A New Paradigm of Decentralized Finance. More specifically, Lattice will advance on existing solutions by implementing asset-specific AMM algorithms, whilst improving upon speed, security and scalability to the level of traditional solutions. At present, base layer protocols upon which existing dApps are built are not suitable for significant improvements, as they are limited in their scalability. Lattice will be utilising the Hypergraph Transport Protocol by Constellation, which is built on a DAG (see my report on Constellation for more on this). This protocol dramatically reduces transaction costs and is infinitely scalable, thus passing on those benefits to the Lattice Exchange and subsequently the traders. Four primary platform features are highlighted here: a flexible liquidity pool that allows users to lend and earn fees on liquidity deposits; automated market making; asset-specific and multiple AMM algorithms; and the Lattice Governance Token (LTX), which will allow holders to govern the exchange.
As we come to the footer of the website, there is an invitation to join the closed beta, as well as links to the whitepaper (covered below) and recent press releases and articles, as well as links to social platforms.
There is no traditional roadmap available, but an article highlighting Lattice’s short-term expectations can be found here.
Within the article, we are provided with a brief overview of the October and November 2020 goals for Lattice, with October goals comprising a newsletter launch, KYC/AML launch for the private pre-sale and the launch of the testnet MVP for the exchange. For November, Lattice were aiming for a Uniswap listing (which has been completed), as well as an airdrop of LTX to Molly wallet users (also completed).
Beyond this, there is not a lot else here, which is a shame. Given that Lattice is in its infancy, it would be supremely valuable for potential new users or speculators to have a more detailed roadmap for the development of the exchange, at least for the upcoming quarter if not for the first half of 2021. This would allow for greater transparency and foster community growth, as users would be able to better understand the vision of the team and precisely how they plan to approach development. Sure, some details would likely need to remain hidden, but I have no doubt that more detail than this can be provided to the community.
The whitepaper can be found here.
The whitepaper is 19 pages in length and I have provided my key takeaways from it below:
- DeFi has grown to over $10bn of captured market capitalisation over recent months and there is over $8bn locked and staked in the sector.
- There are various significant bottlenecks to further growth including transaction fees, cross-chain interoperability, network speed, oraclization of data, order matching algorithms and liquidity.
- Interoperability is a requirement for the future of DeFi.
- Current solutions are built on infrastructure that cannot scale efficiently and that is not designed for oraclization of data. In traditional markets, these tools already exist via centralised architecture.
- Constellation’s Hypergraph protocol will be the infrastructure upon which Lattice is built, allowing for significant improvements in DeFi solutions by utilising the protocol’s superior throughput, infinite scalability and near-zero fees.
- Lattice was seeded by Alphabit and FBG Capital.
- Lattice will improve upon current solutions with four primary features: AMM-based liquidity pools, smart routing for cross-platform trade execution, asset-specific AMMs; and the LTX governance token.
- By being built on Hypergraph, Lattice will improve upon Ethereum-based DeFi solutions for speed (the more nodes join the network, the faster it gets); cost (free transactions due to DAG and fees can be added as required); and security (via an immutable audit trail for all data collection and transaction).
- Uniswap, Sushiswap, Yearn, Balancer and Curve are current prominent DeFi solutions. These utilise single platform liquidity pools and AMMs across assets, with trading fees growing rapidly based on the usage of Ethereum. Lattice solves these issues with its proposed structural changes.
- Lattice has a three-phased approach to its launch, with phase 1 in Q4 2020, where the MVP exchange will be released with liquidity aggregation; phase 2 in Q1 2021 with interoperability for the exchange; and phase 3 in Q4 2021 with data oraclization.
- A cross-chain bridge will be developed to connect ERC-20 to Hypergraph.
- LTX – the governance token for Lattice – will grant voting rights for proposals, incentivise liquidity provision and be utilised for transaction fee burns.
As LTX is an ERC-20 token, it can be stored on a plethora of ERC-compatible wallets, including hardware wallets by Ledger and Trezor, web wallets, desktop clients and more.
And that concludes my fundamental analysis of Lattice.
Let’s now take a look at the available price-history:
LTX has only been in existence for a little over a month and thus there is not a great deal of price-history available.
That said, if we look at the chart above, we can see that price had a large 4H range during early trading, before finding a base at $0.15. This support failed to hold and LTX began a slow bleed for several days, breaking to new all-time lows as each support was flipped as resistance. Ultimately, in late December, price formed its current all-time low at $0.07, with that level becoming range support. Since, price has rallied into range resistance at $0.125 and failed to break above, returning to the midpoint of the range around $0.10. I would like to see the token hold this range and break out above $0.125 before considering an entry, which would put the entry at a fully diluted market cap of around $13mn. That said, much of the supply is locked out of circulation, thus the entry would be closer to a $2mn market cap, with little supply emission expected before the release of the Hypergraph-supported Lattice Exchange in Q2 2021. I fully expect price to be trading higher than its current levels for that launch.
And that concludes my evaluation of Lattice.
This report is now over 4,000 words, and it is time to draw it to a close.
My final grading for Lattice is 6 out of 10.*
*Lattice is very much in its infancy at present, and thus it is not possible for me to grade it higher than a 6. However, I am very interested in what they are doing and look forward to re-evaluating their progress next year; no doubt, this grading will be altered to reflect that.
Here, you can find my grading framework, for reference.
Lastly, here is a link to a Google Sheets file with any significant data from previous reports compiled for cross-comparative purposes. I will keep this updated as I continue to write these reports.
I hope this report has proved insightful and that you’ve enjoyed the read! Please do feel free to leave any questions in the Comments, and I’ll answer them as best I can.