1.
Framework for
Crypto Asset Analysis
With Z-Cash + 0x Protocol Case Studies

2.
Context
A crypto asset is any asset where questions of ownership are
settled via a blockchain based ledger
A blockchain based ledger is a secure distributed database
There are two main types of crypto assets today:
•Type 1 is a blockchain’s native currency.
•“Protocol Coins”
• Examples include BTC, ETH, ZEC, and XRP.
•Type 2 are application specific tokens that exist on top of different blockchains
• “AppCoins”
•Examples include StorJ, Steem, and Argur

3.
Evaluating a Crypto Project
• Market
• What are they building?
• What problem is being solved? Is it useful?
• Implementation
• Is the underlying technology feasible?
• What is the quality of the project’s members and its governance?
• What is their level of commitment and true motivation?
• Value Creation
• What security or instrument are you purchasing?
• What is the expected upside potential?
• How do you harvest your investment outcome in the future?
• Competitive Advantage?
• What advantages does it have against potential competitors targeting the same market or a future fork?
Similar to Evaluating a Software Startup

4.
Token Specific Questions
• What type of token Is It?
• What function or utility does it perform?
• Is it absolutely necessary?
• Can you describe a viable economic model behind it?
• How does value flow from the outside of the ecosystem to the inside? (Liquidity)
Economics
Regulatory
• In what jurisdiction is the company incorporated?
• What legal structures are being disclosed?
• What is the token distribution structure?
• How Is the token a utility to the operations of the business?
• When does the token become available? (Should be after the product is launched)
Source:
https://coincenter.org/entry/could-your-decentralized-token-project-run-afoul-of-securities-laws

5.
Potential Token Features
Type Examples
Right Ownership, Product Access, Voting
Value Exchange Work Rewards, Buying, Selling
Toll Running Smart Contracts, Usage Fees
Function Joining a Network, Connecting with Users
Currency Payment Unit, Transaction Unit
Earnings Profit Sharing, Inflation Benefits
Source:
http://startupmanagement.org/2017/06/10/tokenomics-a-business-guide-to-token-usage-utility-and-value/

6.
Market Overview
Zcash is a cryptocurrency that offers privacy and selective
transparency of transactions.
Zcash payments are published on a public blockchain, but the
sender, recipient, and amount of a transaction may remain private.
Zcash builds on the existing work from the Bitcoin core team to
enable privacy preserving transaction data using zero-knowledge
proofs (called zk-SNARKs.)
Zcash is optimal for any transactions where financial privacy is
desired (most.)
Competing privacy centric crypto assets include Monero + Dash.
Zcash

7.
Implementation
Zcash
Zero-knowledge proofs help make Zcash “untraceable” by creating
private transactions on the public Zcash blockchain.
Transactions on Zcash cryptographically obscure the addresses of the
sender and recipient, as well as the value one address sends to
another.
The cryptography behind Zcash is both new and highly experimental.
The Zcash protocol also needs a special trusted setup phase for
technical reasons.
More detail on set-up ceremony + potential technical challenges:
https://petertodd.org/2016/cypherpunk-desert-bus-zcash-trusted-
setup-ceremony#zk-snarks

8.
Team
Zcash
The Zcash team includes the scientists who invented the Zerocash
protocol as well as engineers with a specialized track record in open
privacy technology.
Zooko Wilcox is Founder of Zcash. He is recognized for his work on
DigiCash, Mojo Nation, and Tahoe-LAFS.
In addition to the core team, Zcash counts many leaders in the Bitcoin,
Ethereum, and academic communities as investors and advisors.
More detail on the team: https://z.cash/team.html

9.
Financing History
Zcash
Zcash raised $1 million in their seed round.
In exchange for $1 million, investors in the seed round received 10.15% of equity in
the Zcash Electric Coin Company + 214,000 ZEC over the first year (~$4.66 per ZEC.)
Later, Zcash raised an additional $2 million in their second financing round.
In exchange for $2 million, investors in this round received 6.25% of equity in the
Zcash Electric Coin Company + 132,000 ZEC over the first year (~$15.15 per ZEC.)
Investors in the company include Naval, Pantera Capital, Digital Currency Group,
Fenbushi Capital, Evolve VC, and others.
At the current price of ZEC ($388.18) - the holding value of the ZEC in the seed round
is ~$83m and the current holding value of the ZEC in the second financing round is
~$51m.

10.
Value Accretion
Zcash
Zcash's supply model has a fixed and known issuance model
that is cut in half approximately every four years (with a
maximum of 21,000,000 units.)
As the number of transactions on the network increase, ZEC will
continue to increase in value.

11.
Asset Performance
Zcash

12.
Market Overview
0x is an open protocol that facilitates low friction peer-to-peer exchange of tokens
on the Ethereum blockchain.
The protocol is intended to serve as an open standard and common building
block, driving interoperability among decentralized applications that incorporate
exchange functionality.
0x is not a decentralized exchange, it is a protocol for exchange.
Interoperability via 0x should dramatically better enable liquid markets for
application tokens increasing the total value of the Ethereum ecosystem.
Competition from decentralized exchanges include Ether Delta, Oasis Dex, and
Shapeshift. More traditional centralized exchanges include Gemini, Kraken and
GDAX (Coinbase.)
Pronounced: “Zero-Ex”
0x Protocol

13.
Implementation
0x Protocol
0x enables interoperability by pulling exchange functionality from the application
layer into the protocol layer.
Trades are executed by a system of Ethereum smart contracts that are publicly
accessible, free to use and that any decentralized application (dApp) can hook
into.
DApps built on top of the protocol can access public liquidity pools or create their
own liquidity pool and charge transaction fees on the resulting volume.
The protocol does not impose costs on its users or arbitrarily extract value from
one group of users to benefit another.
Decentralized governance is used to continuously and securely integrate updates
into the base protocol without disrupting dApps or end users.

14.
Team
0x Protocol
0x Protocol was started by Will Warren and Amir Bandeali.
Will previously worked as a graduate research assistant at Los
Alamos National Laboratory conducting applied physics
research. Amir previously worked in fixed income trading at
DRW.
The team is complimented by a group of advisors from other
crypto projects + companies.

15.
Financing History
0x Protocol
Polychain Capital, Blockchain Capital, Pantera Capital, Jen
Advisors and FBG Capital participated in the initial investment
round for the protocol project.
In exchange for their initial investment in the project, each
groups receives a 30% discount on its future tokens.
Native Protocol Token is ZRC.

16.
Value Accretion
0x Protocol
The total supply of ZRX will be fixed at 100,000,000.
Their value will be proportional to their utility within the system and
grow as the amount of trading activity increases over time.
There is currently no for-profit entity for the 0x Protocol.
Founders will hold 10% of the total tokens + generate a return from
participating in the growth of value in the underlying token protocol.
The 0x Protocol Foundation (a nonprofit organization based in the
Swiss Canton of Zug) will hold 18% of the total tokens to fund future
development.

17.
0x Protocol
0x is a relatively new project.
At launch, Augur, Aragon, Maker, and Melonport announced they
would be integrating the protocol into their application tokens.
The project is currently planning to launch the tokens via ICO in
late Q3 or early Q4 of 2017.
Performance

18.
Example Analysis of Other Tokens
• Kibo - Global Lottery Platform
• https://medium.com/@danielzakrisson/ethereum-evaluation-kibo-ico-fd5f9a3fcd73
• SingularDTV - Blockchain Entertainment Studio
• https://medium.com/@danielzakrisson/the-crowdsale-analyst-singulardtv-three-projects-in-
one-713e819aec16
• Golem - Decentralized Super Computer
• https://medium.com/@danielzakrisson/the-crowdsale-analyst-preliminary-thoughts-9c764a13a9d2
• Smith & Crown - Crypto Asset Investment Research
• https://www.smithandcrown.com/research-search/