RATING CRYPTO ASSET PLATFORMS – EVAI’S DEFI RATING SYSTEM
With the increase in the value and use of cryptocurrencies like Bitcoin, people are now slowly understanding the technology behind those cryptocurrencies: blockchain technology. The use cases of blockchain are increasing globally and are expected to increase furthermore in the near future.
For those who do not know what blockchain is, it is a public electronic ledger similar to a relational database. It can be openly shared among disparate users and that creates an unchangeable record of their transactions, each one time-stamped and linked to the previous one.
Blockchain investment is becoming a mainstream thing for many investors. This is because of the infinite features and benefits that blockchain provides over similar traditional technologies. Thus, investors see the future scope and profits in cryptocurrencies, startups, and even big companies that use blockchain as a technology.
Companies like Walmart are testing blockchain technology to track the distribution of food from suppliers. This helps in isolating any outbreaks of foodborne illness. Even Starbucks has initiated a project which involves the use of blockchain technology. This project aims at improving the transparency of prices for its coffee growers in Costa Rica, Columbia, and Rwanda.
WHAT IS BLOCKCHAIN INVESTMENT?
To explain in simple terms, blockchain investment means investing your money in blockchain technology or its applications, including cryptocurrencies like Bitcoin, Ethereum, Ripple, etc. As we can see, the prices of cryptocurrencies like Bitcoin are skyrocketing. Without a doubt, we can say that they are a great investment.
WHY INVEST IN BLOCKCHAIN?
Being a new technology, investors are already impressed with its abilities and are interested in exploring and expanding this technology even more. The following are some factors that make blockchain attractive and beneficial for investments:
- It can help a company or an organization achieve its maximum efficiency, thus, increasing its profits by huge numbers.
- As mentioned before, some big companies with a lot of experience in technology and the commerce sector are keen to invest and use blockchain to power their applications. Some of these companies include Amazon, Salesforce, etc.
- Due to the Covid pandemic, everything from education to shopping was digitized. Now people are comfortable with the digital world and can relate to new technologies like blockchain a little more.
- An unbelievable increase in the value of cryptocurrencies is also a factor to consider.
- Blockchain is a very flexible technology that can be integrated and used alongside other technologies like cloud computing, e-commerce, and Artificial Intelligence.
HOW TO INVEST IN BLOCKCHAIN?
It is not necessary to invest directly in stocks of the companies that use blockchain. You can follow the following ways as well:
- Directly invest in cryptocurrencies like Bitcoin, Ethereum, Litecoin, etc., or you can also buy shares of cryptocurrency trusts like Grayscale Bitcoin Trust.
- You can buy an Exchange-Traded Fund (ETF). It particularly invests in shares of companies that use blockchain in some or another way.
- If a developer issues a new cryptocurrency that he or she had been working on, you can purchase that too. Basically, you can participate in crowdfunding a new cryptocurrency through an Initial Coin Offering (ICO).
BLOCKCHAIN RATING SYSTEM
Cryptocurrencies are currently experiencing tremendous growth in terms of their value. One thing we should always keep in mind is that this value of cryptocurrencies is extremely volatile. What that means is that it is not easy to predict their value and that this value can rise and fall at any time.
For this reason, it is recommended to use some platforms and services available that can help predict the prices as much accurately as possible. This can help investors in investing in cryptocurrency and minimizing the risks, and maximizing profits.
These blockchain rating systems are built using certain complex Artificial Intelligence and Machine Learning algorithms to give specific ratings to the digital assets that use blockchain technology, like cryptocurrencies. These ratings can then be used by investors to decide which digital assets to invest in.
It is highly encouraged to invest in such blockchain rating systems for ease of investment. Let us discuss one such reliable blockchain system.
This new platform is an unbiased blockchain rating system that uses complex Artificial Intelligence and Machine Learning algorithms to manage ratings of digital assets like cryptocurrencies. These ratings are constantly learning, maintaining, and decentralizing ratings to provide unbiased recommendations for investments on the market.
EVAI.io is an open-source platform for evaluating and comparing machine learning (ML) and artificial intelligence (AI) algorithms. The team of EVAI has a good amount of experience in traditional financial services.
The founders have created and managed successful algorithmically traded funds overseen by the UK regulatory authority, which generated twenty-seven percent net profit.
The ultimate objective of the business is to deliver an unbiased rating system that is fit for an environment of rapidly advancing technology. It was conceived in response to the failure of financial ratings in the run-up to and following the 2008 financial crisis.
HOW ARE UNBIASED BLOCKCHAIN RATINGS GENERATED?
Six factors are used by Eva to generate ratings for blockchains. These factors are as follows:
- Liquidity: This factor is used to measure the fungibility of any digital asset. For those unfamiliar with the term ‘fungibility,’ it is the ability of a good or asset to be interchanged with other individual goods or assets of the same type. Fungible assets simplify the exchange and trade processes, as fungibility implies equal value between the assets.
- Systematic risks: These are the risks that can result due to the collapse of an entire market. Estimating the risks involved is very important as high risks can sometimes prove very disastrous for the investor.
- Profitability: It is one of the most important factors from an investor’s point of view, as, for most investors, the whole purpose of investing is to make huge profits and get good returns on investment.
- Momentum: Here, ‘momentum’ can be defined as the rate of change of the price of a digital asset. If the momentum is high, it means that the asset is highly volatile. Thus the risks are higher than the other available assets. Thus, a cryptocurrency with moderate momentum should be preferred as it should not be completely volatile or wholly fixed in terms of its value.
- Peak to end value demand: It shows the last value and the peak price achieved by a certain digital asset over a specified time period.
- Investment: The final factor is the investment. It is based a lot on the previously mentioned factors to determine whether to invest in a digital asset or not. Even if it is recommended to invest, what should be the correct amount to invest to maximize profits.
WHY PREFER THIS PLATFORM OVER OTHER RATING METHODS?
Being backed up by an experienced team, a lot of research work and investments were put into creating extraordinary model. This model has been tried and tested in the real investment world and turned out to be pretty successful for investors.
As mentioned before, EVAI’s model is based on AI and ML. Thus, it continuously evolves and learns itself from the investments and trades done globally.
AI Description: Artificial Intelligence is used to determine the accuracy of each risk factor. This is done by selecting indicators with the most optimal weights.
ML Description: Machine learning techniques are implemented to assess the daily test results and modify the parameters of the AI software. The tweaking of the multi-factor model’s selection criteria continuously improves the overall accuracy over time.
Blockchain technology and cryptocurrency are two giants that can change the way investments are made forever. They bring a new way of investing, which is the digital method. Blockchain is used in other sectors as well, like managing data in hospitals, government offices, e-commerce websites, etc.
With the increasing number of blockchain applications and the number of cryptocurrencies, it is becoming challenging for investors to decide which cryptocurrency to invest in to minimize risks and maximize profits. For this reason, the use of blockchain rating systems is recommended.
These rating systems are designed to use the advantages of Artificial Intelligence and Machine Learning, that they overcome the challenges faced by human beings to decide which cryptocurrency to invest in.
One such rating system is EVAI due to it being an unbiased and decentralized rating system that uses complex algorithms and artificial intelligence to run the multi-factor model in an open-source autonomous manner, and that too without any human intervention.
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