MaidSafe Price Analysis: Can an old dog learn new tricks?

MaidSafeCoin (MAID), the native token of the SAFE network, is currently listed as the 59th largest digital asset in the world by market capitalization. It currently trades at $0.247 and the network is worth over 450 million USD.

It has shown moderately strong short term performance having risen approximately 16% since the 14th of August. It has been buoyed by strong external conditions which have propped up the wider altcoin market, and internal developments, such as the release of a new consensus algorithm white paper.

The paper elaborated on PARSEC, MAIDSAFE’s new consensus model. The solution proposes that it will allow the network to deliver the highest levels of Byzantine fault tolerance, above solutions delivered by comparable DLT models such as Hashgraph and XRP/Ripple.

Whether this short term momentum will help to overcome MaidSafe’s longer term bear trend remains to be seen. The token is currently down ~74% from its all-time price high, while daily trading volumes are down ~89% from all-time highs.

This indicates a disinterested marketplace that may not be able to support a longer price run, however, optimists will hope that the asset’s current price strides indicate the re-emergence of MaidSafe as a longer term investment option.

Trading pairs and exchanges

Despite MaidSafe having been available for trading on external platforms since 2014, there are currently only six active markets for the token, and they are all crypto-to-crypto. The BTC/MAID and ETH/MAID pairs make up over 85% of daily trading volume, close to 5 million MAID tokens, worth over USD 1 million. The next most popular pairs are US dollar Tether/MAID and Monero/MAID.

The most popular exchange for trading BTC/Maidsafe is HitBTC, which handles over 85% of trading volume between the pair, worth over USD 810,000. HitBTC was launched in 2013 by Estonian and Israeli backers and offers English and Chinese interface languages. The next most popular exchange for the pair is Poloniex.

The token and the SAFE network

MaidSafeCoin serves as the externally accessible native token for the SAFE network. The SAFE network aims to be a sharing economy for digital resources in a similar vein to the torrent network and Napster.

Decentralized data networks have gained popularity as secure alternatives to Yahoo or Facebook, which can be prone to being hacked or sell user data without clearly informing their communities.

Within the SAFE network there are two main participants; Clients, who access features of SAFE such as data browsing, data storage, & money transfer; and Farmers who look after client data until it is requested, and then disseminate it when required for a MAID reward.

The basic mechanism of the MaidSafe distributed data storage solutions is simply: users upload a file such a piece of music or a photo and then it is then broken up into interconnected chunks before being hash encrypted and distributed across the network. Redundant copies of the data are also created so that clients can still access the data when farmers are offline.

The SAFE dashboard

Data on the SAFE network is stored on vaults, managed by the Farmers. This requires bandwidth and CPU power, and because of this, MaidSafe farmers go through a Proof-of-resource process to determine their capability to provide for the network.

MaidSafe’s decentralized data model offers a number of solutions over traditional data storage solutions. Data is fully encrypted and stored across multiple servers adding security; users have an added level of anonymity enabled by the encrypted outputs; communication is censorship resistant in theory, and a native currency allows for a straightforward method to funnel data handler rewards, circumventing external factors like permissioned banking systems.

However, solutions like the SAFE network are complicated and difficult to deliver. The MaidSafe company announced skeleton visions of a ‘distributed internet data storage’ solution since as early 2006, leaving a few in the media to dub it ‘the world’s oldest startup’.

Additionally, a number of other digital asset-backed solutions to the distributed data storage challenge have emerged in recent years, such as TRON, Golem, and Filecoin, meaning MaidSafeCoin has lost some of its unique appeal and value proposition.

MaidSafe, however, has shown that a new dog can learn new tricks, conceptualizing a new form of distributed consensus, PARSEC, based on the idea of asynchronous Byzantine fault tolerance.

The recently-released whitepaper has gained some traction among the crypto dev community, but some remain unconvinced that it is the game-changing solution it describes itself to be.

https://twitter.com/VladZamfir/status/1001600061107777536
Vlad Zamfir is one of Ethereum’s most recognized and respected developers

PARSEC: Innovation or industry afterthought?

The concept for the Protocol for Asynchronous, Reliable, Secure and Efficient Consensus (PARSEC) was released by the MaidSafe team in Q2 2018. Similar to consensus models in networks like Ripple and Hashgraph, PARSEC challenges the Byzantine failure present in traditional PoW networks such as Bitcoin, where there is always a temptation for miners to accumulate enough processing power to attack the networks they operate within, for personal profits, and to the detriment of every other operator in the ecosystem.

The core of the PARSEC model is the use of a ‘gossip’ based mechanism. Nodes gossip/share detailed information about the transaction, and gossip about the gossip, creating a detailed web of historical information regarding transactions running through the network.

The nodes then vote to achieve consensus based on the web of gossip. Gossip-based systems have an advantage in that they minimize interaction between nodes, because it is primarily historical, static data (‘a reputation score’) that is used for the consensus decision.

PARSEC adds elements on top of existing gossip-based fault-tolerant models such as the closed network used by Hashgraph. Mechanisms such as synchronization between an information receiving node, and some other random node in the network, provides an extra security blanket to protect the network against bad actor nodes.

This style of consensus, while providing extra safety to protect from bad actors, has a number of limitations. It is required to use ‘Well-reputed nodes’, that have been verified in order to operate on the network. Meaning to a certain extent, censorship resistance and decentralization is already lost within SAFE.

Additionally, consensus only needs to be achieved within smaller Quorum slices, contained subgroups of the entire distributed ledger network. This design choice is in place to retain efficiency, scalability and to prevent network bottlenecks, but again leads to ideological challenges because of the inherent centralization this style of consensus creates.

However, PARSEC also appears to operate without a ‘leader’ based system as used by algorithms for networks like Ripple and ICON, meaning power is distributed equally between nodes.

PARSEC currently exists purely as a concept, it remains to be seen the extent to which the consensus model will allow the SAFE network to address challenges like throughput, stable governance and scaling.

Technical analysis

Exponential Moving Averages (EMA) with Long Term Trends

On the 1D chart, the death cross, using the 50 and 200-day EMAs, remains intact despite MAID’s relative price resilience since early April. Additionally, the 50-day EMA is currently acting as resistance near the $0.30 level (black arrow).

Since April, price has been contained within a sideways trading range between $0.23 and $0.50. At time of writing, price is experiencing a bounce off $0.23 and climbing towards the resistance level of $0.30. However, the volume flow indicator (VFI) has remained above 0 since early-July (black arrow), which may demonstrate consistent or growing demand for MAID. The VFI interpretation is a value above 0 is bullish and below 0 is bearish, with divergences between price and oscillator being high probability signals.

Ichimoku Clouds with Slow Wave Trend Oscillator (SWTO)

The Ichimoku Cloud uses four metrics to determine if a trend exists; the current price in relation to the Cloud, the color of the Cloud (red for bearish, green for bullish), the Tenkan (T) and Kijun (K) cross, Lagging Span (Chikou), and Senkou Span (A & B).

The status of the current Cloud metrics on the 1D frame with singled settings (10/30/60/30) for quicker signals is bearish; price is below the Cloud, Cloud is bearish, the TK cross is bearish, and the Lagging Span is below the Cloud and price.

A traditional long entry would occur with a price break above the Cloud, known as a Kumo breakout, with price holding above the Cloud. From there, the trader would use either the Tenkan, Kijun, or Senkou A as their trailing stop.

MAID is currently sitting at ~$0.28 after bouncing off its consistent price support of $0.23. Since, then price has hit medium-term resistance at the $0.30 level (previous failed resistance and 50-day EMA). Additionally, the SWTO is still trending upwards and has more room to run until overbought territory, which may suggest that price will have enough momentum to reach the Kumo breakout level of ~$0.35, but not enough momentum to hold it. For either scenario, the support level is $0.23 (dashed line) which has held as strong support since April. If that support fails, $0.20 and $0.15 support levels will likely be tested. In the unlikely event of a Kumo breakout, price targets are $0.40 and $0.47.

The status of the current Cloud metrics on the daily time frame with doubled settings (20/60/120/30) for more accurate signals is bearish; price is below the Cloud, Cloud is bearish, the TK cross is bearish, and the Lagging Span is below the Cloud and price.

Price is pushing towards a Kumo breakout attempt, where price would need to break above the flat Senkou B level of $0.36. However, the SWTO and resistance levels along the way make its success unlikely. However, if this low probability event occurs, price targets are $0.40 and $0.48.

However, short-term, momentum traders, may look favorably at the 4H chart (even with the current drop) where price is currently experiencing a Kumo breakout using (20/60/120/30) settings. Furthermore, traders entering a long position between $0.26 to $0.28 (price at time of writing) should look at 1D Cloud breakout levels of $0.35 (10/30/60/30) and $0.36 (20/60/120/30) as likely take profit levels; if the trade proves successful.

Conclusion

The MAID token is attached to one of the distributed ledger spaces oldest and most recognizable projects. Having at one point been a top 10 asset, it has lost some of its luster in recent times, as competitors have entered the space, making the SAFE network’s solutions seem far less unique than they once were.

MaidSafe historical popularity

Based on recent price movements, however, the token’s prospects may seem brighter, even if the new consensus algorithm only provides a minor upgrade to the network.

The technicals for MAID are bearish despite price resilience since April and its current upward price bounce. Traders eager to participate in the short-term price momentum will look at the 4H chart to execute a potentially lucrative short-term trade. Both the prudent short term trader (10/30/60/30) and longer term trader (20/60/120/30), on the 1D chart, will await a positive TK cross and Kumo breakout above $0.35 and $0.36, respectively, before entering a long position. The key support level for price is $0.23 (critical to hold). Successful, 1D chart, Kumo breakout price targets are $0.40 and $0.47.

Disclaimer: This analysis has been designed for informational and educational purposes only. Readers are advised to conduct their own independent research into individual assets before making a purchase decision.

About the authors

Christopher Brookins
Christopher Brookins is the founder and CEO of Pugilist Ventures, a quantitative investment firm focused on digital assets and blockchain technology. Chris has a deep knowledge and unique perspective on digital assets formed by his polymath experience in equity trading, credit investing, and business development at two West Coast startups (one acquired). He has been involved in the blockchain community since 2014. Follow @chris__brookins

Aditya Das Aditya Das is Brave New Coin’s in-house market analyst. Raised in Dubai, UAE, he holds a post-graduate honors degree in Economics from the University of Auckland and a BA in Economics from the University of Sussex. Prior to joining BNC his most recent roles were as a researcher and Economics tutor at the University of Auckland. Follow @Quartlifecrypto