Market Outlook - 14/04/2021

 Introduction 

This article is going to focus on a few coins and run a basic analysis for opening trades. Below I am listing some interesting coins that look promising for short term trading.

Bitcoin

Below we can see the 4hr Tradingview chart:

Note:  BTC seems is going to consolidate the next couple of weeks.

Below we can see the day Tradingview chart:

Note: We can see that BTC volume drops, MACD and RSI show a minor trend cool down. My speculation is that BTC will go side ways for the next couple of weeks, unless something big happens.

Below we can see the Glassnode BTC Exchange 2 week NETflow:

Note: The inflow seem to to increase, which conform a BTC consolidation. 

Below we can see the Glassnode BTC Exchange 2 week reserve:

Note: It looks like the downtrend will continue, which is good as a macroscopic indecator.

Zilliqua (ZIL)

Below we can see the 4hr Tradingview chart:

Note: Volume reduced , RSI and MACD shows a reversal.

Below we can see the day Tradingview chart:

Note: Volume reduced , RSI and MACD shows a reversal. Strong support at 0.14677 dollars.

Uniswap (UNI)

Below we can see the 4hr Tradingview chart:

Note: It looks like Uniswap is preparing to make a significant move in the next days. Uniswap is forming a pennant! and volume pattern supports that.

Below we can see clearly the pattern:

Note:   In technical analysis, a pennant is a type of continuation pattern formed when there is a large movement in a token, known as the flagpole, followed by a consolidation period with converging trend lines—the pennant—followed by a breakout movement in the same direction as the initial large movement, which represents the second half of the flagpole.

Below we can see the day Tradingview chart:

Note: This chart confirms the imminent upwards move. This is a even now a good entry point. 

Below we can see the Glassnode Uniswap Exchange 2 week NETflow:

Note: It seems that Uniswap exchanges outflow are about to increase.

Below we can see the Glassnode Uniswap Exchange 2 week reserve:

Note: It seems that Uniswap exchanges balance is dropping  and this info combined with the Unipig (Uniswap v3 upgrade) update is going to give a boost to the coin. This chart confirms the upwards move for UNI too!!

Binance Coin (BNB)

Below we can see the day Tradingview chart:

Note: This chart demonstrates that BNB is now in a price discovery move after hitting ATH. Just bare in mind that BNB has a 90% plus correlation with BTC, even though it is a utility coin and a fork of ETH  Binance proved that can and will deliver (compared to ETH). Also this combined with the staking options provided and the burning features makes is a good candidate for hitting 1000 dollars by end of year if not more!!! Bare in mind that BNB Market Cap hit $88,350,515,767 and 100b is a psychological level..... 

Below we can see the Glassnode BNB Exchange 2 week NETflow:

Note: The exchange netflow shows that it might be an inflow on the immediate future , if this continues will affect negatively the price. 

Below we can see the Glassnode BNB Exchange 1 month reserve:

Note: This chart shows that the BNB reserves for the last month increased and this might actually have an negative impact on the price, that might cause BNB to consolidate.

LoopringCoin (LRC)

Below we can see the day Tradingview chart:

Note: LRC looks good baby. LRC is using zkRollup and is an Exchange and Payment Protocol. Loopring protocol can settle up to 2,025 trades per second while guaranteeing the same level of security as the underlying Ethereum blockchain. This is made possible by using a construction called zkRollup, which aggregates and executes transactions off-chain, in a provably correct manner. This is also a layer 2 solution that competes with ETH FYI. The longer the ETH waits for the upgrades, the longer LRC is going to boost. Both oscillators show an uptrend. 

Below we can see the Glassnode Loopring Exchange 2w Netflow:

Note: Whales seem to withdraw from Loopring and this is good for the price.

Below we can see the Glassnode Loopring Exchange 1 month reserve:

Note: Reserve goes up and might not be good.

Matic Network or Polygon (MATIC)

Below we can see the day Tradingview chart:

Note: Matic, another layer 2 solution solving the congestion problem with ETH seems to do good, although my view point is that it is going to consolidate for while , untill see some big move.

Below we can see the Glassnode Loopring Exchange 1m Netflow:

Note: This chart shows as the MATIC is either going to wither consolidate for while or even drop its price. 

Below we can see the Glassnode MATIC Exchange 1 month reserve:

Note: The monthly MATIC reserve drops and this is good as a microeconomics indicator.  Although in the short term I would not wait for a significant move. It seems that MATIC is in an accumulation phase right now.

Below we can see the Glassnode MATIC staking 1 month chart:

Note: Microscopically speaking the chart above shows that whales and retail are moving their MATIC out of staking and into the exchanges, which designates some serious price action move. Meaning that people either move to other altcoins or actively trade MATIC. This smells accumulation!!!

 

Data-Driven Approach To Cryptocurrency Speculation The Ultimate Methodology

Introduction 

A Data-Driven Approach To Cryptocurrency Speculation is the only way to success.

How do Bitcoin markets behave? What are the causes of the sudden spikes and dips in cryptocurrency values?  Are the markets for different Altcoins, such as Litecoin and Ripple, inseparably linked or largely independent?  How can we predict what will happen next?

Articles on cryptocurrencies, such as Bitcoin and Ethereum, are rife with speculation these days, with hundreds of self-proclaimed experts advocating for the trends that they expect to emerge.  What is lacking from many of these analyses is a strong data analysis foundation to backup the claims. Also fundamental analysis plays a crucial role for long term HODLERS. 

Fundamental Analysis

Before investing on a coin you have to do your research first, you have to know what are you investing on. This translates to analyzing the following elements:

• The team reputation (e.g. team average age group)
• The team skill set composition (e.g. skill set balance, in marketing and engineering)
• The team skill set ratio (e.g. 70% engineers and 20% social community creation)
• The product white paper (e.g. well written whitepaper, reviewed by lawyer)
• HQ Location (e.g. London or Netherlands with stable legal framework etc.)
• Company partnerships (e.g. associates with other companies in the field )
• Social community  size (e.g. 30.000 users in telegram channel)
• Technology Use Case:
• Payment
• Insurance
• Oracle
• Clean Energy
• Shopping
• Tokenomics (e.g. inflation, coin max supply, market-cap etc.)
• Code audit from the product:
• Security code audit from an independent 3rd Party (e.g. Review for security bugs etc.)
• Manual Audit (e.g. Review for code quality etc.)
• Github Repo code review (e.g. update frequency etc.)

Note: A sample analysis can be seen in this link Matic .

Tools For Fundamental Analysis

For fundamental analysis,we can you the following websites to get all the required information:

• Coingecko - From this tool we can get information
• Lunarcrush - From this tool we can get information about the coin and social sentiment 
• OpenZeppelin - From this tool we can get information about the security audits

On top of the mentioned tools you can use also other tools. The mentioned tools cover 90% of my research.

Building Portfolio & Understanding Movement  

Usually by correlating different assets you can conclude how movement evolves and make the right bets. Below I have my latest correlation analysis, with pair from Poloniex public API. The test collects data from 2019-01-01 until today (2021-07-02), enjoy the Kendall correlation:

  This is for the same period the Spearman correlation:

 

  This is for the same period the Pearson correlation:

Note: For more information on correlations and how to use them please see my previous posts here and here.

From here we can see the following interesting correlations:

• ETH has 0.74 to 0.96 correlation with BTC, which this translates to BTC is leading the way and ETH is following.
• LINK has 0.74 to 0.9 correlation with ETH, which this translates to ETH leading the way and LINK following.
• UNI has 0.76 to 0.88 correlation with COMP, which this translates to COMP is leading the way and UNI is following.
• SNX has 0.66 to 0.9 correlation with BTC, which this translates to BTC is leading the way and SNX is following.

On Chain Data And Technical Analysis 

On chain data analysis is always mandatory and these are the metrics I am using to assess my short and long term movements:

• Exchange Inflows/Outflows for swing trading from CryptoQuant and GlassNode
• Coin reserves on BTC and ETH for long term investment and swing trades from CryptoQuant and GlassNode
• NUPL indicator from GlassNode
• Stable coin reserves on all main exchanges from CryptoQuant and GlassNode
• Coin charts from Tradingview (for short term) and the following indicators:
• RSI with fibonacci values
• MACD with fibonacci values
• Moving Average, Weighted Moving Average for 21,34 and 13 days
• Buy and Sell walls from Tradinglight for short term movements

Bull and Bear Cycle Periods 

As we can understand in all assets there is a Bull cycle that alternates with a Bear cycle. Now between the Bear and Bull cycle there are mini Bear cycles were BTC consolidates (aka. Moves sideways) or retests the resistance lines. That time period is usually the best to switch your cash to the Altcoin market, and the market movement can be recorded. 

The diagram below shows which market (BTC or Alts) dominates based on market cap: 

 

When the graph hist 70% towards the BTC market, we switch to BTC, when it goes below 65% we switch to Alts and so on. 

Technical Analysis 

Technical Analysis works because the markets are largely based on human psychology. Swings follow numbers, but the behaviors are predictable to a certain extent. That certain extent has to do with the fact that human psychology is a natural factor, and most natural factors seem to mysteriously follow the golden rule, or Fibonacci numbers and proportions. The theory goes that if you tell a bunch of people that bad news is coming, a certain portion of them will act early or prepare in one way, a certain portion of them will wait and see, a certain portion of them will sit tight and power through [1].

Below we can see the most common patterns for TA, in order to identify future price movement:

Social Media Sentiment

Lunar crush is a very good site to get the overall social sentiment on most of the cryptos:

Summary/Last Words

A summary the blog post about the methodology:

• Step1: Fundamental analysis for long term is mandatory
• Step2: Crypto coin correlation can give us a good understanding about price movement
• Step3: On Chain data analysis is a must to get valuable insights  
• Step4: Technical Analysis is a complementary tool
• Step5: Social sentiment can help you predict movement and new coins

Stay safe do not drive fast......

References:

• reddit [1]

 

ETH Price Evolution

 Introduction 

This blog post is going to make an assessment on the Ethereum  price and attempt to predict how the ETH is going to perform the next three months, and when to exit. Since mid October 2020 there has been an insane accumulation of Bitcoin from Whales and since ETH has a 93% correlation with BTC, we can safely assume that ETH is going to go to the moon too. It does worth mentioning also that ETH the last year has outperformed BTC and it seems to have a certain type of "price decoupling".  Which translates to an ETH movement that is going to ignore the indecisiveness of BTC and move to an ATH. 

This is the BTC/ETH ratio daily chart created using Tradingview [7]:

Ethereum's out-performance looks set to endure also in the near term, as the BTC/ETH ratio breaks to its lowest levels since August of 2018. That being said, both cryptocurrencies seem poised to move higher in the coming weeks, as bullish technical setups take shape on multiple time-frames. 

Article key points:

• ETH EIP-1559 burning mechanism
• ETH as a DeFi reserve
• ETH trend
• ETH price suppression

ETH Reserve 

Based on coin-telegraph [1], analysts predict ETH may soon hit a new all-time high after ETH reserves on centralized exchanges fell by 27% in two days. The acceleration of ETH being taken off exchanges was highlighted by Nuggets News [2] Alex Saunders, who noted a 10% drop in Ether reserves on centralized platforms on Jan.14 — from 11 million to 10 million over 24 hours. “Exchanges will run out of ETH in 10 days at current rate,” he predicted.

This can also been seen on the Cryptoquant charts [3]:

In the chart above we see a rapid drop on Jan 23 and the then slower movements to further down. This is a strong indicator of a Storage of Value (SoV) asset. Long term HODLERs are going to benefit from just holding ETH.

ETH The Reserve Of DeFi

As far as blockchain is concerned, investors believe that ETH has a value storage function [4]. Below we can see the total ETH 2.0 value staked so far.

This can also been seen on the Cryptoquant charts [3]:

ETH is the mother of DeFi and the equivalent of derivatives in the traditional market. Simplistically speaking without ETH there is no DeFi. If we compare DeFi with the current traditional derivatives market, we can see the future of ETH price.

But what is a derivative?

A derivative is a financial security with a value that is reliant upon or derived from, an underlying asset or group of assets—a benchmark. The derivative itself is a contract between two or more parties, and the derivative derives its price from fluctuations in the underlying asset. [8]

Why ETH is a derivative?

ETH allows the cooperation of multiple different contracts (e.g. through smart contract interfacing). By assuming that a smart contract emulates the behavior of a single asset e.g., gold or silver etc. We can safely deduce that on ETH we can build/emulate derivatives, simply by combining smart contracts e.g. two smart contracts that emulate gold and silver etc. 

This is particularly easy with the following three properties:

• Chain interoperability e.g. cross chain data exchanges
• Chain oracles e.g. see Chain-link technology 
• Web 2.0 connectivity e.g., see API3 technology

The current derivative market is, in a word, gigantic—often estimated at over $1 quadrillion on the high end. Largely because there are numerous derivatives in existence, available on virtually every possible type of investment asset, including equities, commodities, bonds, and currency. Some market analysts even place the size of the market at more than 10 times that of the total world gross domestic product (GDP). However, other researchers challenge these estimates, arguing the size of the derivatives market is vastly overstated [9]. For a visualization of the market caps in different assets see [6].

Is there any downside in derivatives?

In the traditional market, derivatives are difficult to value because they are based on the price of another asset. The risks for OTC derivatives include counter-party risks that are difficult to predict or value as well. Most derivatives are also sensitive to changes in the amount of time to expiration, the cost of holding the underlying asset, and interest rates. These variables make it difficult to perfectly match the value of a derivative with the underlying asset [8].

Why are we concerned about the derivatives behavior in traditional markets?

Because with derivatives someone can create financial bubbles. The real cause of the 2008 financial crisis was the proliferation of unregulated derivatives during that time. A good example of a derivative that caused the financial crisis is a mortgage-backed security [10]. ETH derivatives, depending the regulatory framework that is going to be created (it is assumed that the regulatory framework is going to be created in the near future) might become dangerous on the distant future.  

Is this something I should be concerned?

No, 1st it is too early and 2nd this is related mostly to layer 2 technologies, that seat on top of ETH e.g. Matic Network. 

ETH Is Burning

The EIP-1559 standard aims to reduce gas costs on the Ethereum network, and is expected to be released in the summer of 2021 [11]. EIP-1559 is a transaction pricing mechanism that includes fixed-per-block network fee that is burned and dynamically expands/contracts block sizes to deal with transient congestion [12]. ETH1.0 historically priced transaction fees using a simple auction mechanism, where users send transactions with bids ("gasprices") and miners choose transactions with the highest bids, and transactions that get included pay the bid that they specify. A mechanism similar to the one BTC is using. Simplistically speaking ETH is becoming deflationary..............

The transition to Ethereum 2.0’s staking mechanism is set to reduce the inflation rate of ETH to 0.5%-2.0%, putting it in the same company as BTC and gold in terms of supply inflation. 

ETH Is On An Uptrend

Trend is your friend, follow the trend and enjoy the ride. ETH hit ATH today (03/02/2021) and the shapes created by the price chart show that the same trend is going to continue.

This can also been seen on the Tradingview charts (daily chart):

ETH Is Suppressed By Whales

For visualizing the buy and sell walls from the Whales, we are going to use Tradinglight. Tradinglight is a heat-map visualization tool, that loads Tradingview, using live data, indicator scripting, support for all major crypto exchanges. When using TradingLite heat-map, we can quickly grasp which price levels are trusted by the market.

Tradinglight charts (6hrs chart in Bitfinix):

From the diagram above we can see from the Bifinix order book that, there are multiple sell walls on 800 to 1200 dollars. Which means that there is a strong desire to suppress the ETH price and buy the deeps. On the top there is a sell wall on 1500 dollars.

Below we can see from cryptometer that ETH is heavily suppressed by the big bad Whales:

 Note: The amount used to suppress ETH since Dec 2020 increased by 70%.  

Conclusion 

ETH is going to outperform BTC and hit at least 2000 dollars the next 2 weeks to 4 weeks. After ATH is achieved I am expecting a parabolic move similar to the one BTC went through. I would not be surprised if we could see a 5000 dollar price in 3 months from now.  

References 

• cointelegraph [1]
• NuggetsNews/videos [2]
• Cryptoquant [3]
• tokeninsight.medium.com [4]
• decrypt.co [5]
• visualcapitalist [6]
• dailyfx [7]
• investopedia [8]
• investopedia [9]
• thebalance [10]
• hebergementwebs [11]
• github [12]

Matic Netowk (MATIC) Analysis

Introduction

Matic Network has been a project on my radar for quite some time now, but one that I have never had the opportunity to spend any time properly researching. The article audience is intended to be technically savvy investors e.g. developers and Information Technology people.

For those who’d like to learn a little more about Matic Network prior to reading this report, here are some primary links:

• MATIC
• MATIC Twitter
• Medium
• MATIC Telegram
• MATIC Linkedin

This article might get updated, so stay tuned, and is meant to provide a holistic overview of Matic Network for readers, both old and new to Matic Network.

Fundamental Analysis/ Metrics

Name: Matic Network 

Ticker: MATIC

Token Type: ERC-20

Validator Method: PoS

Platform: Ethereum blockchain only (currently)

Category: Mid cap

Transactions Per Second: up to 10,000 (internal test-net)

Note: As of 30/11/2020 Ethereum can only process on average about 14 transactions

Consensus Mechanism: Plasma + Proof of Stake (implemented in Bor component)

Sector (Use cases): Payments, Decentralized Exchanges, Gaming Networks

Exchanges: Link

Head Quarters (HQ): Bengaluru, Karnataka (India)

Number of employees: 61 employees (Linkedin - 28/Nov/2020)

Two year growth: 281%  (Linkedin - 28/Nov/2020)

Company year founded: 2017

The company HQ is in India (not a big fun of India as a tech startup place). The most impressive part is that Matic Network has a growth, based on the Linkedin Insights Premium service, of 281%. The after mentioned percentage refers to the employee growth. The company started with 16 employees on Nov 2018 and reached 61 employees on Nov 2020. 

The company employee ratio, based on specialty seems to be well balanced, see below:

We can see from above that the company takes Marketing (17% of total employees) and Social Media presence (15% of total employees)  seriously. The LinkedIn profile is populated with frequent posts adding a professional look to the company, most recent post was 4 days ago. The company official blog also looks to be updated frequently. Another interesting fact about the company is that 7% of the employees is dedicated to education (e.g. by producing high quality educational content). From the above we can conclude that Matic Network is moving to the right direction, by pursuing fast market adaptation, through marketing, social communities and education. The Matic Network has a very well designed web site and a lot of material on their products. The only negative aspect is that, Matic Network is entering multiple highly competitive markets such as payments and gaming, limiting their chance to succeed.      

Launch Overview

Matic Network was conceptualized on 2017 by Jaynti Kanani and Sandeep Nailwal. Matic Network launched a private/pre-sale on  1/Jan/2018 that ended on 31/Dec/2018. They also launched their IEO on 24/Apr/2019 and ended on 26/Apr/2019. 

What is the Matic Network[1]:

"Matic Network provides scalable, secure and instant Ethereum transactions using Plasma side chains and a Proof-of-Stake network." [1]

Matic Network MATIC IEO Review [4]:

IEO price: $ 0.00263

ROI since IEO: USD: 6.98x  (+598.4%)

ATH ROI since IEO: USD: 17.19x  (1618.9%)

Tokens For Sale: 1,900,000,000

Hard Cap: $ 5,000,000

Matic Network MATIC ICO (Private-Sale/Presale) Review [4]:

Private/Pre-sale price: $ 0.00263

ATH ROI since Private/Pre-sale: USD: 17.19x  (1618.9%)

Lock-up: 50% unlocked in the first month of Private-Sale/Presale, remaining 50% unlocked in the seventh month

Note: The top 100 holders collectively own 97.44% tokens of Matic Network

Address token allocation:

Token Economics

Circulating supply (market cap): $86,879,574.00

Total Supply: 10,000,000,000 MATIC

Holders: 19,960 addresses

Total Hard Cap: $5,600,000

For sale: 3,230,000,000 (32.30%)

Public sale: 1,900,000,000 (19.00%)

24-hour trading volume: $11,186,210 (source coingecko)

Most active market: Binance

Note: Hard cap is defined as the maximum amount of money a cryptocurrency can receive from investors in its Initial Coin Offering (ICO) [5].

Token Staking

MATIC Token Investors can leverage their crypto via staking. Currently there are 3 options to earn passive income and staking rewards with your Matic Network. This can be done through:

1. Delegate Matic
2. Run validator
3. Lend Matic Network

Run validator

At this point is important to clarify that validators stake their Matic tokens as collateral to work for the security of the network and in exchange for their service, earn rewards [1].

Matic will be allocating 12% of its total supply of 10 billion tokens to fund the staking rewards. This is to ensure that the network is seeded well enough until transaction fees gain traction. These rewards are primarily meant to jump-start the network. While the protocol in the long run is intended to sustain itself on the basis of transaction fees [1]. Below you can see the reward formula:

Validator Rewards = Staking Rewards + Transaction Fees

This is allocated in a way to ensure gradual decoupling of staking rewards from being the dominant component of the validator rewards [1]. Rewards are distributed to all stakers proportional to their stake at every checkpoint with an exception being the proposer getting an additional bonus. User reward balance gets updated in the contract which is referred to while claiming rewards [1].

Delegate Matic

Delegators are token holders who cannot, or do not want to, run a validator node themselves. They can delegate staking tokens to a validator and obtain a part of their revenue in exchange. Because they share revenue with their validators, delegators also share risks. Should a validator misbehave, each of their delegators will be partially slashed in proportion to their delegated stake [19]. 

Lend Matic Network

You simple give resources to MATIC network by installing related software.

stakingrewards.com did us a favor and added MATIC staking calculations:

Matic Partnerships

Matic Network first partnered with Blockchain Foundry [9], in order to increase their know how. Moving forward they partnered with Ankr Network [10] to help them set up a staking network. This shows strong appetite for fast adaptation again. Also most partnerships took place on 2020. 

Below you can see most of the partnerships that took place in 2020:  

    

Social Media Presence 

Twitter followers: 58.4K Followers

Telegram: 29912 total members

Telegram: 1245 online

The Telegram community is active and healthy (e.g. members do not exchange cooking recipes etc.). Matic Network has multiple Telegram channel (their main channel has 29912 members). Same applies for Twitter. 

Technical Analysis

All time high (ATH): $0.023778

All time low (ATL): $0.015362

Major resistance line: $0.022350

Major support line: $0.00995

Tradingview set to 45 min with indicators RSI Candle and 9 day WMA:

From the diagram above, we can see that when Matic Network token was released, went from the initial coin release hype to a new higher high, this shows the potential for great growth. As already reported the company does have good token economics and low inflation. I am suspecting that one of the reasons that Matic Network push forward so hard is because they want to fully exploit the current Bitcoin bull market. 

60 day trading volume from cryptometer:

Technology Overview

Matic Network solution solves the scalability issue by transferring assets from the base chain to another  (called the “sidechain”), while ensuring asset security using the Plasma framework and a decentralized network of Proof-of-Stake (PoS) validators, so as to avoid miner centralization [1].

Key Features & Highlights

• Scalability: Fast, low-cost and secure transactions on Matic side-chains 
• High Throughput: Achieved up to 10,000 TPS on a single side-chain on internal test-net
• User Experience: Smooth UX and developer abstraction from main-chain to Matic chain
• Security: Matic chain operators are themselves stakers in the PoS system
• Public Side-chains: Matic side-chains are public in nature (vs. individual DApp chains), permission-less and capable of supporting multiple protocols

Matic Network Wallet

Matic Network has it own wallet created. With Matic Network wallet you can send, receive and manage Ethereum-based ERC20 crypto tokens. It also allows you to interact with Web 3 based decentralized applications (DApps) powered by Ethereum. The wallet seems to support only ETH and MATIC tokens. The app has a 3.6 score in Google Play and 10,000+ installs so far (30/11/2020). The UI is decent and it can connect with Dapp applications through QR scans. It also integrates with WalletConnect. Matic Network  does not seem to have frequent updates as the last update of the wallet was on November 26, 2019.

Architecture Overview

Matic network consists of three core components:

• Heimdall
• Bor
• Contracts

Heimdall is the heart of the Matic system. It manages validators, block producer selection, spans, the state-sync mechanism between Ethereum and Matic and other essentials aspects of the system. The Bor node or the Block Producer implementation is basically the side-chain operator. For the Matic network's Proof of Security based consensus, all the proof verification and handling of staking, rewards are executed on the Ethereum smart contract [1].

Github Repository/Code Overview

Heimdall (28/Nov/2020):



Most recent change: 2 months

Oldest change: 2 years

Programming language used: GO

Installation process: Easy

Bor  (28/Nov/2020):

Most recent change: 8 days

Oldest change: 4 months

Programming language used: Go/ Shell Scripts

Open source third party components: Used 

Installation process: Easy

Contracts  (28/Nov/2020):

Most recent change: 5 days

Oldest change: 17 months

Programming language used: Go

Installation process: Easy

Note 1: External component dependencies for all components: npm, go1.11+, truffle, rabbitmq (including all related Ethereum tools).

Note 2: Developer documentation excellent. 

Before we continue, I think it would be better to say a few words on why Matic Network choose Go and if this choice is aligned with their goals. Go was designed at Google in 2007 to improve programming productivity in an era of multi-core, networked machines and large co-debases [17]. So the main goal of Go is not to build user interfaces (UI) and improve user experience (UX), something potentially desirable for DApp applications, but for speed through concurrency. So Go is used mainly for server programming, which does prove that Matic Network did make a good choice. The negative aspect of this choice is that Go is relatively new language, with multiple bugs (including security bugs). 

Security Considerations

Matic Network joined a bug bounty program in Hackerone 6 months ago for the test network. Since the company has joined the program seven security issues have been reported. The total bounties paid is $2000, and below we can see the reward scheme: 

• $300 for Low findings
• $1500 for Medium findings
• $3000 for High findings
• $5000 for Critical findings

Based on the total number of bounties paid we can safely assume that only low and maybe medium issues have been found. The interesting part is that the average time of first response (after initial security report is received) is 6 hours, which is fast. So far seven issues have been identified (seven successful submissions) and six have been resolved (meaning that most security issues are patched). 

Below we can see indicative examples of valid attacks that could be attempted on Matic Network:

• Double spend by getting the clients to accept a different chain
• Double spend by validating malicious blocks
• Tamper/manipulate blockchain history to invalidate transactions
• Cause network to mint tokens to own account
• Undermine consensus mechanism to split the chain
• Censorship (e.g. on votes)
• Steal tokens from node
• Prevent node from accessing the network
• Abuse bugs in the economic system to defraud other participants (e.g. avoid transaction fees to full nodes)
• DDOS attack
• Chain halt and shutting down the network

At this point, for the more technically savvy people, it does worth mentioning that in rabbitmq and GO programming language there are some vulnerabilities identified in certain versions, more specifically for GO[6]:

• Go before 1.12.10 and 1.13.x before 1.13.1 allow HTTP Request Smuggling. - Medium
• The crypto/x509 package of Go before 1.10.6 and 1.11.x before 1.11.3 does not limit the amount of work performed for each chain verification, which might allow attackers to craft pathological inputs leading to a https://blog.bluzelle.com/layer-2-leader-matic-network-partners-with-bluzelle-to-provide-decentralized-data-storage-to-dapps-e9099011b1fbCPU denial of service. Go TLS servers accepting client certificates and TLS clients are affected. - High
• In Go before 1.10.6 and 1.11.x before 1.11.3, the "go get" command is vulnerable to remote code execution when executed with the -u flag and the import path of a malicious Go package, or a package that imports it directly or indirectly. - Critical

For rabbitmq [7]:

• Pivotal Spring AMQP, 1.x versions prior to 1.7.10 and 2.x versions prior to 2.0.6, expose a man-in-the-middle vulnerability due to lack of hostname validation.  - Medium
• An issue was discovered in Pivotal RabbitMQ 3.x before 3.5.8 and 3.6.x before 3.6.6 and RabbitMQ for PCF 1.5.x before 1.5.20, 1.6.x before 1.6.12, and 1.7.x before 1.7.7. MQTT (MQ Telemetry Transport) connection authentication with a username/password pair succeeds if an existing username is provided but the password is omitted from the connection request. Connections that use TLS with a client-provided certificate are not affected.  - Medium
• CRLF injection vulnerability in the management plugin in RabbitMQ 2.1.0 through 3.4.x before 3.4.1 allows remote attackers to inject arbitrary HTTP headers and conduct HTTP response splitting attacks via the download parameter to api/definitions.  - Medium
• Cross-site scripting (XSS) vulnerability in the management plugin in RabbitMQ 2.1.0 through 3.4.x before 3.4.1 allows remote attackers to inject arbitrary web script or HTML via the path info to api/, which is not properly handled in an error message.  - Medium
• RabbitMQ before 3.4.0 allows remote attackers to bypass the loopback_users restriction via a crafted X-Forwareded-For header.  - Medium

Conclusion

Finally after all this analysis the time has come to say my opinion on what is the verdict outcome. Below you can see the pros and cons based on the information collected:

PROS:

Here are my pros about Matic Network:

• As far as their business/social presence is concerned from me gets an 9 out of 10. Well designed site, clear businesses goals, strong community, good partnerships. 
• As far our their technology is concerned from me gets a 7 out of 10. Well documented technology good technologies adopted, easy to install software.
• As far as the token economics is concerned I will give it a 7 out of 10. The coin inflation is good.
• As far as the product information security posture is concerned, Matic Network demonstrates a healthy attitude, by participating in a well known bug bounty program. The code is publicly available and can be reviewed by anyone.
• Very well designed stacking mechanism and decent reward systems, this is a 9 out of 10 staking technology.

CONS:

Here are my cons about Matic Network:

• As far as their business goals are concerned Matic Network is entering multiple high competitive markets such as payments, gaming and DEX(s), instead of focusing in only one or similar markets (e.g. DEX(s) and payments).
• Utilizing the Matic Network token for payments, makes it not good as a value for storage asset (e.g. using it as a currency for retail usage, suppresses the token value).    
• The Matic Network wallet does not have a good rating in Google Play and it has not been updated since 2019.
• The technologies adapted from Matic Network, such as Go programming language, is relatively new and immature. This will later on translate to multiple functional and security bugs.       

Total score is: 8 out of 10 for long term investment and a 7 out of 10 for short term.

References:

• https://matic.network/ [1]
• https://academy.ivanontech.com/blog/defi-deep-dive-what-is-matic-network [2]
• https://cryptorank.io/ico/matic-network [3]
• https://etherscan.io/token/0x7D1AfA7B718fb893dB30A3aBc0Cfc608AaCfeBB0 [4]
• https://decryptionary.com/dictionary/hard-cap/#:~:text=Hard%20cap%20is%20defined%20as,selling%20them%20directly%20to%20people.[5]
• https://www.cvedetails.com/vulnerability-list/vendor_id-14185/product_id-29205/version_id-280800/Golang-GO-1.11.0.html [6]
• https://www.cvedetails.com/vulnerability-list/vendor_id-15183/product_id-30922/version_id-179125/Pivotal-Software-Rabbitmq-3.3.5.html [7]
• https://hackerone.com/matic-network/?type=team [8]
• https://www.globenewswire.com/news-release/2020/07/29/2069530/0/en/Blockchain-Foundry-and-Matic-Network-Establish-Partnership-to-Research-Blockchain-Interoperability.html [9]
• https://blog.matic.network/matic-partners-with-ankr-network/ [10]
• https://blog.bluzelle.com/layer-2-leader-matic-network-partners-with-bluzelle-to-provide-decentralized-data-storage-to-dapps-e9099011b1fb [11]
• https://medium.com/razor-network/razor-network-partners-with-matic-network-af6521b6771f [12]
• https://medium.com/powerpool/powerpool-x-matic-network-partnership-cf52b7301cae [13]
• https://www.meter.io/meter-matic-partnership/ [14]
• https://www.ledgerinsights.com/india-blockchain-accelerator-partners-matic-harmony-aeternity/ [15]
• https://www.crowdfundinsider.com/2020/10/167986-defi-protocol-mantra-dao-partners-matic-network-an-ethereum-layer-2-blockchain-scalability-solution-provider/ [16]
• https://en.wikipedia.org/wiki/Go_(programming_language) [17]
• https://www.stakingrewards.com/earn/matic-network?fbclid=IwAR0WSyOR9IEXwq9_X7HujeAE8yMwu3emYKmPCvxPF5Ooq9upxisQi3ogvnM [18]
• https://blog.matic.network/staking-on-matic-network-mainnet-is-now-live-how-to-delegate-matic/ [19]