Read about crypto-trading for 5 minutes and you’ll see the same criticism again and again: “These coins don’t do anything. They don’t produce value, or pay a dividend.”
While its easy to disagree, there’s also something undeniably sexy about a coin that does return something to its investors, besides simply an increase in valuation. A few companies have recognized this niche, and found ways to offer dividends to their holders, but none are more unique or intriguing than Quantstamp (QSP).
Quantstamp is offering monthly airdrops of various new coins to longterm QSP-holders. On paper, it sounds like a dream: Just kick back and pick up the hottest 2018 coins at no cost or effort. The reality, however, is a little more complicated.
So we’re going to dive in and uncover everything you need to know about QSP — whether you’re a newbie or a seasoned pro.
Quick note: This blog is not intended to serve as personal financial advice — this is simply the opinions of a business writer and amateur cryptocurrency trader. Don’t invest more than you can afford to lose. If you do decide to purchase QSP, please use my Binance and Coinbase referral links to support this blog. Thank you!
What is Quantstamp?
Quantstamp calls themselves “the first scalable security-audit protocol designed to find vulnerabilities in Ethereum smart contracts.” In layman’s terms, that means they’re a company that crash tests new coins before they hit the market in an effort to thwart any bugs or security vulnerabilities.
QSP tokens, issued by Quantstamp, are used to pay for an audit, to reward verifiers who identify bugs, and, of course, are a way to invest in the company.
The founder of Quantstamp was galvanized by the 2016 DAO attack, when 3.6 million ETH was stolen (and later recovered) due to a vulnerability in the DAO network.
Needless to say, this event, along with similar hacks, has produced a more cautious atmosphere when it comes to ICOs (initial coin offerings). It’s easy to see how an effective auditing system like Quantstamp could be embraced by entrepreneurs and investor’s alike. Especially in a market where 20+ new coins are introduced every week, a stamp of approval from Quantstamp could become a “certified organic” tag that separates solid investments from the riskier ones.
What are Airdrops?
Air drops are the automatic distribution of coins to qualified users in the crypto market. Or, put another way, it’s free money that appears in your account, just because you held a certain coin, or applied to be a recipient.
Airdrops usually happen because of forks. When Bitcoin Cash (BCH) split from Bitcoin (BTC) in August 2017, Bitcoin holders received their BCH in an airdrop. Other times, companies use airdrops as a form of marketing. Stellar famously airdropped XLM tokens to BTC holders in an effort to spur interest in their company. They arrived in the amount of ~1000 XLM for every 1 BTC, which is worth around $800 USD today… not a bad payout for doing nothing.
Quantstamp is Offering Airdrops to QSP Holders
One of the attractive features to Quantstamp is that they’ll airdrop coins they audit to QSP holders — in fact, 1–3% of each new coin’s total supply will be reserved for this purpose. This means that just by holding QSP, you get to hold every new coin they help launch, provided you meet some conditions (more on this next).
Officially, QSP does not have a set schedule on how frequently they will airdrop new coins, but so far its been once every 2 months (the first was revealed in Dec 2017, and the next will be announced Feb 2018). Assuming the company and the cryptomarket at large continue to grow, this is likely to occur more frequently throughout the year.
The Fine Print
If QSP sounds too good to be true, that’s because there are some key caveats and restrictions to their air drops.
First off, here’s the requirements to qualify for airdrops:
- Your QSP needs to be stored in an wallet like MEW — you will not qualify for airdrops if its held on an exchange like Binance. The transfer fee out of Binance is 30 QSP (~$15 USD), so make sure you buy enough to cover this.
- You need to register with the Quantstamp community by submitting this form & entering your wallet ID.
- You need to be located outside the US, Canada or China to get access to every airdrop. Due to regulations, citizens of those 3 countries cannot legally receive airdrops of certain ICOs. Quantstamp is working to change this, and planning to compensate those citizens with higher quantities of future airdrops.
- Finally, Quantstamp requires Proof-of-Caring (PoC), which basically means providing some level of support to the project. In a post on Medium, founder of Quantstamp Richard Ma outlined a few different actions that would qualify as PoC, like translating website copy, contributing code on github, making social media posts to raise awareness about Quantstamp, etc.
If that last point made you go “huh?” you’re not alone. Most of the criticism I see around QSP revolves around its this requirement, and the fact that you need to verify your ID with a Google+ profile. However, it’s not clear to me how strict the rules are — Do you actually need to do a significant amount of free work before you’ll qualify? Or is this just a small step designed to weed out daytraders?
I reached out to Quantstamp for more details on this. So hopefully I’ll be able to add an *update* here soon.
*Note: A previous draft of this article stated you needed a minimum of 500 QSP to qualify for airdrops. I was informed by a reputable Quantstamp community member this is not the case. There is no minimum amount required.
How Many Coins Will I Actually Get From The Airdrop
The answer to this is tricky, since it depends on so many factors: The total supply of the new coin, the percentage Quantstamp took as fees (ranging from 1–3%), the number of QSP holders registered to receive airdrops, and last but not least, your Proof-of-caring (Poc) score.
However, running some simple calculations, we can get a rule of thumb estimate.
REQ is one of the first coins Quantstamp audited. They both have roughly the same total supply (~1 billion coins). So if 1% of REQ tokens were distributed, that would mean 1 token for every 100 QSP in your wallet.
This is a conservative estimate, however, for a few reasons. First off, not all QSP tokens are in circulation (only ~600 million), and not all QSP holders are going to qualify for airdrops, considering the restrictions/steps involved. Finally, I was assuming Quantstamp took the lowest fee (1%) instead of the highest (3%).
So let’s change everything around: Let’s say only 10% of QSP tokens are held by airdrop-qualified investors, and QSP charged a 3% fee for the audit. At this rate, you’d receive 30 tokens for every 100 QSP in your wallet. That’s a pretty fantastic payout considering REQ is now worth close to $1 USD.
Count Me In!
Well not so fast… There’s still 1 key caveat. Quantstamp says the biggest factor in determining how many coins you’ll get is your proof-of-caring (PoC) score. Those who have held coins the longest, and have volunteered or contributed some service to the community, will have a higher score, and thus larger payouts. Quantstamp hasn’t shared their math (yet), so we’ll likely have to wait for the first airdrop before knowing exactly what this means.
*Note: In a previous draft, I stated you needed to hold ~15,000 QSP to make the airdrops worthwhile. That was assuming the most conservative estimate. Now understanding the distribution much better, and realizing the wildcard that is your PoC score, I can safely say all bets are off the table.
How to Buy Quantstamp (with BTC or ETH)
If you’re convinced to pick up some QSP, there’s a few different ways to trade it. Binance is my favorite exchange since it’s fast, rarely goes offline, and doesn’t require ID verification, provided you’re trading less than 2 BTC (or roughly $30,000 USD) per day.
Binance is also unique in that you can purchase QSP with either Bitcoin or Ethereum, whereas most sites only let you trade against BTC.
To get started simply create an account (you can support this blog by using my referral link) and load up your wallet with some ETH or BTC. Hover over “Funds” and click “Deposits and Withdrawals.” Find the coin you want to deposit and click “Deposit” on the right column. Protip: You can also fund your account with Litecoin, or most other digital assets, provided you convert it to ETH or BTC later.
Once your funds are confirmed, click Exchange and enter “QSP” in the column on the far right side. Click “QSP/ETH below (or QSP/BTC if you want to purchase using Bitcoin) to enter the Quantstamp trading menu.
From here you’ll be able to purchase QSP by specifying a price and quantity. The market price constantly changes, but you can monitor it on the top-left corner of the screen where it says “Last Price.” If you want the order to go through quickly, you can select the “Market” tab. Otherwise, you can set an order to buy QSP at a certain price.
How to Buy Quantstamp (with USD or EUR)
There currently aren’t any ways to buy QSP tokens directly from fiat currencies (like USD, EURO, CAD, GBP, etc.) Instead, you’ll need to buy Ethereum or Litecoin first from an exchange like Coinbase, then following the steps in the previous section to buy QSP on Binance.
The fastest route would be to purchase Litecoin using a debit or credit card on Coinbase. Then send it to your Binance account, trade it for Ethereum, and trade the Ethereum for Quantstamp. It sounds complicated, but it can all be done in a matter of minutes.
If you sign up for Coinbase using my referral link, we both get an extra $10. Please consider supporting this blog if you’re looking to purchase altcoins with ETH or BTC and don’t have a Coinbase account already.
So Is QSP a Good Investment?
On paper, QSP is an incredible investment. The company itself is poised to grow in 2018 (provided the entire crypto economy doesn’t tank…) and the ability to receive regular airdrops is mouthwatering good. If you’re an amateur trader like me, you know there’ll be weeks you simply can’t read up on new ICOs. Quantstamp relieves your FOMO, and might just fill your bags with the next big thing.
What’s the flip side? It’s still not clear how easy it is to qualify for airdrops, how often they’ll arrive, and how many coins you’ll actually get. My simple rule-of-thumb analysis showed you’ll get anywhere from 1 to 30 tokens per 100 QSP in your wallet (assuming the token has 1b in circulation)… which unfortunately doesn’t help much, given its such a wide range.
Finally, keep in mind that the first airdrop did not include US, Canadian and Chinese citizens due to trade regulations. Quantstamp is working to change this on future airdrops, and planning to compensate these citizens with extra tokens to even things out. As a US citizen I am still excited by this prospect, but I wouldn’t hedge savings on it until US participation is confirmed.
If you do decide to purchase QSP, please use my Binance and Coinbase referral links to support this blog. Click my profile to view my other cryptocurrency articles, including this month’s best free airdrop promotions.