I’m Investing in Superalgos ($SA) and This is Why!
A great opportunity to get in early: fair launch, a finished product, and marketing just starting!
Note: This article is not Financial advice.
I found out about Superalgos through an article one of the founders published in Coinmonks a while back about turning a Raspberry Pi into a crypto trading bot. “Interesting,” I thought… but didn’t look into the project further at that point.
Then WallStreetBets happened. Remember the story about millions of small fish eating the whale’s lunch? The phenomenon captured the attention of worldwide news media for two weeks! It was right then and there that Coinmonks got this other piece from the same author: How the WallStreetBets Phenomenon May Evolve Into a True Collective Trading Intelligence.
“This is crazy! These guys are onto something”, I said to myself. So I started looking into Superalgos.
The first thing I noticed was that the project was moving fast and gaining momentum in the development department: the progress log in the website showed they were delivering a new version of the platform every two or three months. Seemed too good to be true for a community-run open-source project with no big investors behind it… so I went on and checked their Github repository. I found some crazy activity backing the claims on the website, with over 100 contributors, +2k stars, and +4k forks.
“Seems legit”, I thought, “How come I’ve never heard of them before?”.
The Rabbit Hole
I went on and installed the Superalgos Platform. Back then, the installation process was rather technical, but not too hard to follow given the clear instructions on the repo’s README. They recently launched a portable version that is ridiculously easy to deploy: download and run without even installing anything! And there’s even an online demo to try before downloading!
I did the first interactive tutorial and got my mind blown away!
I’ve been interested in trading automation for some time, and I’d seen everything out there, or so I thought. Still, never in my life had I seen an approach like this! What an ambitious undertaking!
The platform is vast, and covers every important aspect of trading automation: mining data from exchanges, processing and visualizing the data, designing, testing, and deploying trading strategies in multiple markets, multiple exchanges, and even in multiple coordinated machines! Everything happens in a visual environment that makes it easier to understand the complexity behind trading and automation.
So, it’s not surprising that Superalgos is first on Github when searching for “trading bots”.
Again… why haven’t I heard of Superalgos before?
Checking the Team
According to the progress log, their origin story starts like this:
AUGUST 2017, Project Kick-off: The Superalgos Project started in the summer of 2017 with founder Luis Fernando Molina, a visionary entrepreneur and systems architect with a track record in fintech developing mission-critical systems for banks.
It all sounds very appropriate, but, to be honest, I couldn’t care less about someone’s experience or history. What I care about when researching projects is finding out if the team can deliver or not.
So I started reviewing the progress log, contrasting it with the Medium announcements, and even diving into the community chat history and the Github repo to verify if the log is real.
It is.
This is what I found…
August 2017 was the start of the bull run that lead to the $20K Bitcoin ATH and the ICO craze. Still, these guys didn’t write a whitepaper to raise millions in an ICO. Instead, they went on “heads-down mode” and started coding. The market exploded in December 2017 and a year-and-a-half-long crypto winter ensued.
What was the team up to during crypto-winter?
Delivering the MVP in October 2018 — middle of crypto-winter — and the Alpha version of the platform by August 2019 during the ephemeral bull run that was cut short by the Covid debacle. Between August 2019 and the Covid market crash of March 2020, they delivered two beta versions!
By the time the current mega bull run accelerated in October 2020, they had delivered Beta 7! A year later, that is, a couple of months ago, they were delivering Beta 11, and preparing for the imminent launch of the platform, finalizing the open beta phase.
This seems like a bullet-proof team to me! They didn’t just survive crypto-winter and the Covid crisis… they thrived like cockroaches! It feels like you can nuke them to the stone age and they’ll keep coding in clay tablets!
Can’t believe I haven’t heard of these guys before!
Understanding The Project
I’ll take a stab at summarizing what the project is about.
It seems like these guys spent four years building the most powerful and flexible trading bots platform to attract algo traders just so that they can leverage the user base to develop what is the actual business of the project: an open trading intelligence network.
That’s right! The platform that blew my mind is not even the main product of the project!
I have to say, it took some time to process this finding. What a bold move! These people are either nuts or true visionaries — or both!
Let me say this again: they spent four years building a platform that is not the main product. Why? Because the platform is the foundation of a much bigger ecosystem.
This is what I got to understand and distill about the overall project strategy after talking to a few people in the community, including the founders who are readily available on-boarding contributors and answering questions:
Phase 1:
- Build the best crypto trading automation platform, open-source it, and make it free for everyone to remove all friction and favor adoption.
- Get to the #1 position on Github. This will attract tons of developers with an interest in algo trading.
- Incentivize developers with the native token to accelerate contributions and make all contributors own the project so that everyone is invested in the collective success. The incentives will make the project and the product grow and improve much faster than any other open-source project or company.
- Turn the open-source project into an ever-improving tech infrastructure with an ever-growing contributors base including data scientists, AI engineers, and folks covering the whole spectrum of modern trading automation. The ever-improving product will attract the best algo traders.
- The best algo traders will use the platform to create intelligence and automate their trading.
So far, it seems like a sound business plan to conquer a small niche market, and that seems to be what the project has done until now.
What amazed me is why the project did all this: to enable the mass-market product!
This is what comes next, and is currently under development:
Phase 2:
- Build a peer-to-peer network to interconnect the user base with zero technical friction.
- Incentivize algo traders to disseminate trading signals over the peer-to-peer network.
- Build easy social trading apps for crypto users so that they can deploy bots that consume signals from algo traders!
- Make the social trading apps and signals free for everyone to drop entry barriers to the ground and favor friction-less mass adoption.
Brilliant!
So, in a nutshell, the project built the Superalgos Platform to attract algo traders (experts in trading automation) so that they produce trading intelligence. Then, the project incentivizes this niche-market crowd to produce and disseminate trading signals so that a much bigger mass-market crowd can use the signals free of charge!
What About the Business?
So, how does the project make money if everything is free for everyone?
Yes, that was my next question!
The answer is in the token distribution model: 100% of the tokens go to contributors!
That’s right! The project has never sold tokens. There was no seed round, no private sale, and no public sale. Everyone in the project earns tokens rewards for the value they create, be it code, business development, or trading intelligence. The founders are contributors like everyone else. Talk about fair launches!
This means that the whole community is heavily invested in the long-term success of the project and the token, as everyone participates in a collective business based on token appreciation.
The Target Market
To set a target and better understand my investment horizon I needed to answer a few more questions:
How big is the target market? What is the potential of the project and how far can it go?
The target market is 100% of crypto users. Two hundred million as of a few months ago, and growing faster than the Internet did, tractioned by Bitcoin, meme coins, DEFI, NFTs, and so on. As a crypto guy, I know that crypto will rule the world sooner or later. So the target market — in the future — will match the target market of the Internet itself.
So, what fraction of this massive market may Superalgos tap into?
Let’s see… These social trading apps will allow crypto users to follow the experts in the community and copy their trades, free of charge. No subscription fees, no commissions, no performance fees, no nothing!
All people need to do is download the app, follow an algo trader, make sure their account at the exchange has some sats or whatever coin they wish to trade, and go!
Who wouldn’t want to have a little money-making machine in their pockets?
I don’t know! If you ask me, I can’t find a single rational reason why any regular folk using crypto wouldn’t want to at least try these apps and see how they go!
But, how good can this free trading intelligence be? Will users make money?
The best answer I can give is I don’t know, but things look promising considering how the incentives are designed: algo traders will earn token rewards proportional to the size of their following.
Let me try to unpack that.
Algo traders use the Superalgos Platform for their own trading. The project will offer an additional scheme for them to monetize the intelligence they produce.
Let’s say I’m an algo trader making money with my bots. The project building and maintaining the platform I use for free offers me an additional revenue stream without any further efforts. Would I take it? Why not? Particularly if it doesn’t involve revealing my trading strategy, as I’m only providing signals. In fact, people trading after me may benefit my trading!
If successful traders offer signals, it’s a good start. Then, it’s an open competition among the community of algo traders. Those with a larger following earn more tokens. That translates to those offering the best signals earn more tokens. So there is a clear incentive to produce quality signals.
It makes sense because, if followers don’t make money following someone, they will simply remove the following, and that someone won’t earn tokens for their signals.
I believe it is safe to assume that some people will make money following algo traders. And, at the end of the day, it’s a matter of how much effort people put in finding the right algo traders to follow.
And that is precisely the intent of the design of incentives and the free-for-all business model: end-users get everything for free because they too add value to the network. How? Curating trading intelligence! Finding what works and what doesn’t! It’s genius!
I still can’t believe I didn’t learn about Superalgos earlier!
The Potential
Beyond the workings of the product and analyzing the feasibility of the overall proposition, I always like to sit and think about the impact the project may have in the industry or even the world.
How disruptive may the project be? Will the project become a worthy candidate for the next Movers & Shakers list?
There are several aspects of the project that have disruptive qualities, but the one I’m obsessed with is what the project describes as “unstoppable coordination”.
Remember the WallStreetBets case I brought up earlier?
The story was about a crowd of millions of investors taking a position on Gamestop (GME) to set up a short squeeze against the hedge funds that were shorting the stock. The coordinated action was in the news for weeks all over the world, as it was the first time something like this had happened.
If you followed the story back then, you probably remember that the whole collective effort came to a sudden halt when Robinhood, the broker, decided to stop users’ ability to keep buying the stock. Shockingly, the company allowed users to sell the stock, but not to keep buying!
Whatever the reasons behind Robinhood’s actions might have been, the lesson to take home is that whenever there is a centralized party controlling the flow of transactions, there is no real ability for retail traders to coordinate.
That is exactly the problem that Superalgos solves.
The project enables millions of traders to coordinate to take positions by following each other. Unlike the WallStreeBets crowd at Reddit, Superalgos removes all the friction in communications, as the action is coordinated through automation.
No need to read and decipher thousands of messages on a thread in a forum. Reddit, as an Internet forum, uses technology that has been around since the ’90s. Superalgos brings a much-needed iteration on coordination technology.
It took three weeks for the millions of investors behind WallStreetBets to take the position. With Superalgos, it will take a minute or two.
However great that is, removing friction from the communication is not going to be the greatest impact of Superalgos.
What is truly revolutionary is that the coordination is unstoppable!
Think about it!
Users of the social trading apps run the trading bots on their devices. It’s not a web service where the service provider may decide what users may or may not do. Also, users trade directly from within their accounts at their exchange of choice. All major exchanges with a decent API will be available. Finally, trading signals are disseminated over a pseudonymous peer-to-peer network.
This is pretty much a censorship-resistant setup, as no actor may intervene in the direct communication between two devices.
What will happen when millions of traders coordinate to take a position across all exchanges on the planet and no one can stop them?
I have no idea! But what I do see is that this is going to be a major disruptive force!
The Competition
What competition?
Superalgos is disruptive at the level of the business model. Think of it this way…
You have a free and open-source platform, first on Github. According to verified reviews from folks like me who know a bunch of the trading bot platforms out there, nothing compares to Superalgos in terms of power and flexibility.
The social trading apps are also free and open-source, and so are trading signals.
On top of that, it is the first project building this sort of open trading intelligence network, so they have the first-mover advantage.
Top that with a “machine” that is designed to “self-update and self-improve” as an ever-growing collaboration, with 100% of the tokens going to incentivize project development.
Who in the world can compete with that?
Back in the day, Wikipedia won the race against Microsoft Encarta and Encyclopedia Britannica with an open collaboration of editors working for free, with no other incentive than altruism.
I rest my case.
Challenges and Threats
If you study carefully how these guys designed the project, you will probably conclude that they are very much aware of the challenges they may face in a mass-adoption scenario.
The project is decentralizing the original core team structure into a horizontal organization of autonomous teams. The codebase is split into multiple projects so that different teams may take the reins of different sections of the tech infrastructure. Beta 11, released in September 2021, shipped the governance system ceding control of the distribution of the token and the direction of development of the project to the community.
Decentralization is a crucial feature in crypto, making projects a lot more resilient to all sorts of attacks.
Superalgos found a really sweet spot distributing tokens only to contributors — as fair a launch as it can be. The fact that they never sold tokens puts them far from the cross-hairs of securities laws and regulations.
The business of the network — disseminating trading signals — is an unregulated activity, and the project never touches funds in any way, staying clear of financial services activities.
With such a disruptive potential, I have no doubt the project will find numerous challenges along the way. But I feel comfortable that a team that survived both crypto winter and Covid — unfunded and pulling themselves by the bootstraps, while delivering such an amazing platform — is very well suited for the job.
The Community
If you spend enough time in trading groups or the regular crypto project community group, you probably start losing faith in humanity. Usually, no one gives a shit about newcomers, there’s constant yelling and name-calling, a bunch of spammers shilling shitcoins, and the occasional scammer here and there.
When I first joined the main Superalgos community group in Telegram and asked a few questions, I was surprised by the quality of the conversation. “How refreshing”, I thought, “it feels like grownups doing real work”.
The Superalgos Platform seems to have attracted a community of high IQ folks. The kind of people smart enough to be successful at trading automation — not an easy task. Many contributors end up in the moderation team, and there’s always plenty of people willing to help.
Each of the autonomous teams has its own public Telegram group that anyone may join, either to help, ask for help or simply take part in the conversation and the ongoing activities.
It feels like a very sound base from where to grow! By the way, they’re on Discord as well.
The Token
I already pointed out some of the interesting properties of the token, for instance, the simple and notable distribution among contributors.
The token overview page on the website explains the rest of the properties. I will go over some of the highlights and you can read the whole thing if you wish.
The most important definition is that it’s a capped economy with decreasing inflation, pretty much like bitcoin. I love simple tokenomics! Projects that come up with complex economic systems end up alienating people unable to decipher the intent of the design.
1.5 billion tokens of max supply, with a decreasing issuing schedule starting with 128 million tokens per year, with a halving every six years. Crystal clear!
The current circulating supply is around 450 million tokens. With a value of around 6 cents of a dollar per token, the current market cap is around $27 million.
If you ask me, this seems like a very low valuation for a project in the current state of development! Teams were raising that kind of money over a whitepaper when these guys started coding, back in the ICO bubble days!
Why in hell is the price so low? Bear with me… I’ll tell you in a minute!
Let’s talk about the token utility first.
The first significant utility case is governance. Token holders define the direction of development and how rewards are distributed by voting on the governance system built-in in the Superalgos Platform.
In the beginning, I was a bit disappointed as I thought that most users wouldn’t care that much about governance. I thought there would be little demand for the token concerning this utility case. However, I was missing the importance of governance as the network matures, and the relationship the project has with exchanges!
One of the founders clarified the whole thing in a post explaining the demand drivers for the token.
The thing is that the Superalgos Network will eventually concentrate significant trading volumes. We’re talking about millions of crypto users trading on multiple markets, 24/7!
Exchanges have an obvious interest in capturing as much trading volume as possible, therefore, they will be hoarding Superalgos tokens as soon as they realize what’s going on. Why? Well, to influence the direction of development via the governance utility! Of course!
Exchanges will fight to control the Superalgos Project. That is a fact.
The second utility case is priority access to signals. This means that, while signals are free for everyone, users holding the most tokens will get the signals first.
Again, this was hard to grasp in the beginning, and took some time to figure out the brilliance in the design of the utility.
Yes, it’s obvious that getting the signal first will result in better performance. But when I was first thinking about this, I was focusing on the wrong variable. I was thinking in terms of time and latency which shouldn’t be more than a few seconds or even a minute between the first and last recipient of the signal. But that’s the wrong analysis! Time doesn’t really matter! What matters is the state of the order book!
Imagine millions of people following the same algo trader. That means that millions of orders hit the order book, one after the other. So it doesn’t matter the separation in time between orders. All that matters is the position in the sequence of orders. If my order is first, I will get a certain price. If it’s last, I will get a much worse price, as the order book will have moved significantly by the time my order is matched!
Also, the article goes through the game theory behind the whole thing: If you have zero tokens, you will be last, but if you have at least one token, you will be ahead of everyone else that has zero! That’s a clear incentive to get at least one token from the market! And, of course, the logic can be applied in an infinite loop following the same reasoning: if you get two tokens you will gain a lot more positions!
So it’s pretty clear that the demand for the token is guaranteed on the end-user side of things too!
Did you notice that none of the utility cases requires actually spending the token? That’s right! Both utility cases require holding the token, not spending it!
That means that the demand side of the market will increase with project awareness and use, while the supply side will decrease with decreasing inflation.
By the time the network matures, it will be hard to get any tokens at all!
Short-Term Opportunity
Superalgos is undoubtedly a unique project.
The way everything is framed, how the team bootstrapped the whole development phase of the platform, the design of incentives enabling a collaboration that will never stop growing, iterating endlessly until the product reaches perfection… I haven’t seen anything like this before!
After some time studying the project, I finally realized why I hadn’t heard of Superalgos before and the reason for the low valuation: because they’re just starting marketing!
The existing community was built purely through word-of-mouth and organic traffic to the website and the repository!
Few people know about the project today, but the PR agency they engaged a few weeks ago is already pitching the story of the launch to the media, so I’m sure the ridiculously low valuation won’t last long.
I will be sitting on my Superalgos ($SA) at least until they hit the Top 100 market cap position and a valuation in the billions! It’ll be a hell of a ride!
If you feel like jumping on board, the token is available on PancakeSwap. If you’re not familiar with the DEX, this is how you may fill your bags!
