Introducing Variable Labs
TL;DR: With the help of a few letters, we want to abstract away complexities behind assets, entities and concepts in the crypto-asset ecosystem.
With the emergence of a new asset class and the replacement of a magnitude of functions, we believe there needs to be a community, if not an entity that creates clarity around these changes and the new systems being established to replace their traditional counterparts.
Today, investors, individuals and institutions alike, are tasked with collecting and processing the vast information available to be able to make informed decisions. Furthermore, the ecosystem is full of extremely productive entities as well as its fair share of unethical actors, which are becoming harder and harder to identify as time passes. In relation to this, we want to be able to separate the wheat from the chaff, and support the decision making process of our intended users.
Introduction
With the introduction of a paper titled “Bitcoin: a peer-to-peer cash system”, a pseudonymous entity going by the name Satoshi Nakamoto, solved a problem that computer scientists and economists have been trying to solve for decades. A problem titled the “Byzantine Generals Problem”, which analogises Trust. This problem has entailed all of human cooperation, which is why applications on the internet were limited. Even within this limitation, the internet flourished, encompassing the entire planet with applications solving trillion dollar problems. Now for the first time ever, previous impossibilities have opened up in relation to every application and use-case entailing trust. This leads us into a new paradigm, which most layman are blind to or pessimistic about due to the current perception of the industry.
As speculation in digital assets peaked with all the hype created around blockchain technology in 2017, scams became prominent, taking advantage of the newly borne gold rush. Since most assets within the industry were overpriced, due to a lack of any intrinsic value created in that same period resulted in the negative perception of cryptocurrencies and blockchain in general. This was a result of most headlines linking the technology to one scam or another. This does not come as a surprise to those who have witnessed paradigm shifts, as in their early days any paradigm attracts its own set of scammers due to the inflow of new capital.
Continue reading our thesis on why this new paradigm will lead to the creation of entirely new sub-asset classes and concepts.
Use of Ratings
Risk ratings abstract away the complexities of the assets being rated for investors, regulators and other interested parties.
Ratings can be looked at in 3 primary ways, three of which are:
- Input
- Filter
- Abstraction
Users of Ratings
The primary users of ratings are:
- Investors
- Builders
- Regulators
Ratings Scale
Our ratings scale is standardised for all targets we rate, while the factors underlying each sub-asset class differ. This is due to the difference in value drivers, functionality, purpose and structure of each sub-asset class. Popular sub-asset classes in the ecosystem are: Currency tokens, Utility tokens and Security tokens.
Here’s a look at how we stand against a traditional counterpart:
Ratings Process
Pre-Evaluation:
- Ascertain legitimacy
- Establish standards
- Ascertain scope of work
- Ascertain required data points
- Ascertain timeline
- Establish plan
Evaluation:
- Collect public data
- Collect private data
- Approach team
- Draft report
Post-Evaluation:
- Deliver to promoter/s, if any
- Set score
- Publish report
- Track score
