BlockCat: Fresh Out of ICO, With an Uncertain Price
BlockCat was one of the promising ICOs in the past months. For now, the token price is still finding a range, staging a dramatic drop and rise.
What is BlockCat? Its white paper states a catchy, but vague slogan- "Smart Contracts for Everybody". BlockCat aims to automate complex transactions such as delayed payments or joint purchases. This is yet another example of using the blockchain to disrupt services that usually involve a trusted third party with fiduciary duty. Smart contracts allow users to exchange value in complicated ways by automating the trust process and involving algorithmic checks to avoid fraud.
BlockCat has an added layer of simplicity: users may create smart contracts without knowing how to program. And this is an advantage to Ethereum, which requires much technical knowledge.
BlockCat is an Ethereum token, using the capabilities of the Ethereum Network. Unfortunately, users will have to wait until BlockCat produces a stable product, and until then, the token will remain a speculative asset, with the possibility of being listed on an exchange like Poloniex or Bittrex, or facing long volumes and a depressed price.
The BlockCat Crowdsale
The BlockCat crowdsale ended just two weeks ago, and some of the token holders already started selling on the open market on the EtherDelta exchange. This is a visual of the distribution of wallets after the token sale:
The largest blue section is a collection of all small wallets that contain up to 34% of all CAT tokens. The other big share belongs to the dev team lock, and the rest are big holders. The team claims that after the ICO, only six wallets hold more than 1% of tokens for a single owner. And the average token sale participation is for around 6 Ethereum. The whole story of token distribution can be found at Etherscan (https://etherscan.io/token/tokenholderchart/0x56ba2Ee7890461f463F7be02aAC3099f6d5811A8).
What is encouraging is that the BlockCat sale ended up with a wide distribution of more than 3,000 wallets. This sounds encouraging, as BlockCat will aim to use the token for the process of creation of smart contracts. But it seems users are shedding some of their holdings, as two weeks post ICO the order books at Ether Delta featured much more sell orders than buy orders.
The Problem with Smart Contracts
Smart contracts are seen as a great and promising thing, immune to human mistakes. But the problem is, humans still need to create the contract, and the contract is as smart as the people involved.
BlockCat will try to simplify the process by offering templates and patterns for a contract, but there is no guarantee the contracts would work as expected. And the building of a smart contract still requires some brain juice- just look at this visual editor for smart contracts. One would need to think it through, or else end up with confusion and losses.
But we still have to wait and see until early 2018 on what BlockCat will manage to produce, and how the contracts will look. The mission of the company is to make smart contracts "simple, readable and cost-effective", and to take out the mystique and the need to hire programmers for each contract. Yet the final test would be user adoption. And BlockCat has to compete with already established escrow services, crowdfunding platforms and voting systems.
BlockCat Market Price
Currently, BlockCat stands at position 190 at CoinMarketCap. It had risen as high as the top 100 tokens for a while, but fell back.
In the past week, the token has taken a beating, losing half of its market price. But this is normal for post-ICO tokens. The nominal ICO price was $1 per CAT, so the token still trades at double the sale price. But depending on how many new investors decide to sell off, the price may fall even further.
The peak price just after the token sale was around $4.84.
BlockCat has its own joke of a "flippening"- it aims to surpass the market capitalization of DogeCoin (DOGE). But Dogecoin is still at number 37 for CoinMarketCap, with nearly 20 times the market capitalization above $230 million, due to its unlimited supply.
BlockCat is listed on EtherDelta, a very basic marketplace for placing orders against Ethereum. Currently, holders of CAT will face the double challenge of selling pressures and a newly peaking Ethereum price- so some may decide to hold instead of sell. But as of September 1st, the orders for CAT were all in the red, with selling dominating.
The BlockCat Team
The BlockCat team is highly visible, presented on the project landing page. Eric Huang is presented as the CEO for the project on one of the pages, while Graeme Douglas is the CEO figure according to the tokenmarket.net profile. (https://tokenmarket.net/blockchain/ethereum/assets/blockcat/) But this is only a small confusion, as cryptocurrency teams seem to have interchangeable roles. BlockCat is the first big project for Eric Huang just out of university, according to his LinkedIn profile.
The rest of the team consists of computer science instructors and researchers- the BlockCat staff seems to have an academic bent.
Fortunately, if you brave the interface of EtherDelta and deal with the order book, you can store your CAT tokens on MyEtherWallet or another Ethereum wallet.
The Verdict on BlockCat
BlockCat has a long way to go before appealing to a broader audience. While it was a top-rated token sale, it still attracted much lower interest compared to projects like Civic (link to Civic article). In the following months, more exchange listings could bring higher trading volume. Currently, the trading volume is just $101, 215. With so few market participants, price volatility is guaranteed. It is usual for recent ICOs to have 24-hour trading volumes below $1 million, but some projects fare better than others.
If you like the BlockCat project and would like to hold tokens to be able to use its service, it is possible to buy and hold now. But avoid investing funds you cannot afford to lose in part or in whole due to market volatility or technical issues. Beware fake tokens that mimic CAT.