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May 27th, 2020
Breaking Down Flipside Crypto's Score for STX
Earlier today Flipside Crypto posted their 'Fundamental Crypto Asset Score' for the Stacks cryptocurrency.
Stacks (STX) are used as fuel to execute Clarity smart contracts and to register digital assets like domains, usernames, etc. on the Blockstack network. These FCAS generated by Flipside Crypto are designed to help people more readily understand the health of any blockchain based crypto project. The FCAS is a 'comparative-metric' that looks at User Activity, Developer Behavior, and Market Maturity.

They've built some impressive technology that reads, maps, and normalizes on-chain data and further combine that with partners to 'map off-chain activity to on-chain results'. You can learn more about their data and process here, we'll cover the FCAS for STX more in this post.
Here's a bit more about these scores and how the rankings break down.
In my previous role at Blockstack PBC, I often helped Stacks holders or prospective purchasers better understand STX and the ecosystem around it. Scores like the one Flipside provides can can be helpful (when properly applied and contextualized) for a few reasons:

  • Crypto projects are complex, often requiring technical skills to verify data published by the project. For those without these skills (or the time to put them to work), Flipside provides a good starting point from which to understand blockchain activity and it's relative health.
  • Crypto projects can rarely be compared usefully side by side based on raw numbers, so applying a third party methodology that standardizes health indicators is useful. The metrics aren't perfect or exhaustive, but can provide context for comparison and change over time.
  • In the case of Blockstack, we value transparency. We previously disclosed over 100 pages of background as part of the first SEC-qualified crypto offering and using third party scores like this one will provide on-going, transparent updates about Stacks blockchain activity.

Just getting to a cohesive score like this, given the complexities and fragmentation is a feat. We think the Flipside Crypto team does a great job with these scores and in the case of the score for STX, thought it would be useful to break them down just a bit further.

If you're familiar with Blockstack, you know that the project has historically taken a very different approach to everything from regulation to the design of the blockchain and associated technology itself. With that in mind, I'll provide some more color and context, highlighting places where the score works well against Flipside's methodology and where it may not give as clear an indication.
The STX Score
Here's a bit more about these scores and how the rankings break down.
First, the score itself. Blockstack's initial rank is 'B' or 'Basic'. 730 puts Blockstack on the cusp of the second highest rating of 'A' or 'Attractive' which starts at a score of 750. A reminder that these scores are derived from scores in the following the areas (as shown in the graph above): Developer Behavior, User Activity, and Market Maturity.

Developer Behavior: The score for STX here was really strong, in fact, the Flipside team highlighted this a strength of Blockstack in their post announcing the STX score. Flipside defines this score as 'an indicator of how active and efficient a development community is on a specific blockchain or project'. They track 30 variables they pull from public and private code repos like Github. Blockstack's code is open-source on Github, which makes it easy to publicly track progress and contributions. The high level of Github activity likely positively impacted the good relative score for Developer Behavior. Shout out to all the folks contributing!

User Activity: This one is a bit tougher to triangulate accurately for Blockstack and we've actually been discussing how we might be able to help Flipside hone their score further for the Stacks blockchain and others that take a minimalist approach to on-chain activity. While the score here (a 'C' or Caution') isn't a bad one, it's more the data in that is an issue. Most activity on the Blockstack network takes place off-chain and in private applications run by independent developers. There may be a privacy-first way to more accurately measure or project true user activity on the Blockstack network in the future, but the very nature of the network means Blockstack's score here will need input from off-chain data. Given the private design, this score may never incorporate a complete set of data for Blockstack. That said, with the launch of Stacks 2.0 and Clarity smart contracts, some on-chain information for smart contracts will likely start getting indexed and incorporated into this score.

Market Maturity: For this score, the STX token received a score of 567, also a 'C' or 'Caution. This score is derived from risk and liquidity factors and has only a 5% impact on the overall FCAS. The methodology and data input for this score align well enough to give a reasonable score for STX, but the market for the STX token is very young and faces a different reality than most other cryptocurrencies as it maintains compliance and limited exchange integrations (for the time-being). We imagine this score will improve over time as these markets naturally mature.
Overall, this is a great starting point for STX and we're thankful to the Flipside team for providing another lens through which people can understand STX and the overall ecosystem.

The takeaway from Flipside regarding STX is that there is already a thriving developer community, and more accurate data and market maturity can potentially help other scores. Their analysis states that "Blockstack's FCAS score will likely increase with the release of Stack 2.0. Bitcoin is still the world's most popular cryptocurrency, and this new consensus mechanism presents a whole set of new use-cases for it."

To follow updates, you can find the Stacks FCAS on CoinMarketCap's Ratings.
If you have any questions, you can get in touch at stackstoken.com and be sure to join the upcoming Blockstack Townhall if you have further questions you'd like to ask live with the community.


Brittany Laughlin is the Executive Director of the Stacks Foundation. She's spent the last decade working at the intersection of community, capital, and internet collaboration. She tweets at @br_ttany.

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