- INVESTMENT IDEAS
Talking to the Mooon(river)
- After a sensational launch on the Kusama Network, Moonbeam’s canary network has skyrocketed from the low $70s to a high of ~$500 in two weeks.
- Moonriver is in a unique position, having received the backing of both Coinbase Ventures and Binance Labs.
- Despite being in its early stages, this community-led smart contract platform is evolving into a serious competitor to Cardano, Solana and, perhaps, even Ethereum.
- With SUSHI and CREAM deployment releasing in the coming weeks, this $MOVR(ment) is just getting started.
While Ethereum can be credited with revolutionizing blockchain by introducing smart contracts that contributed to the emergence of thousands of decentralized applications, its expansion has made the ecosystem more congested, thereby warranting the creation of specialized blockchains. As such, recognizing the advantages of both Ethereum and Polkadot, the Moonbeam foundation developed a multi-chain solution to combine the best of both worlds: the familiar and easy-to-use tooling of Ethereum and the scalable, interoperable architecture of Polkadot.
Smart contracts are self-executing, automated applications that run on a decentralized network such as blockchain. A smart contract is an agreement between two people in the form of computer code. They run on the blockchain, so they are stored on a public database and cannot be changed. For example, imagine that Alice wants to purchase Bob’s home. This agreement would be written on the blockchain using a smart contract. This smart contract contains an agreement between Alice and Bob. When Alica pays Bob the agreed amount, say 200 ETH, then Alice will receive the deed and ownership of the house.
Ethereum is coded in the Solidity programming language, while Polkadot and Kusama are coded in Rust. Moonbeam will launch on the Polkadot network, but it will be Ethereum-compatible. That is, it enables developers to deploy existing solidity smart contracts on the Polkadot network to take advantage of the network's speed and interoperability. Moreover, Ethereum developers will be able to overcome scalability and cost-efficiency concerns, while expanding their influence on the Polkadot ecosystem.
Moonriver, on the other hand, is a Kusama-based smart contract blockchain designed to test early, experimental and innovative Moonbeam projects. Moonriver, like Moonbeam, provides full Ethereum compatibility by duplicating its Web3RPC, logs, accounts and other features. It allows developers to redeploy their ethereum-decentralised applications (dapps) in the Kusam ecosystem with ease. This means that the smart contracts that power Ethereum dapps will not need to be rewritten or reconfigured for the Kusama network. The Moonriver platform will offer three main services to developers: 1) It allows Ethereum-based smart contracts to migrate to the Kusama environment, 2) It enables Ethereum-based tools, such as the Ethereum ERC-20 wallet Metamask, to be used with Moonriver and 3) It allows token transfers, state visibility and message-passing with Ethereum and other chains like Bitcoin.
Token to the Moon (Tokenomics)
Although Moonriver will share the same codebase as Moonbeam, it will exist as a separate blockchain with its own unique set of features. MOVR, the utility token of the Moonriver, plays a vital role in the function of the network and has several functions including:
- Paying for transaction fees on the network.
- Supporting the gas metering of smart contract execution.
- Facilitating the on-chain governance mechanism including proposing referenda, electing council members, voting, etc.
- Incentivising collators and powering the mechanics around the creation of a decentralised node infrastructure on which the platform can run.
With a circulating supply of 1.5m tokens and a total supply of 10m tokens, the token is already subject to scarcity, which has been reflected in its current price. Integrating with both SUSHI and CREAM, Moonriver has already secured over 10% of the biggest DeFi projects.
The Moonbeam community has successfully secured a slot in the Moonriver crowdloan and has hit a critical milestone with over 205,000 KSM tokens collected from contributors. Moreover, it has possibly won the prize for providing a legendary reward/risk ratio rarely seen in the space - 14.55 MOVR per contributed KSM. While 30% of the rewards were given right after the launch, the remaining 70% will vest over the course of 48 weeks.
Staking - Current staking rewards for MOVR are said to be in the range of 40-50%. Having a MetaMask installed and turning it onto the Moonriver dashboard, enables you to easily stake your tokens. You will play the function of the nominator, but instead of validators, as in other staking protocols, you'll select collators. While you can designate up to 25 accounts, each one will require a minimum stake of 5 MOVR.
$MOVR Pitch, get out the way!
Cardano for one, does not have smart contract capabilities, as yet, and, despite the touted alonzo fork underway, it is unlikely to gain adoption from the developer community given that it is written in the Haskell and Plutus programming languages. It is hard to justify an $80bn valuation for a network that is yet to be proven but, hey, tribalism has other plans.
Solana has been the recent darling of the crypto world. With its recent price surge,, even big VC funds seem to be piling onto each other to back this project. While Solana is cheaper and faster than Ethererum, processing 65,000 transactions per second, it gives way in terms of decentralisation. Becoming a validator in the Solana network is quite capital intensive, as it requires almost $12,000 in hardware costs. This makes it almost exclusively accessible to the group that has the resources. In effect, just 5 nodes control over 50% of the stake on the network.
Cheaper, better, faster, MOVR - Being EVM compatible enables easy cross-chain integration and allows one to store tokens in ERC-20 wallets such as metamask. Transaction fees ($0.00093) on the Moonriver network are ~4200 times cheaper than on the Ethereum network. In comparison to many of the ethereum competitors, Moonriver, with a market cap of just $600m, is entirely community-led and has over 200 projects set to build on it. No prior private sales or Founder/VC tokens lend further credibility. It is yet to be listed on any major exchanges. With the total value locked increasing rapidly, growth is foreseeable once it launches on Sushiswap and CREAM finance.
Being built on Kusama gives Moonriver a flexible framework and a number of advantages, but the entire Polkadot and Kusama ecosystem is yet to be proven. The real challenge will be getting enough traction and building enough of an ecosystem and developer community.
Nothing in this article constitutes professional and/or financial advice. The content is provided exclusively for informational and/or educational purposes. Nothing is to be construed as an offer or a recommendation to buy or sell any type of asset. Seek independent professional advice in regards to financial, tax, legal and other matters.