Taking the Weight Off -- ANKR Fundamental Analysis

Edition 26 - The Elite Cryptocurrency Investment Strategy Newsletter

For those old enough to remember, people used to travel to a physical location to make purchases. 

A location containing a collection of businesses that provide goods and services to customers with diverse consumer needs goes by many names (mall, promenade, arcade, bazaar, marketplace, strip mall, plaza, etc) and comes in all shapes and sizes.

Each outlet assesses customer foot traffic and anticipates times of high demand by allocating more staff or ordering more stock to ensure customers do not have to wait long for service and avoid being told the outlet is out of stock. 

Whether customers would stop by the food court for lunch before shopping for clothes, whether an electronics outlet is well-placed to lure customers in for an impulse buy, or whether customers are just looking to ‘get in and get out’ – there are a lot of moving parts to capture customer dollars. 

In addition, purchases are often seasonal; fewer people are looking for summer clothes during winter. End of the financial year, taxpayers would seek to maximize their deductibles and be incentivized to spend more on things they don’t need. Of course, Christmas continues a tradition of compelling customers to purchase gifts for friends and family.

Infamous examples of high consumer demand come around Black Friday sales, where companies seek to offload excess inventory at lower prices, resulting in literal stampedes of bargain-hunters looking for cheap products, sometimes at the risk of their safety. 

What has changed since those days?

You guessed it, the internet.

Retail still exists. Malls haven’t gone entirely extinct. Some still seek out and enjoy the experience of going to a mall. Most of us still go to a supermarket for groceries. However, the businesses that thrive now are the ones that have capitalized on opening their doors to markets outside of their immediate community through e-commerce platforms.

People will always need to eat. But diners will take a drive-thru or go to a restaurant instead of rubbing elbows to push to the front of a queue. Uber Eats and restaurant deliveries are only becoming more prevalent, eliminating the need for people to leave their homes to seek a meal.

While there are clear pros and cons to businesses that embrace the internet, the concept of customer traffic – or periods of high trade volume still exists.

Customers no longer need to physically compete in stores with other customers to obtain a bargain sale on Black Friday. Instead, they compete to access existing stock or low prices for a limited time.

In the early days of the internet, there were not enough physical resources to facilitate the exponentially growing demand for connectivity. It was slow, expensive, and limited in capability. The internet didn’t flourish until servers became increasingly available to process more sophisticated and resource-intensive data. 

Web3 and blockchain technology have undoubtedly made advancements, but they cannot achieve greater levels of complexity with the same level of demand as today's internet.

Web1 could not advance until more efficient end-user technology made dial-up obsolete (Broadband with copper wires, fiber optic cables, to Starlink and 4G/5G) to increase their download capacity. Similarly, for Web3, blockchains need to deviate from centralized endpoints where their users compete to use the same services.

During a bear market, this may appear to be a redundant concern. Still, if we are banking on the mass adoption narrative for cryptocurrencies, we invariably require the infrastructure to handle the masses.

Cryptocurrency has had many “Black Friday” moments where black swan events created immediate demand that had paralyzed blockchains or a price aggregator like Coingecko, leading to negative consequences for investors. 

ANKR protocol touts itself as a decentralized node marketplace where users set up nodes that utilize idle computing power as part of a distributed network to host endpoints that users can tap into for their web3 activities.

While ANKR is just one in a competitive field of projects trying to plant their flag in their segment of the Web3 infrastructure market, they undoubtedly provide an essential service to DeFi protocols, blockchain consensus mechanisms, and a decentralized backend for NFTs.

In this fundamental analysis, we will seek to understand the significance of load balancers, Remote Procedural Calls (RPCs), and Application Programming Interfaces (APIs) infrastructure. Then we will briefly review ANKR’s origins and its products. To conclude, we will discuss their place in the blockchain industry to examine the proposition of $ANKR as a viable investment.