The current state of Golem network

report

#1

golem

Introduction

A recent price spike (April 2018) for the Golem Network Token (GNT) caught our attention. We’ve been collecting on-chain data for a little while now, and wanted to know what the data could tell us about this price activity and the project in general.

The goal of this article is to give an overview of the Golem network as it has been working since it was released. We will show some of data that we have gathered which can shed light on the network performance in that time. Our focus is on evaluating the financial parameters of the network. We are interested in the following questions:

  1. Is it profitable to perform work on the Golem network at the moment
  2. Is it profitable to use the Golem network for computation
  3. How does the current state of the network correspond to the current value of the GNT token?

Overview of Golem

The goal of the Golem project is to provide infrastructure for renting computing power for various compute-intensive tasks. The first such task that was released is 3D rendering of Blender files.

In the Golem network there are two main actors: Requestor and Provider. The Requestor is the one who submits tasks for computation, and the providers are the ones who compute the tasks and receive payment in return.

Payments are performed on the Ethereum blockchain via the GNTB token. The GNTB token is a proxy for the GNT token which allows batch transfers. What this means is that to create GNTB tokens you must transfer an equal amount of GNT tokens, which are locked. When a GNTB token is destroyed, an equal amount of GNT tokens are transferred to the caller.

The batchTransfer call that the GNTB smart contract has, is what is used by the Requestors to pay the Providers. So one way to estimate the work that was being done by the Golem network, is to track all batchTransfer calls that are occuring on the network.

Results

Here is a graph of the total number of nodes in the Golem network since its deployment

As we can see the number of nodes is steadily increasing.

Now let us look at the transfers. Up to the present moment the total transfered amount is 4,599.93 GNT. At the current price of $0.609448 this makes $2,803.42. The tokens were transferred from 38 different addresses. Here is the distribution of tokens per Requestor address:

We can see that a small number of requestors have distributed all the tokens. This seems quite normal, especially at the start of the network.

Next let’s take a look at the providers. There were totally 1,466 different providers who received any tokens. Here the distribution is much more even:

And here is a histogram - i.e. how many providers received a given amount of tokens:

At the current price, the average amount received by a provider that did receive anything is $1.91

Conclusion

On first impression it does not seem very profitable to be a provider at the moment. There are too many providers and not enough requestors submitting jobs. It is quite probable that most providers will not be able to cover their electricity costs for being part of the network.

On the other hand the current market provides a good opportunity for Requestors to use the Golem Network for rendering tasks. Whether they choose to use it or not depends on the cost of using the network compared to other rendering solutions. We do not have data to make any conclusions in that regard.

Also the activity on the Golem network at the moment is too insignificant to influence the GNT price in any way. According to Coinmarketcap current Market cap for GNT is $508,439,307 with 24-hour volume of $14,739,200. Compare this with the total volume of the network which was just $2,803.42. The recent spike in GNT price which occured at the announcement of the deployment of the first version of the network is therefore purely speculative. The computational activity of the Golem Network will have to grow several orders of magnitude before the current GNT price is justified.

Links

You can look at the raw data used for this report here:

Acknowledgements

The following people worked on this report:


#2

Here are some “insights” from the on-chain data.

As you can see here, there is a pretty exact correlation between price spikes and the movements of the tokens on-chain.
The possible interpretation here could be.

  1. Someone moved a lot of tokens (first, “red” arrow) to the exchange with the intention to sell.
  2. That was bought out as some others were accumulating. As the accumulation was finished and the tokens have been moved out of the exchange(s) (the second “green” arrow) - the price started to decline. There was no more real buying power left.

Here is insight is the following. The amount of “speculation participants” has dropped to the previous level now. Price could follow down a bit more. Once we see the “spikes” in the “network speculation activity” - we might see the price to start recovering.

Some of this data is public on our SANbase (daily active addresses, for instance), where the rest can be accessed in our closed beta only at the moment.


#3

We are continuing to watch the Golem project and were able to spot an unusually big transfer of GNTB tokens through the contract they use for payments.
Here you can see that 219,000 tokens for more than $114,000 at the current price of $0.5226 have been transferred: Ethereum Transaction 0xc87fc1d7dd78b13ec1e913dd012219eb7d0e59e28f14497dd20d46ad21d6451f