Kucoin just listed ERG / USDT today and we finally have a chart for Ergo here on Tradingview.
Time to give you guys an overview of this promising altcoin.
Ergo's native Token (ERG) currently ranks at rank #169 with a market cap of around $200 million. The current circulating supply is around 32 million coins with a maximal possible supply of 97.7 million Ergo, which will be reached in pretty much 6 years from today.
With a low market cap and limited supply like that the price potential to the upside is obviously very huge, but just like with any altcoins, there is some risk involved.
Investing into altcoins is like investing into startups, they promise a lot and many will fail, but if you manage to invest into the right one, the potential gains can be tremendous. That is why it is so important to do research and not blindly buy any new coin. I spent a good amount of time looking into the project and the more I learned, the more bullish I became. Let me share you why I think this altcoin should not be overlooked.
What is Ergo?
Broadly speaking, I would say Ergo is like a technologically and economically advanced version of Bitcoin with tokens, smart contracts and a high focus on DeFi and security.
Ergo is often seen as Cardanos Oracle solution, which is true, but Ergo is primarily its own Blockchain that is independent from Cardano. They do however share a lot of similarities with each other, which complements them and leads to interoperability.
Interoperability between blockchains is key if Cryptos ever want to move on from a purely speculative assets to widely adapted currency.
Both Cardano and Ergo use a smart contracts language in the same extended UTxO model. This model allows them to use oracle pools, which has many advantages for sharing information between chains and dApps. There are already Oracles that share data between Ergo and Cardano, in the future this will help with the development of atomic swaps, cross-chain liquidity pools and more.
A big difference between the two chains is that Cardano uses the Proof of Stake consensus mechanism while Ergo uses Proof of Work.
Many believe PoS is superior over PoW, especially with Ethereum switching from PoW to PoS. But that is not necessarily true. PoW is a proven mechanism that makes attacks to the network more difficult and costly. It also results in a more decentralized network but comes with the disadvantage of higher energy consumption.
Neither system is particularly better than the other, they are just different. The interoperability between Ergo and Cardano brings the advantage for developers to have both systems available within the same ecosystem. Devs who want to build on the Cardano network but want the advantages of PoW can do so thanks to Ergo.
Its current economics and how to potentially use it to gain income:
Stablecoin and Reserve:
The unique thing about Ergos stablecoin SigUSD (pegged to the US-Dollar) is that it is backed by the reservecoin SigRSV. Everyone can mint SigRSV and provide liquidity for the stablecoin. To prevent manipulations from whales the protocol holds the reserve ratio between 400% and 800% which ensures liquidity for buyers, sellers and holders. Right now a huge amount of SigUSD was redeemed into Ergo (probably because they expect the price to rise) which caused the reserve ratio to go over 2000% the system now prevents anyone to mint new SigRSV until the ratio goes down to 800% again.
It is speculative and has some risks but in general, if the price goes up then holding SigRSV over just Ergo should result in more profit. There are spreadsheets and tools to calculate P&L for different scenarios.
Ergodex:
Currently in development with a Beta release soon. It will be an AMM but also an order book type of exchange that will function as a cross-chain exchange for both the Cardano and Ergo Network. This makes it amazing for both liquidity providers but also traders that can create orders instead of having to buy at market price with fixed prices like it is with uniswap for example.
Mining:
Ergo is already one of the most profitable coins to mine after Ethereum. Their mining algorithm Autolykos is very attractive to GPU miners. Most PoW protocols allow ASIC mining. ASICs are very powerful chips which are a lot more lucrative in mining coins compared to normal GPUs. But their manufacturing process is extremely centralised, which puts the distribution rights of hashing power into the hands of a few companies. A big problem for decentralization.
One benefit of Autolykos is that it is ASIC resistant and makes mining profitable even with cheap gaming GPUs. It also puts less strain on the cards, draws less power and generates less heat compared to other mining algorithms.
Personally I use my old gtx 1080 and a new 3070ti in my normal desktop computer to mine ergo in the background. I earn up to 1 Erg per day with the current difficulty. It is surprisingly simple to set up.
Now that Ethereum implements a mining difficulty bomb with their resent London hardfork and switches to PoS in the near future I expect that many miners will switch over to Ergo.
If you want to mine yourself, please make sure to not choose the biggest pool which unfortunately has more than 50% hashrate at the moment. A 51% attack is unlikely though. It would ruin their reputation but the risk is still there.
Nfts:
There are NFTS created on the Ergo Blockchain and there is also an auction house but I am too much of a boomer and don't really care about NFTS so I can't say much about them.
Ergomixer:
Eromixer is "the first non-interactive, non-custodial mixer in the cryptocurrency space" Which means that everyone can use it and tokens will never be hold by a custodial party. Any token that will come to the Ergo Blockchain will be able to be mixed which will create privacy and security and gives the possibility to conceal private information of transactions.
Tokenomics, distribution and why I think Ergo is still undervalued:
With everything it has to offer it still sits at a relatively low market cap. I believe this is because of how Ergo was funded.
Ergo had no pre-mine, private sales, initial coin offering or venture capital funding and the Ergo Foundation receives %4.37 of the total coins mined in the first two years and it isn’t possible to change the core elements of token economics in a further stage. When the mainnet launched during a bear market there were 0 Erg in existence.
We all have seen with ICP currently what happens if you let early donors and investors buy the token at $0.03 and then launch it during a bull market peak, creating a ton of hype, making it a top 10 coin instantly with a price of $600 that drops down to $30 in a couple weeks. What a disastrous launch that was.
But a fair start like Ergo also means less funding and money for marketing. Ergos focus isn't short term success, they want to be relevant in the years to come and that is why short term market conditions should not faze the dev team and impair the development of the project.
And up until now the token was only available on smaller exchanges like coinex that had cryptocurrency as their only deposit method. So you had to buy cryptos or stablecoins somewhere else and then send it to coinex to be able to exchange it into Ergo.
Ergo just released on the exchanges Bitcoin and Kucoin and it will be available at both Changelly exchanges as well. Kucoin means we finally have a chart here on Tradingview and Changelly will give the opportunity to buy Ergo directly via the Yoroi wallet app which people already use to buy and hold Cardano.
All things considered, when the next alt-season comes, this project and its coin has all ingredients to do well. If Ergo can reach Chainlinks market cap (Ethereums Oracle) its price would reach between $100 and $500 depending on how fast it gets there.
Can it fail? Of course! Everything is possible. Risk Reward Ratio however is pretty high if you ask me and I am more than willing to take that risk. I recommend to add Ergo to your watchlist, especially if you are bullish on Cardano.
But I am just an investor, I am obviously biased and everything I said could be wrong or be misinterpreted by me. So the obligatory do your own research and this is not financial advice applies here as well.
Time to give you guys an overview of this promising altcoin.
Ergo's native Token (ERG) currently ranks at rank #169 with a market cap of around $200 million. The current circulating supply is around 32 million coins with a maximal possible supply of 97.7 million Ergo, which will be reached in pretty much 6 years from today.
With a low market cap and limited supply like that the price potential to the upside is obviously very huge, but just like with any altcoins, there is some risk involved.
Investing into altcoins is like investing into startups, they promise a lot and many will fail, but if you manage to invest into the right one, the potential gains can be tremendous. That is why it is so important to do research and not blindly buy any new coin. I spent a good amount of time looking into the project and the more I learned, the more bullish I became. Let me share you why I think this altcoin should not be overlooked.
What is Ergo?
Broadly speaking, I would say Ergo is like a technologically and economically advanced version of Bitcoin with tokens, smart contracts and a high focus on DeFi and security.
Ergo is often seen as Cardanos Oracle solution, which is true, but Ergo is primarily its own Blockchain that is independent from Cardano. They do however share a lot of similarities with each other, which complements them and leads to interoperability.
Interoperability between blockchains is key if Cryptos ever want to move on from a purely speculative assets to widely adapted currency.
Both Cardano and Ergo use a smart contracts language in the same extended UTxO model. This model allows them to use oracle pools, which has many advantages for sharing information between chains and dApps. There are already Oracles that share data between Ergo and Cardano, in the future this will help with the development of atomic swaps, cross-chain liquidity pools and more.
A big difference between the two chains is that Cardano uses the Proof of Stake consensus mechanism while Ergo uses Proof of Work.
Many believe PoS is superior over PoW, especially with Ethereum switching from PoW to PoS. But that is not necessarily true. PoW is a proven mechanism that makes attacks to the network more difficult and costly. It also results in a more decentralized network but comes with the disadvantage of higher energy consumption.
Neither system is particularly better than the other, they are just different. The interoperability between Ergo and Cardano brings the advantage for developers to have both systems available within the same ecosystem. Devs who want to build on the Cardano network but want the advantages of PoW can do so thanks to Ergo.
Its current economics and how to potentially use it to gain income:
Stablecoin and Reserve:
The unique thing about Ergos stablecoin SigUSD (pegged to the US-Dollar) is that it is backed by the reservecoin SigRSV. Everyone can mint SigRSV and provide liquidity for the stablecoin. To prevent manipulations from whales the protocol holds the reserve ratio between 400% and 800% which ensures liquidity for buyers, sellers and holders. Right now a huge amount of SigUSD was redeemed into Ergo (probably because they expect the price to rise) which caused the reserve ratio to go over 2000% the system now prevents anyone to mint new SigRSV until the ratio goes down to 800% again.
It is speculative and has some risks but in general, if the price goes up then holding SigRSV over just Ergo should result in more profit. There are spreadsheets and tools to calculate P&L for different scenarios.
Ergodex:
Currently in development with a Beta release soon. It will be an AMM but also an order book type of exchange that will function as a cross-chain exchange for both the Cardano and Ergo Network. This makes it amazing for both liquidity providers but also traders that can create orders instead of having to buy at market price with fixed prices like it is with uniswap for example.
Mining:
Ergo is already one of the most profitable coins to mine after Ethereum. Their mining algorithm Autolykos is very attractive to GPU miners. Most PoW protocols allow ASIC mining. ASICs are very powerful chips which are a lot more lucrative in mining coins compared to normal GPUs. But their manufacturing process is extremely centralised, which puts the distribution rights of hashing power into the hands of a few companies. A big problem for decentralization.
One benefit of Autolykos is that it is ASIC resistant and makes mining profitable even with cheap gaming GPUs. It also puts less strain on the cards, draws less power and generates less heat compared to other mining algorithms.
Personally I use my old gtx 1080 and a new 3070ti in my normal desktop computer to mine ergo in the background. I earn up to 1 Erg per day with the current difficulty. It is surprisingly simple to set up.
Now that Ethereum implements a mining difficulty bomb with their resent London hardfork and switches to PoS in the near future I expect that many miners will switch over to Ergo.
If you want to mine yourself, please make sure to not choose the biggest pool which unfortunately has more than 50% hashrate at the moment. A 51% attack is unlikely though. It would ruin their reputation but the risk is still there.
Nfts:
There are NFTS created on the Ergo Blockchain and there is also an auction house but I am too much of a boomer and don't really care about NFTS so I can't say much about them.
Ergomixer:
Eromixer is "the first non-interactive, non-custodial mixer in the cryptocurrency space" Which means that everyone can use it and tokens will never be hold by a custodial party. Any token that will come to the Ergo Blockchain will be able to be mixed which will create privacy and security and gives the possibility to conceal private information of transactions.
Tokenomics, distribution and why I think Ergo is still undervalued:
With everything it has to offer it still sits at a relatively low market cap. I believe this is because of how Ergo was funded.
Ergo had no pre-mine, private sales, initial coin offering or venture capital funding and the Ergo Foundation receives %4.37 of the total coins mined in the first two years and it isn’t possible to change the core elements of token economics in a further stage. When the mainnet launched during a bear market there were 0 Erg in existence.
We all have seen with ICP currently what happens if you let early donors and investors buy the token at $0.03 and then launch it during a bull market peak, creating a ton of hype, making it a top 10 coin instantly with a price of $600 that drops down to $30 in a couple weeks. What a disastrous launch that was.
But a fair start like Ergo also means less funding and money for marketing. Ergos focus isn't short term success, they want to be relevant in the years to come and that is why short term market conditions should not faze the dev team and impair the development of the project.
And up until now the token was only available on smaller exchanges like coinex that had cryptocurrency as their only deposit method. So you had to buy cryptos or stablecoins somewhere else and then send it to coinex to be able to exchange it into Ergo.
Ergo just released on the exchanges Bitcoin and Kucoin and it will be available at both Changelly exchanges as well. Kucoin means we finally have a chart here on Tradingview and Changelly will give the opportunity to buy Ergo directly via the Yoroi wallet app which people already use to buy and hold Cardano.
All things considered, when the next alt-season comes, this project and its coin has all ingredients to do well. If Ergo can reach Chainlinks market cap (Ethereums Oracle) its price would reach between $100 and $500 depending on how fast it gets there.
Can it fail? Of course! Everything is possible. Risk Reward Ratio however is pretty high if you ask me and I am more than willing to take that risk. I recommend to add Ergo to your watchlist, especially if you are bullish on Cardano.
But I am just an investor, I am obviously biased and everything I said could be wrong or be misinterpreted by me. So the obligatory do your own research and this is not financial advice applies here as well.
Kucoins listing made the price go up quite a bit that puts Ergo at top #152 with a market cap of $312 million