Messari is an open source EDGAR database for cryptoassets. Find out how it works today in our review.
What Is Messari?
Messari is an open source informational database for cryptoassets announced in October 2017. The protocol is being created by Ryan Selkis, best known for his previous work on Consensys (and also known under the moniker TwoBitIdiot online).
Messari is similar to the idea behind Enigma and its decentralized data marketplace protocol / Catalyst platform. It’s also similar to the idea of Bloomberg or CrunchBase, in that it seeks to provide informational services that encourage self-regulation in an industry.
The goal of Messari is to solve crucial problems in the crypto industry. In an introductory post announcing Messari, Selkis described how crypto’s problems can no longer be dismissed as mere “growing pains”. He mentioned problems like the lack of transparency for big fund managers – we don’t know when big fund managers sell stakes in their positions, for example, and there are generally no lock-up periods.
Messari aims to solve these problems by creating a network – similar to the EDGAR database – specifically for cryptocurrency assets. Messari sees itself as like the Bloomberg of the cryptocurrency industry, acting as a trusted source of information.
EDGAR, for those out of the loop, is the public SEC database for securities.
What Problems Does Messari Seek To Solve?
Messari identifies several major problems in today’s cryptocurrency industry. As mentioned above, those problems cannot be dismissed as mere “growing pains” according to Messari’s creator. Some of the specific problems identified include:
Low Integrity And Transparency
Messari was founded with the belief that “radical transparency from token projects will be the very best form of regulation.” It’s impossible to individually regulate every crypto company with 100% effectiveness. Instead, the best way to regulate the entire industry is to encourage transparency. “Let people make informed decisions for themselves based on high-quality, free, public information,” explains Messari. The best companies will rise to the top, while lesser quality companies will sink.
Dispersed, Unstructured Information
Information about cryptocurrency assets is scattered across various siloes. This information is hard to verify. The information changes frequently as teams adjust the terms of their token sales and future inflation rates. Their treasury balances gyrate wildly. Every ICO is accompanied with a deluge of messy information. There’s no trusted curation source.
Creating A Centralized Service Would Be Expensive And Inefficient
Some of these problems could be solved with a centralized entity. However, Messari believes that a centralized entity like Bloomberg would be prohibitively expensive to properly curate. There’s just too much information out there for one centralized entity to sufficiently handle.
Projects Have No Incentive To Volunteer Information
Why would a company divulge key information about itself if its competitors aren’t doing the same? Companies have no incentive to share information.
There’s No Precedent On How To Manage Liquidations
Messari believes that we will see our first “reverse ICO” in 2018. A reverse ICO will take place when a team that raises money suddenly disbands because they decide to work on another project – or because they want to retire. The entity might hold tens of millions of dollars worth of crypto assets, but it’s a “zombie organization” with no liquidation procedures in place.
How Does Messari Work?
Today, Bloomberg acts as a centralized information source for the financial industry. Messari wants to create the equivalent organization for the crypto industry. However, due to some of the problems listed above (like the operational challenges and high costs of running a centralized information source), Messari will create a decentralized network that offers similar functions to the industry.
Some have described Messari as a “crypto version of CrunchBase”.
The idea is to encourage self-regulation in the industry. The crypto industry is spread around the world. No single regulation can span all companies and jurisdictions. Instead, Messari will encourage self-regulation, where companies are encouraged to maintain a certain level of transparency, and the industry regulates itself.
When Messari was first announced in October 2017, Selkis described the project as like EDGAR for tokens. EDGAR is the public SEC database for securities.
In February 2018, Messari expanded on that concept further, describing how other self-regulatory bodies have evolved over time to become significant organizations – including the Financial Industry Regulatory Authority (or FINRA) and the National Futures Association (or NFA).
One of the key parts of the Messari ecosystem will be the Messari token. Messari will use that token to encourage self-regulation.
Messari Token ICO Details
Details of the Messari ICO have not yet been announced. However, the company is expected to announce details of an ICO sometime in 2018. The ICO could happen as soon as Q2 2018.
As of February 2018, no information about the Messari ICO has been released thus far.
The Messari token will encourage self-regulation. Essentially, Messari sees itself as a token-based SRO (self regulatory organization).
There will be high intrinsic value for token issuers to list on the Messari registry because it will send a strong social signal to investors and potential business partners that theirs is a reputable project.
Tokens will also be used to incentivize curators on the Messari network. Curators will be incentivized to create tools that streamline user reporting and increase application throughout without admitting projects that fail certain compliance tests.
Messari will accept tokens as an application cost for listing on its list of approved companies (Messari calls this its “TCR”). The value of listing on the Messari will grow even as the number of admitted projects grows because application costs will decrease over time and/or more robust filing requirements will be automated.
Messari Distributed CryptoAssets EDGAR Database Library Features
Messari plans to offer the following features:
- Messari will become the single source of truth regarding the most important data on thousands of current and future cryptocurrencies, utility tokens, and tokenized securities
- Media companies, investors, decentralized app developers, and regulators will all have a tool they can reference in order to understand what is happening in a given protocol or crypto asset
- Messari will initially collect non-proprietary and non-controversial information on all of the top crypto assets (data like supply curves, annual inflation, and vested token treasury balances)
Ultimately, Messari sees itself as “the data layer for the new crypto economy”
Who’s Behind Messari?
Messari is being developed by Ryan Selkis, also known as TwoBitIdiot. He’s the former EiR of Consensus and was on the founding teams of Digital Currency Group and Coin Desk. He’s an entrepreneur and angel investor.
Messari aims to encourage self-regulation in the crypto industry by creating an informational database for the crypto industry. That database will offer similar services to Bloomberg and CrunchBase, helping provide transparency in an industry that sorely needs it – and at the same time, rewarding participants in the industry when they provide transparency. Messari also sees itself as similar to FINRA and NFA, in that both are self-regulatory organizations that have grown to play a crucial role in their respective industries.
Messari will encourage self-regulation through the use of Messari tokens. That’s why the project is being described as “a token to self-regulate tokens”.
To learn more about the project and its ongoing goals, visit Messari.io today. The company announced a token sale in February 2018.