BAT is the Basic Attention Token, which Brave aims to make the new standard for online attention and disrupt the online advertising industry. It is an ambitious project, and here I give a fundamental overview, as well as provide technical analysis.
According to Crunchbase, Brave raised two seed rounds totaling $7 million — first in 2015 and again in 2016 — to fund initial development. The Founders Fund led the raise, with contributions from common crypto funds Digital Currency Group and Pantera Capital. The ICO for the Basic Attention Token raised $35 million in thirty seconds, and received criticism due to selling many tokens to very few individuals.
Only around 130 people were able to buy the tokens today, with five buyers scooping up about half of the supply. The top 20 addresses in the token sale control more than two-thirds of all BAT, according to Joseph Lee, founder Magnr bitcoin exchange, who conducted a post-sale analysis.
Today, 1 billion of 1.5 billion total supply is circulating. 200 million BAT are reserved for Brave, and 300 million BAT are reserved for the User Growth Pool.
According to Bit Info Charts, there are between 500 and 2,500 transactions per day, aside from a couple of spikes in December and January beyond 5,000.
Etherscan lists more than 50,000 active addresses now.
BAT is most frequently traded on Binance, followed by Bittrex and Upbit — all using the BTC pair, though there is significant trade volume across exchanges on the ETH pair as well. All time average trading volume per day is around $8.5 million — though February had very low volume, which in recent days has upticked significantly, back above $10m; BAT’s highest volume days were in early January with $40-87m per day.
Fundamentally, the risk for BAT is if it is only used by Brave. If it can truly become an “attention token” that helps replace ads as a means of revenue generation online, the potential is huge. And while now I consider it more a dApp than a platform — it has great potential.
I’ve used the Brave browser for months now as my primary browser, with few complaints — though I did have to tweak some default settings to match my aesthetic preferences.
Brave does a nice job with security, which includes both script and ad blocking by default. The browser is Blink based (a WebKit/WebCore fork that powers Chromium) and operates as one would expect under the rendering engine that is so commonly used.
User Growth Pool, and Brave Payments
According to the whitepaper, the 300 million BAT for the user growth pool will be used to incentivize usage of the token for users. This process has begun with referral programs.
User growth fund is used to incentivize users to participate in the BAT ecosystem.
- A 300 million endowment is for early adopters of Brave and the BAT at up to 5BAT/user.
- BAT received as a reward can only be used within the BAT ecosystem for value added services.
- Unused BAT after 6 months will be sent back to the user growth fund which can then be used for new users.
- Existing Brave users can get tokens by updating their app and verifying phone number.
- No new tokens will be created once the user growth pool is exhausted.
The referral programs incentivizes publishers to both list their publications, and earn BAT for referring others to use Brave.
Verified publications also show up in the Brave Payments settings page, and Brave users can select whether to include those publications in the distribution of the Brave in their browser-based wallet.
Supported publication types now are YouTube, Twitch, and personal websites (I used the WordPress plugin to submit Ledger Status).
If publishers verify their properties, they can refer others (my ref link) to download and use Brave, and receive $5 worth of BAT per user they refer, so long as the user is, “minimally active across a 30 day period.”
Unfortunately, BAT earned via the User Growth Pool expires if not claimed. The whitepaper states a six month window, but the BAT FAQs state only a 90 day window. Unclaimed BAT would go back into the pool; once the pool is used up, the program would end.
Risks and potential for BAT
The primary risks I see for BAT are three-fold:
- The advertising industry is entrenched, and this will need to be led by a groundswell of users
- The token needs to be integrated more broadly amongst other apps, not just led by Brave
- Browser battles are hard fought, and Chrome is mighty
The referral program appears to be working. The initial bounties announced have been worth $1m each. That they have targeted YouTube and Twitch is great, especially as YouTube is infamous for giving content creators the short end of the stick. The promise of a few bucks is enough to incentivize a lot of content creators to promote the browser to their large audiences.
With this promotion, Brave expects to increase its user base, which recently passed 1.4 million monthly active users. The growth of users and publishers adopting Brave continues to drive greater utility for the Basic Attention Token platform.
Brave also aims to create an ecosystem of users who can automatically and anonymously support their favorite content providers by using the Brave browser and its integrated Brave Payments wallet. Users can load that wallet by purchasing BAT or by benefiting from various promotional BAT giveaways, such as our recent up to Million Dollar giveaway that resulted in 175,000 user grants.
While Firefox had its day, browser wars are hard fought; Chrome is a mighty power with Google’s backing. And Safari and Edge aren’t small either. Getting someone to switch browsers is a demanding task. The advantages of Brave need to be very clear to help convince average users to switch — enabling a significantly sized user base to actually use the attention token.
The downside potential is that Brave languishes as an obscure browser, and without a network of other apps using BAT, the token would fall by the wayside as another failed attempt at disrupting online ads — like many attempts before.
The upside is massive, if the token can create a sort of standard for online attention. There is as much anti-tracking and anti-ad sentiment as there has ever been, but such efforts require a lot of education of the broader public. This effort will take decades, and will require privacy becoming more important to the broader public. Brave (and other BAT apps) could benefit greatly in such a scenario that offers an alternative revenue generation mechanism that favors privacy and rewards attention.
The information in this post should not be construed as investment advice, it is purely educational material and you should always do your own research before buying.
I purchased BAT, which I bagheld once before but managed to sell for a small profit eventually, and now I’m back in.
BAT has maintained an important horizontal support line that broke in mid-October, and led to a greater than 70% drop in BTC-relative price that it didn’t recover from until January 1, 2018. It topped out just above 6700 sats and has since retraced back to that significant horizontal level, which also happens to be the .618 fibonacci level — a common area for support.
The retrace has also taken the shape of a falling wedge, a chart pattern than can signify reversal if broken upwards. The RSI shows a similar wedge, and shows the pattern having already broken upward.
The Stoch RSI — an oscillator that signals momentum for an asset — has been condensing in swings and turned up from a bottom.
The Ichimoku Cloud using doubled settings highlights a mostly bearish setup, with price below the cloud, facing resistance at both the Tenkan and Cloud bottom. The only non-bearish signal is that the cloud is green. A break into the cloud and above the Tenkan would coincide with a break of the wedge and be a bullish sign for reversal.
Bollinger Bands on the daily timeframe also indicate a bounce of the bottom band, and possible upcoming daily close above the midline.
The six hour timeframe shows a bullish divergence between price and RSI, where price has made a lower low and RSI has made a higher low. The positive reaction off this divergence shows a possible break up of the wedge, and could propel the move.
A safer entry would be to wait for a daily close that shows a breakout of the descending wedge with a purchase on the retest of said downward wedge.
Fundamentally, BAT has a lot going for it right now. The success so far of the rewards programs and public sentiment toward ad tracking give Brave and BAT opportunity for adoption.
If you would like to try Brave, you could consider my referral link, and I would receive BAT as a reward, per their User Growth Pool program I described above.
Technical analysis indicates a bullish reversal is in store for BAT, though it remains subject to the volatility and indecision of bitcoin as bitcoin approaches its downtrend resistance line. It would be prudent to consider risks for trading alt coins both in the case of bitcoin breaking the downward trend with high velocity, or being rejected from the trend.
Disclosure: As noted in the post, I have purchased BAT tokens and am a participating publisher in their program. I have no formal affiliation with BAT or Brave and this is NOT a sponsored post in any way. I just wanted to write about the token I researched.