Quant Network is a unique project in the world of crypto. It connects blockchains and other data sources by using the patented Overledger operating system. This article is the Quant Network beginner’s guide. We will go through the history of the project, the technology, and the potential of QNT tokens as an investment.
Quant is a utility token
Let’s first put Quant Network in the proper crypto category. As the title suggests, Quant is a token. But, what does this mean in practice?
We divide cryptocurrencies into three categories: currencies, platforms, and tokens. In addition to Bitcoin, currencies include other P2P currencies such as Litecoin or Monero. These currencies have no other significant features beyond storing and transferring of value.
Ethereum is the best-known platform. These are operating systems for decentralized applications (dapp). You can think of platforms like iOS or Android. Other well-known platforms are Solana, Cardano, and Avalanche.
Tokens are always created on a platform. This means they don’t have a blockchain. In practice, tokens are either governance tokens or utility tokens. For example, DeFi tokens (AAVE, Uniswap, etc.) are governance tokens whose holders have the right to vote on the development of the protocol.
Quant Network’s QNT token is a utility token. It is needed for licenses and other fees for the Overledger operating system. QNT was launched on the Ethereum blockchain, so it is a traditional ERC-20 token.
Competitors of Quant Network are Polkadot and Cosmos. All these projects are trying to create an “internet of blockchains”. However, Polkadot and Cosmos are platform-type projects. The Quant Network, on the other hand, is software that simply connects blockchains and various databases created by others.
The project is known as both Quant and Quant Network.
The history of the Quant Network
Almost every cryptocurrency project is strongly identified with one figurehead. Quant Network is no different in this matter. The project was founded by Gilbert Verdian, who is also the current CEO of Quant Network.
Verdian has over 20 years of experience in cybersecurity. He possesses one of the finest CVs you can find in the crypto industry. Gilbert Verdian’s employers have included HSBC, BP, PwC, Mastercard, and the central banks of both the UK and the United States. Below is a picture of Verdian from the Quant Network website.
Verdian was first introduced to Bitcoin back in 2009. He has also been involved in the development of the ISO TC 307 standard back in 2015. It is a joint project of 50+ countries that aims to create standards for blockchain development.
ISO TC 307 also contains interoperability standards, meaning rules for communication between blockchains. This groundwork led Gilbert Verdian to institute the Quant Network in 2017. The project was officially launched in December 2017.
At first, Quant Network did not have its own token. However, it was decided to launch an ICO six months later.
The timing was really bad, as the major ICO bubble had just burst and investors’ interest was low. The QNT token ICO raised only $11 million out of the targeted $37 million. However, QNT has rewarded the initial investors well. The token price has risen 115x in dollars and 50x against Bitcoin if you bought it at the ICO.
Quant Network has been moving forward as a project. The main developments can be roughly divided into two areas: new versions of Overledger and partnerships. You can read more about the news on the Quant website.
The main partnerships include SIA (2019). SIA is a leading European provider of payment systems and infrastructure. LACChain (2021) is leading the blockchain development in Latin America and the Caribbean. Quant’s other well-known partners include Amazon and Oracle.
At the same time, Overledger has been developed further. Version 1.0 was released in the summer of 2019, and the important version 1.5 in January 2021. In May 2021, Overledger 2.0 was released. It is built according to the ISO TC 307 standard mentioned above. The latest version of Overledger is 2.2.14, which was completed in September 2022.
Price history of the QNT token
Let’s now look at the historical development of the Quant token. As mentioned above, the QNT token originated from an ICO held in May 2018. It was available on the market a few weeks later at a price of around $0.50.
QNT rose to $3.2 in October 2018 and $4.5 in February 2019, while other cryptocurrencies were struggling in the deepest pit of the bear market. In the summer of 2019, QNT rose as high as $13 before slowly falling with the rest of the market and bottoming out in the March 2020 pandemic dip.
The spring of 2021 saw a massive boom in the crypto market. QNT rose by around 200% in February, but the price moved mostly horizontally through the spring and summer of 2021. QNT finally mooned to a new ATH of $427 in September 2021. This started a sharp decline that continued with the rest of the market. The token was down almost 90% from the ATH in June 2022.
The QNT moved against the rest of the market again in September-October 2022 and has traded above $200 at its highest. This translates to a move of almost 5x since the June dip.
Looking at the price history, it is evident that QNT behaves a bit differently than an average cryptocurrency. It has made many ups and downs against the general trend of the market. Big trends have also weighed on QNT’s price, but it is clearly able to make moves against the market.
Overledger operating system
Next, let’s look at Quant Network’s technology. The beating heart is the Overledger operating system. It is important to understand that Overledger is not a blockchain. Though, the term virtual blockchain has been used in some cases. The Overledger OS is based on the Kubernetes technology originally developed by Google.
Since Quant Network doesn’t run its own blockchain, we cannot make typical comparisons of transaction capacity. We are also not talking about how staking works or whether it is a Proof of Work solution. The Overledger created by Quant Network is a tool for developing multi-chain applications.
Overledger can be seen as a collection of API connections to different blockchains. It enables the creation of multichain apps where smart contracts can communicate simultaneously with Bitcoin and Ethereum, for example. These are called mApps.
In addition to public blockchains, Overledger is connected to many private blockchains. An example of this is the connection to Hyperledger Fabric built in the summer of 2022. Overledger also provides API connections to other databases, IoT data, etc.
It is important o understand the target audience of Quant Network and Overledger. This is not a public blockchain designed to be a playground for millions of people. Quant Network provides an enterprise-level architecture for a fee. The Overledger OS is therefore licensed.
Just as every Windows user has to pay for an OS license when buying a computer, you also have to pay for using Overledger. There are different levels of licenses depending on your needs. The technology developed by Quant Network is also patented. In the world of cryptocurrencies, there is only a handful of closed-source software.
This article will not go into Quant Network technology in any great depth. If you want a really comprehensive information package from a technical point of view and in more detail, check out this Youtube video.
The purpose of the QNT token
Although Quant Network does not have its own blockchain, it does have a token. QNT is an ERC-20 standard coin circulating on the Ethereum network. What is the purpose of QNT?
The most common use is paying licensing fees for the Overledger operating system. Prices are in dollars (the base fee is $99 per year), but the payment is made using QNT. The coins are locked for the duration of the license fee, which is 12 months by default. There are also different license models available depending on the customer’s needs.
Another use case is the Overledger Network Marketplace.
Overledger users can purchase a range of services and connections through the marketplace. In practice, you buy access to specific blockchains or databases, or API connections, with the QNT token. Prices are also in dollars on the marketplace, but they are paid with QNT. The tokens are locked into a separate Quant Network Treasury.
QNT’s tokenomics is quite favorable for the investor. There is a based demand locking QNT tokens out of circulation. At the time of writing this article (10/2022), about 83% of all tokens are in circulation. This means there are no surprise releases in the future because of vesting periods ending.
Yet, one has to ask: why does the QNT token exist? There is a huge variety of software in the world whose license fees are paid in fiat currency. Even in the case of Quant Network, the licenses are priced in dollars.
Since Quant Network does not have its own blockchain, the whole system would work without a token. This is certainly a ‘red flag’ for many investors and potentially even introduces unnecessary regulatory risk to the project.
Quant Network as an investment
The Quant Network is a rather exceptional project in the cryptocurrency market. On YouTube, you can see a lot of videos comparing Chainlink and Quant Network. Although the projects cannot be seen as direct competitors, they have something in common as an investment target.
Let’s look at some of the pros and cons from an investor’s perspective. Let’s start with the latter.
It is very challenging for an investor to estimate the future demand for QNT tokens. The situation is different for traditional blockchains. For example, in smart contract platforms, we can estimate the number of DeFi and other apps, liquidity, number of transactions, and other activity. This is not possible with the Quant Network.
More risks come from the regulation. Quant Network is seen by many as a “foolproof” investment because of Gilbert Verdian’s background in the banking world. If you ask the SEC head Gary Gensler, all coins coming from an ICOs have broken the law. Even if Quant’s ICO was not held in the US, it could still be a problem.
Many projects such as Cardano, BNB Chain, etc. are seeking a strong decentralized status as a counter to SEC regulations. Quant is the opposite of decentralization, as the QNT token only derives its value from the actions of one company. The magnitude of this risk is difficult to assess.
In a way, buying QNT is like a blindfolded bet on the future of Quant Network Limited. Many people would probably be interested in buying shares in the company instead of a QNT token. The market cap of QNT is also quite challenging to translate to the real world.
Want a quick overview of the project? Check out the video below!
What about the pros, then?
Quant Network has undoubtedly a strong track record starting with the founder Gilbert Verdian. The company has hard-core partners and a functioning ecosystem after years of development. Quant Network also has no direct competitor – at least not in the same weight class. Chainlink does a bit of the same as an API connectivity provider, but players in the interoperability sector (Polkadot and Cosmos) are perhaps more relevant.
Quant Network does not compete in the consumer sector, preferring to focus on the business world. It does not need to compete with Solidity app developers and gain wallet users in the same way as traditional smart contract platforms. Let’s not forget multi-chain apps (mapps) either. Overledger enables a lot of things that a legacy blockchain developer can’t do.
There is also a demand for the QNT token, and its tokenomics is quite good. An investor doesn’t have to worry about inflation and the upcoming dumping by VC investors which is often the issue with brand-new tokens. If Quant Network continues to grow and develop its ecosystem, QNT’s market value will increase in the process.
QNT is also an interesting case in terms of price history. It has made a lot of moves against the crypto market. The article is written in October 2022, when QNT has risen the most among the top 100 cryptocurrencies (just over 70%). Over the same period, Bitcoin, for example, has moved down by just under 1%. QNT’s correlation with Bitcoin appears to be smaller than other altcoins.
How to buy QNT
The Quant Network can be found on the largest exchanges in the market. The best choice is the market leader Binance, where it is easy to deposit via debit card or SEPA bank transfer. Binance also offers the best liquidity at the moment.
Since QNT is an Ethereum-based token, it is supported by all major cryptocurrency wallets. Exodus, Trust Wallet, and MetaMask are free options. Ledger Nano X offers ultimate security.