Sorry, this post is LONG. But I try to be thorough in my research and would appreciate any help/feedback from others doing extensive research on current/upcoming projects? If you don’t like long posts, please feel free to blow this one off. Ha ha!!
I am just an armchair researcher trying to decide when/where to invest my money. Like a lot of people who aren’t VC’s, I need to be very careful about where I invest because it could have a significant impact on me personally. In my time in the crypto space, I have been scammed, rugged, and participated in multiple projects that ended up dying a slow death from no usage. Now, I try to do as much research on a project/team as I can ahead of time to increase my chances of success.
One part of my research that I struggle with is Github analytics, and how to use the data there to help me decide if/when to invest. I’m going to use Sonic as an example, only because it is the most recent project I was researching, and it is relevant to this community at this time.
These are just my own personal notes/article I write to myself to determine if I should invest. This is not financial advice for anyone else. Do your own research, which is what I’m trying to do.
With that out of the way, can any Github experts out there tell me if I’m looking at this data correctly? Or if I’m making incorrect assumptions that I shouldn’t be? Posted below are the things I considered when looking at the Sonic project and their Github:
On May 2nd, 2023 Sonic announced their proposal for a decentralization sale at Upcoming Sonic SNS decentralization sale.
On May 8th, 2023 Sonic announced it was now open source due to community feedback. Sonic is now Open-source The Github repo is at Sonic · GitHub
As of today May 16th, 2023, Sonic has 4 contributors and 7 repositories. These 4 people are each a “Member of Sonic”, so I assume they are official developers of the project.
Out of the 7 repositories, 4 are forks from other projects. I’m assuming here that the Sonic team will not be primarily responsible for updating the code base for these forks, as they would be managed by the original project it was forked from? These 4 forks are, orderbook-rs (last updated was 5 years ago), sonic-js (last updated July of 2022), zkWasm (last updated a month ago), and ic-web3 (last updated 3 weeks ago).
When I go to the sonic-js github page, it says “The library is currently under a Beta version. It still a work in progress and can have braking changes through the new version releases.” This did not boost my confidence in the current stability of the Sonic code base. Why was this forked and not brought into the official Sonic Github? Is this common? Again, I am not a Github expert so I may be reading into this too much.
Moving onto the 3 repositories in the official Sonic Github.
First is the Artemis repository which “simplifies the process of integrating all Internet computer wallets”. This sounds like a good thing to me and would be wonderful, but it doesn’t look like it is actually functioning at the moment? When I go to the current Sonic dapp, the only wallet option is Plug. This repository was created in the official Sonic Github on January 8th 2023 and has about 50 total commits by 4 people. 46 of those commits were done by official members of the Sonic team. 10 of those commits were done within the last month, by one member.
Second is the sonic-app repository. From the Readme, this is the main application. Looking at the contributors, the top three contributors have not done a lot of development on the project for quite a long time. The only contributor (to the main branch) since November of 2022 was one official member of the Sonic team, and they submitted 78 commits. Should I be focusing on the main branch, dev branch, or all the branches? I would think main tells the most, but maybe not?
Looking at the 6 active branches, 2 of them are ahead of the main branch. One of them is 9 commits ahead, the other is 1 commit ahead. I am assuming this means those two branches are waiting to be merged into main? Those two branches have had updates within the last week. All 10 of those commits were created by the same single Sonic team member doing most of the updates to the Artemis repository. The other 4 active branches are anywhere from 64 to 76 commits behind the main branch. I assume the branches that are super far behind probably aren’t being actively used anymore?
Third is the sonic-v1 repository. This repository appears to have been created on April 30th, 2023 (about two weeks ago.) There is one contributor who is an official member of Sonic team. There is no Readme so I’m not really sure what this repository does. It says there have been 27 total commits by two authors, but the authors are actually the same person based on their name.
This is where I ended my look at the Github. If there are any incorrect assumptions I made, or if I looked at the data wrong, please let me know.
If you want to see what else I looked at when researching Sonic, keep reading. Maybe someone else will find this useful. If you just care about Github and giving me advice about interpreting the numbers, thank you in advance for any feedback/help!
Taking all of the Github data, I went back to the post about the SNS proposal. (Everything below is just more info I gathered about Sonic to cross reference with their post and Github data.)
The Twitter is active, which is a good sign.
Discord has 17k members, and I was able to verify and gain access. I don’t know how many moderators they have, but the community seems active. The last pinned message in the general chat channel is over a year old. Everything seems good here.
The Medium page has the most recent article pinned and is from March 28th, 2023. The one prior to that is from February 12th, 2023. Prior to that is a post from July 28th, 2022. That’s a pretty big gap for Medium articles about an active project, in my opinion.
The Team page in the white paper says the team is made up of 5 people total. None of them have links to LinkedIn profile or something similar. This is always a red flag to me. It seems like a lot of investors don’t mind giving money to people who aren’t willing to say who they are. I don’t have money to burn, so I am always leery of investing in projects with ghost founders. If I get rugged after giving money to a project with unknown founders, that’s on me.
The analytics from the web site say the app is doing a few thousand USD per day in volume.
Sonic is trying to raise between $2 million to $4 million through the SNS based on one ICP worth about $5.25 USD.
Things that need work/clarification and made me hesitate.
My understanding of the purpose of an SNS is to provide decentralized governance to a project. From the SNS proposal post, Sonic said
“Our decision to pursue an SNS sale now is a strategic move to accelerate the development and growth of our platform.”
So this SNS is to fund the project, with a side benefit of governance.
Sonic said
“We avoid using forked repositories that lack maintenance and use widely adopted, well-reviewed components.”
But one of the forked repositories hasn’t been updated in 5 years.
The token distribution doesn’t seem crazy to me. If the team of 5 gets 14.5% of the initial sale, that means they’ll get around $300k - $600k in SOC. That’s $60k - $120k per team member if they were able to sell it all for USD, which doesn’t seem likely. I think I read there is a 4 year lock on the funds that go to founders, but couldn’t find it. Since these numbers don’t look crazy big, I didn’t dig deeper.
There is a lot of “trust us” language in the posts on the Dfinity forum. The information may be true, but it’s hard to verify some of it. Some examples.:
“As an organization, we take regulatory compliance very seriously and are actively monitoring developments in the regulatory environment for synthetic assets.”
And
“We will continue to work with legal counsel and regulatory authorities to ensure compliance with applicable laws and regulations.”
But there is no one with a legal background on the team. It would be helpful to know what firms have they consulted with, or have on retainer? Have they spoke to any legal firms specializing in DAOs? In which countries? The words “regulation” and “legal” do not appear anywhere in the white paper.
“All types of Sonic V1 transactions are handled by the swap canister (3xwpq-ziaaa-aaaah-qcn4a-cai). The canister has three main logical components.”
“Sonic will be decentralised with all our codes are deployed in canisters, the canister details are shown below
3xwpq-ziaaa-aaaah-qcn4a-cai (sonic swap)
eukbz-7iaaa-aaaah-ac5tq-cai (sonic frontend,https://app.sonic.ooo/ 1 )
fxgi7-lqaaa-aaaah-ac5va-cai (sonic analytics, https://data.sonic.ooo/ 2)
utozz-siaaa-aaaam-qaaxq-cai (wicp)
aanaa-xaaaa-aaaah-aaeiq-cai (xtc)”
These canisters and the reference to Sonic V1 look like the code in the sonic-v1 repository, which looks like it was created two weeks ago. This is where my lack of Github knowledge might be steering me in the wrong direction. But if one team member created this 2 weeks ago and it’s going to go live, that’s a bit scary to me. Maybe because I’m not a developer?
“Sonic’s strategic roadmap and overarching vision elucidate the platform’s considerable growth potential.”
This sentence here made me feel the team is a little out of touch with the investor base. I don’t think I’ve ever seen the word elucidate used in recent history. Great word, but wrong audience to use it on? I have a BA degree focused on professional writing and had to look this up as a reminder. This reply is essentially saying “our roadmap and vision make growth potential clear”. This is obviously not true for everyone because people are asking questions.
“Allow me to assure you that our valuation is both justifiable and consistent with prevailing industry standards. Sonic’s development team possesses extensive experience and expertise”
All this is saying is “trust us.” If you want trust, throw out some LinkedIn profiles or other data that can be verified.
“As some of you may be aware, our team is currently in the process of making significant architectural changes to Sonic.”
And
“For this reason, we have made the strategic decision to postpone the security audit until the new architecture is finalized.”
Totally understandable and a sound business decision. So this just reiterates this is a fund raise, with governance as a side benefit.
“As an experienced investor, I have occasionally encountered investment opportunities where the valuation exceeded my comfort threshold. In such instances, I have elected to exercise patience and await a valuation that aligns with my investment criteria before initiating a position. Alternatively, I have employed a dollar-cost averaging strategy to mitigate valuation risk. I would respectfully suggest that you consider adopting a similar approach in evaluating your potential investment in Sonic’s SNS.
Lastly, we would like to emphasize the importance of prudent risk management. We encourage all prospective investors to allocate capital judiciously and invest only what they can afford to lose.”
This was amazing advice from Sonic. I appreciate their candor here and was able to make a decision.