Flash Report - Fetch.ai

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Fetch.ai is an ambitious project that is trying to combine the benefits of several domains—including blockchain, artificial intelligence, and machine learning. Its solution is based on autonomous software agents that work on behalf of owners and organizations. 

Although agent-based systems have been in existence for a while, current solutions mostly function on so-called “simple agents” that are working based on a predetermined set of instructions that exist in the form of a contract.

Fetch.ai is building an intelligence-driven agent system, where distributed agents will use AI and ML, learn from their environment, share the knowledge across the network, and do far more than execute simple instructions. This should significantly improve agent efficiency, and thus reduce costs and provide many other potential benefits for final users. 

For the project, 2019 was mainly a year of technological developments. The team launched a testnet in August, which was followed by the beta mainnet in September and the mainnet in December of 2019. Additionally, over the course of the last two years, the project has gone through several rounds of fundraising, including a seed, private, and Binance launchpad sale, attracting over $20M in investment. 

For Fetch, 2019 was mainly a year of development, while 2020 is a year of commercialization. Previously, the team has been laying the groundwork for real commercial integrations by building relationships with different institutions and organizations. The team has also been working on developing its own commodities exchange and implementing several other use cases.

Although the blockchain space still remains speculative, real-world deployments and integrations are what crypto investors are searching for. Fetch.ai has all the prerequisites to achieve its commercialization goals. And, given that the team is going to continue to deliver quality results, successful integrations could significantly move the project forward. 

Strengths of Fetch.ai

Industry growth is one of the critical success factors for any network. Fetch.ai is tackling markets with high growth.

Artificial intelligence and machine learning are already driving the growth of the Web 3.0 economy. According to the Grand View Research Inc, the global artificial intelligence market size is expected to reach $390B billion by 2025. From 2019 to 2025, the market is anticipated to expand at a CAGR of 46%. Similarly, the machine learning market is expected to reach $97B by 2025, with a CAGR of 44%. 

The growing market should open up plenty of opportunities for projects that deliver quality services. Fetch.ai has all the prerequisites to benefit from these growing trends. 

The project has a strong team that possesses a wealth of research experience. In terms of development activity, Fetch is one of the most active projects across all ERC-20 based assets.

The team has pioneered a novel consensus mechanism called the “minimal agency consensus protocol.” According to the team, it provides the world’s fastest, most secure decentralized ledger. A core part of the consensus is a decentralized random beacon (DRB). It relies on a multi-party computation between the entire collection of nodes to decide which node will add the next block to the chain. 

For higher scalability, PoS networks generally limit the number of nodes that participate in the consensus, which negatively affects decentralization. Fetch.ai removes technical limitations on the number of nodes that can take part in the consensus, solving the scalability issue without sacrificing decentralization.

The project’s team is also keen on business development. The CEO, Humayun Sheikh, is a founding investor in DeepMind Technologies, a UK-based artificial intelligence company founded in September 2010 and acquired by Google in 2014. The firm has solid connections across the enterprise sector in the U.K. and European Union. Given that the team is aiming to move the project to the commercialization stage in 2020, these connections could help.

The team has been very active in building partnerships.

In October 2019, the project announced a partnership with Turkish steelmakers and traders (including Baştuğ Metallurgy⁠—yearly revenue over $1B) to develop the first AI-powered decentralized metals exchange. 

In May, the project signed an MoU with T-Labs, the R&D unit of Deutsche Telekom. Fetch.ai has conducted a number of trials with the T-Labs team in mobility, smart cities, and autonomous driving. Last year, Fetch won the Smart Mobility challenge with smart car battery charging in collaboration with Bosch, T-Labs, and Share&Charge. 

Fetch.ai is also contributing towards the vision and delivery of the Dubai Decentralised Data program sponsored by Smart Dubai Data

The project is also working on smart lending and smart market-making use-cases with Grey Swan Digital (a web-based customized derivatives blockchain trading platform).

Along with IBM, Cisco, and Deutsche Telekom, Fetch is a steward of the Sovrin network, a decentralized distributed identity network.

The project is actively partnering with academic institutions to promote its blockchain platform. In March of this year, in collaboration with Cambridge University Fetch organized a blockchain conference. Besides that, Cambridge University’s Institute for Manufacturing and Fetch is developing a supply chain solution that will utilize AI multi-agent systems and Fetch blockchain. 

The project is also working with Warwick Business School to explore machine learning in energy systems. Trials showed that the autonomous agents could reduce daily energy costs at Warwick University’s student campus by 13–18%. 

On the government level, Fetch represents international blockchain industry players in the EU and contributes to the regulatory debate by supporting European decision-makers. Maria Minaricova, head of BD for Fetch.ai, is chair of the board

Additionally, Fetch is actively building its own commodities exchange, Mettalex, which aims to provide liquidity to illiquid assets. According to the team, the project is aiming to work “with a consortium of steel mills, shipping companies, trading firms, trade banks, and brokerage houses, we look forward to watching Fetch.ai’s decentralized trading platform grow to support a thriving metals trading market, with physical delivery of assets.”

Commercialization will have a direct effect on the utility and the demand for FET, Fetch.ai’s native token. The project’s partners will be obligated to stake a certain amount of tokens and will have to buy them directly from the market, which will reduce supply pressure and potentially drive up the project’s value. 

Given the current commercialization efforts, the project has an excellent chance to excel this year and grow the utility of the token and adoption of its innovative technology. 

Weaknesses

As mentioned, Fetch.ai is an ambitious project. The team is building a solution that is new to the market and has not been tested before. More than 95% of new products introduced each year fail, and the team will have to do all it takes to prove to the market that its product is sustainable in the long term. 

Commercialization is a major milestone for Fetch.ai since it should help the project start generating revenue. While the team is optimistic about the project’s profitability prospects, as with most startups, revenue forecasts are more of a thought exercise based on many assumptions rather than an exact science.

If commercialization efforts end up moving slower than expected, this can slow down the overall development of the project. 

Commercialization is also absolutely necessary to mitigate the supply pressure. According to the token inflation schedule, the current yearly inflation (from Feb. 2020 until Dec. 2020) is around 33%, which is quite high, especially given that now the demand is driven mostly by speculators. 

Overall, the risks that this project possesses are based on the still relatively low adoption of the protocol. However, given that the project has launched its mainnet not that long ago, and has established many partnerships, it is reasonable to expect commercial deployments in 2020. 

Conclusion

Given the project’s progress over the past year, Fetch.ai could be a good value play. Over the past few years, it has built a network of quality partners and is now ready to start implementing its solution in the real world. 

Moreover, the project will continue to expand the network of its partners. This will not only bring more media coverage but should drive up the utility and the demand for the token.

All of these factors should positively affect the overall public perception and value of the project going forward.

Crypto Briefing was sponsored to produce this report. However, the opinions expressed here represent our independent and authentic opinions based on our editorial guidelines.

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