Project Name: Picasso Network
Project Type: Crosschain, Restaking.Ticker: $PICA (natively cross-chain token)
Cryptocurrency Rank: #489
Market Cap: $67.56M
Fully Diluted Valuation: $149M
Circulating Supply: 4.53B (45.34%)
Total Supply: 10B
● PROJECT OVERVIEW
Picasso, initially launched on Kusama, aimed to pioneer cross-ecosystem Inter-Blockchain Communication (IBC) and cultivate a robust ecosystem within Polkadot. Concurrently, Composable Cosmos was developed to extend asset transfer capabilities beyond the Polkadot realm.
Composable Cosmos emerged to streamline the establishment of IBC links with Cosmos chains, which was previously a complex and time-intensive task. It acts as a bridge, enabling Cosmos chains to quickly participate in cross-ecosystem IBC without needing upgrades or modifications.
This chain is designed to be compatible with any IBC-enabled Cosmos chain using Tendermint consensus, along with integration to Picasso and Ethereum, thereby functioning as an IBC hub. This chain focuses on governance, without hosting user-facing activities, and uses PICA, the native token of Picasso, instead of having its own token.
A notable feature of Composable Cosmos is its validator set, capped at 100. The Composable Foundation plays a vital role here, delegating PICA tokens from Picasso for validator staking and reward purposes.
In this ecosystem, Picasso serves as a foundational element for growth, leveraging its native token, PICA, across both the Picasso Parachain in Kusama and the Composable Cosmos Chain in Cosmos.
This research delves into the current state of the project, particularly its expansion efforts to integrate with other ecosystems like Ethereum and Solana. A key focus is on the emerging interest in Picasso’s new feature — Restaking on Solana, facilitated through the Picasso-Solana IBC connection. This development signifies a critical step in enhancing cross-chain interactions and broadening the reach and utility of PICA in the evolving blockchain landscape. Recently, Picasso announced that SOL restaking will be going live on January 28.
● PICASSO AND SOLANA IBC CONNECTION
- At the last Solana Breakpoint conference, a significant collaboration between The Composable Foundation and the University of Lisbon was showcased. They unveiled their advancements in integrating Solana with the IBC Protocol, a feat previously deemed technically challenging. The highlights of this breakthrough include:
- Integration of Solana with IBC: Powered by Picasso, this integration allows Solana to join an expansive cross-ecosystem IBC hub that includes Polkadot, Kusama, Cosmos, and soon, Ethereum.
- Enabling New Applications: With this launch, innovative applications such as restaking become feasible within the interconnected ecosystems. This functionality brings new opportunities for token utility and engagement across different blockchain networks.
- Seamless Liquidity Flow: The integration promises a fluid exchange of Solana’s substantial user base and liquidity with other chains in the IBC network.
Technical Aspects:
- Guest Blockchain Solution: To overcome the technical barriers faced by blockchains like NEAR, Solana, and TRON, which don’t naturally align with IBC’s standards (like the ICS-23 specification), a cutting-edge guest blockchain solution has been implemented. Deployed directly on Solana, it incorporates provable storage and paves the way for IBC-based interactions, enabling trustless bridges to chains that are not inherently compatible with the IBC.
- Validator Participation Mechanism: For those aspiring to become validators on this guest blockchain, a staking process with the overseeing guest contract is required. Successful stakers enter a pool of candidate validators. With each epoch transition, the contract selects new validators from this pool, prioritising those with the highest stakes.
● PICASSO INTRODUCES RESTAKING ON SOLANA
Restaking, a concept initially pioneered by EigenLayer for Ethereum’s ETH, involves using staked assets in additional financial activities while they remain staked. This method, already popular in the Ethereum ecosystem due to its ability to leverage assets more efficiently, shows significant promise for expansion into other networks with strong staking cultures, such as Solana.
In Solana’s realm, Picasso is set to revolutionise this space by facilitating the staking of Solana’s native token, SOL, and the restaking of receipt tokens from various SOL staking platforms. This will be achieved through validators connected to the Solana-IBC bridge, marking a significant integration.
The restaking process will be accessible via trustless.zone, where users can deposit their assets into staking contracts. These assets are then allocated to validators on a specially constructed guest blockchain, designed to bridge the gap between IBC and Solana. This innovative approach to restaking not only contributes to the support of the guest blockchain through the PoS mechanism but also enhances the security of the Solana-IBC connection.
Picasso is broadening its scope to include a diverse array of tokens in its Solana-IBC validators’ portfolio. The anticipated line-up includes SOL, mSOL from Marinade Finance, jitoSOL by Lito, Orca LP Tokens, and bSOL from Solblaze, marking a significant expansion in the staking options available to users.
Currently, the Solana <> IBC initiative is undergoing rigorous third-party security audits to ensure its robustness and safety and upon completion, the audit results will be made publicly available, providing transparency and assurance to the community and stakeholders involved.
● TOKENOMICS
Market Cap: $67.56M
Fully Diluted Valuation: $149M
Circulating Supply: 4.53B (45.34%)
Total Supply: 10B
TOKEN ALLOCATION:
Crowdloan: 30% Total (18.1% Unlocked, 11.9% Locked)
– Details: 50% at TGE, rest over 48 weeks. Full balance for governance; unclaimed to treasury after 3 months.
Treasury: 18% Total (-/-)
– Details: Funded by 75% of network fees, governed by General Council and later PICA holders.
Liquidity Mining: 15% Total (-/-)
– Details: Rewards for Liquidity Programs participation.
Team: 13.7% Total (Fully Locked)
– Details: Allocation over two years with six-month initial lock.
Ecosystem: 10% Total (-/-)
– Details: Rewards for network activities, like running an oracle.
Series A: 7% Total (Fully Locked)
– Details: 3-month lock-up, 2 years vesting.
Partners & Advisors: 6.35% Total (Fully Locked)
– Details: Distributed over 2 years with a 6-month lock.
VESTING SCHEDULE
Source: Cryptorank.io
UPCOMING UNLOCK EVENTS
From January to December 2024, PICA will undergo a series of token unlocks, impacting its total supply and market capitalization. The pattern includes:
– Regular Crowdloan Unlocks: Almost weekly, 31.26 million tokens (approximately 0.31% of total supply) are unlocked. These consistent releases are intended to support crowdloan participants.
– Larger Unlocks for Key Rounds: On several occasions throughout the year, notably larger unlocks occur, each releasing 108 million tokens (around 1.08% of total supply). These are divided among various stakeholders:
● Team: Part of the Team’s allocation is released, reflecting their ongoing contribution to the project.
● Series A: Investors from the Series A round see their investments unlocked, indicating their early support.
● Partners & Advisors: This group, crucial for strategic guidance and partnerships, also receives a portion.
TOKEN USE CASES
In the Picasso and Composable Cosmos ecosystems, the PICA token plays a crucial role across various functions:
- Collator Staking on Picasso: 25% of Picasso fees go to collators for block production, with the rest to the community-governed treasury.
- Oracle Staking with Apollo: Enables running an oracle node on Picasso through PICA staking, enhancing network data security.
- Composable Cosmos Staking: PICA secures the Composable Cosmos chain, marking its dual utility in Kusama and Cosmos ecosystems. The network leverages 1 billion PICA tokens for validator staking, providing network security and a ~10% APR.
- Polkadot Liquid Staking: Composable introduces Liquid Staked DOT (LSDOT), generating revenue for PICA holders through liquid staking fees.
- Gas Token in Picasso Ecosystem: PICA facilitates transactions and dApp operations, with dynamic fee adjustments based on network load.
- Primary Pairing on Pablo DEX: PICA is a primary trading pair on Pablo, Picasso’s DEX, incentivizing liquidity.
- Governance: Integral in governing Picasso and Composable Cosmos, PICA supports decentralised decision-making.
● FUNDRAISING
- Seed Round (July 2021): Composable’s seed round closed with a raise of $7 million, a crucial initial step in their financial journey.
- Series A Round (March 2022): This round marked a major leap, raising over $32 million. Esteemed participants included Coinbase Ventures, Blockchain Capital, Figment Capital, Fundamental Labs, GSR, Jump Capital, New Form Capital, NGC Ventures, and Krypto Ventures, reflecting strong investor confidence.
Moreover, Composable has recently formed two strategic partnerships to bolster its capabilities and promote ecosystem-agnostic growth: DAO5 and Santiago Santos.
About DAO5: DAO5 is a developing cryptocurrency fund moving towards a DAO structure, aimed at collaborative asset management by portfolio founders. Led by key crypto leaders like Tekin Salimi and others, it’s supported by several advisors, as listed on their website.
About Santiago Santos: Santiago R. Santos is a prominent expert in finance and crypto, known for his significant contributions to investment firms and his role as an influential voice in the crypto world, providing key insights on industry trends. He co-hosts The Empire Podcast with Blockworks’ Jason Yanowitz.
● STATISTICS
At 23/01/2024:
After a quick review of the statistics, it’s evident that while not outstanding, the network is active, averaging over 500 transactions daily with an average transfer size of $1.7k. It will be interesting to observe changes in these metrics following the integrations with Solana and Ethereum.
● CURRENT INTEGRATIONS
Picasso has achieved interoperability with the ecosystems listed below, enabling seamless data transfer, asset movement, and smart contract interactions between Picasso and these ecosystems:
Source: Picasso Asset List
● BULLISH FUNDAMENTAL FACTORS
- As Solana integrates with Polkadot, Cosmos, Kusama, and Ethereum through IBC, these connections are set to enhance the value of the $PICA token for holders, positioning PICA at the heart of a growing inter-chain landscape.
- Strong collaborations and successful funding rounds, including a $7 million seed and a $32 million Series A round, reflect robust investor confidence and strategic networking.
- PICA’s multifaceted role in staking, governance, and liquidity across ecosystems enhances its intrinsic value and appeal.
- The team’s ongoing efforts to explore new functionalities, particularly in interoperability and trustless DeFi, demonstrate a commitment to evolving and adapting to the blockchain sector’s needs.
● BEARISH FUNDAMENTAL FACTORS
- The project’s utilities and technicalities may be too complex for new and average users, potentially leading to lower engagement. This risk increases if competitors introduce similar but more user-friendly functionalities. While there are no current projects on SOL re-staking, this market is likely to attract competitors soon.
- Mismanagement of unclaimed $PICA tokens from crowdloan contributors, primarily due to poor communication about claiming deadlines, has led to dissatisfaction among contributors. The community’s push in Picasso’s OpenGov forum to reverse the decision to allocate these tokens to the Treasury is a key issue that will impact the project’s community relations stance.
- CEO Omar Zaki’s past encounters with the U.S. SEC and links to controversial projects like Bribe Protocol present reputational challenges. This issue was significant enough to prompt the departure of key team members including the former CTO Karel Kebab.
- Anticipated heavy token unlocks are expected to exert significant downward pressure on the market.
● References
Picasso Protocol (n.d.). Picasso Protocol . Picasso. Retrieved January 23, 2024, from: https://picasso.xyz/
Picasso X Account. (n.d.). Picasso — Company Socials. Retrieved January 23, 2024: https://twitter.com/Picasso_Network
Composable Finance (n.d.). stats.composable.finance — Retrieved January 23, 2024, from: https://www.composable.finance/
Picasso Statistics. (n.d.). Picasso — Company Socials. Retrieved January 23, 2024: https://stats.composable.finance/d/b7ec4077-af14-4ac9-8abc-327ce6adecb3/composable-finance-stats-v1-1?orgId=1&refresh=1h&from=now-30d&to=now
Picasso Documents and tokenomics: https://docs.composable.finance/networks/picasso-parachain-overview/
Picasso medium page: https://medium.com/@Picasso_Network
Picasso Vesting Schedule and Unlock Events: https://cryptorank.io/price/picasso/vesting
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