Interview with Joe Vezzani, CEO of LunarCRUSH
By Daniel Dal Bello, Director.
September 21, 2020 – 7 min read.
LunarCRUSH is a platform to help investors in cryptocurrency markets make better decisions. The firm displays aggregated price data as well as market insights and key metrics using crypto-specific machine learning for over 2,000 crypto-assets. Their various dashboards and apps analyze data to provide a range of key social and proprietary indicators.
In this post we share a conversation with Joe Vezzani about the origins of LunarCRUSH, the relevance of social engagement in the crypto-markets, and LunarCRUSH’s own proprietary ranking indicators.
Daniel Dal Bello
Joe, can you start by telling me about your background and journey into the blockchain world? How did you get started?
Like many others. I found Bitcoin in 2015 when my now co-founder Jon and I were working together at an ad agency. It was a, “Do you have any Bitcoin?” moment. From there our conversations about cryptocurrency started happening more frequently and more in-depth. After a year or so of investing, learning, and evangelizing to our own networks, we started to get a lot of the same questions from our friends. How do you know if any of these are worth it? How do you know which ones have value?
Being trader’s first we ran into the same problems as the rest of the market. Scouring Twitter, Reddit, YouTube, and news for as much data and research as possible. We realized there was no simple way to understand the communities behind each of these projects at a glance anywhere.
“We realized there was no simple way to understand the communities behind each of these projects at a glance anywhere.”
Conversation online drives adoption and drives value in our space, much more so than other financial markets. So we thought, let’s try and pull and organize this data together in a way that makes sense to ourselves and then maybe it could be something the broader market and community would enjoy. We formalized LunarCRUSH in June of 2018 and really started to find our place in the industry starting in 2020.
Daniel Dal Bello
I think you’ve created something that fits into a really relevant niche specific to the crypto-markets which is sentiment and social engagement.
How would you describe what the business does and what motivated you to create a ‘social listening’ platform?
I touched on this with my journey into crypto. In 2017 when the ICO boom hit we would find ourselves as investors scrambling to understand all of the new entrants into the market. You end up trying to tease out data from prominent individuals in the space on your Twitter feed or obscure articles shared on some distant crypto blog. What you end up with is only a very small slice of the valuable data available. You also have no real way to understand the size of the signal happening in the conversations online. A human can not possibly sift through the over 300,000 pieces of crypto-specific content shared across the internet everyday.
In short, LunarCRUSH is a social listening platform helping investors understand cryptocurrency communities over time. Investors need to understand it’s impossible to understand true value by drawing lines on a funky chart, fundamentals in our industry looks like adoption and conversation happening online.
“Investors need to understand it’s impossible to understand true value by drawing lines on a funky chart, fundamentals in our industry looks like adoption and conversation happening online.”
Daniel Dal Bello
How correlated is the relationship between social media sentiment engagement and price action of crypto-assets?
At times, a direct 100% correlation between social activity and price action happens. Other times there is a 0% correlation and price action creates social activity. Whether you are a long-term holder or trigger-happy trader, you need to be paying close attention to conversations and communities online or you are missing a big piece of the puzzle.
Daniel Dal Bello
One of the first things you notice on the Cryptocurrency Activity dashboard is the ‘GALAXY SCORE’ and ‘ALTRANK’. What are these and what insight do they give us?
I’ve started to realize the best way to explain our proprietary metrics is through running. When you run, you are either competing against yourself for a better time, or competing against a group of people.
At LunarCRUSH we aggregate social and market data and have over 20 metrics people can sift through. We wanted to combine these metrics into scores that can take some of the guesswork out.
GALAXY SCORE is a project racing against itself. With the score going from 0-100, we take things like total social mentions across Twitter/Reddit/YouTube/news along with moving average type indicators like MACD and combine them into a score that moves constantly and in real-time.
For example, if Bitcoin is averaging 5,000 social mentions an hour and suddenly moves to 6,000 mentions an hour, that will start to drag the GALAXY SCORE up. If price starts to move upward on-top of that, our correlation rank will start to push the score up even faster. With GALAXY SCORE we are only looking at a projects performance in these categories against itself:
• Price Score: A score we derive from a moving average that gives the coin some indication of upward or downward trend based solely on the market value.
• Social Sentiment: A percentage/score of the overall bullishness or bearishness of what people are saying online.
• Social Impact: A score of the volume/interaction/impact of social to give a sense of the size of the market or awareness of the coin.
• Correlation Rank: The algorithm that determines the correlation of our social data to the coin price/volume.
Bringing it back to running. There are races against yourself and then there are races against the field. ALTRANK brings the entire cryptocurrency market together and utilizes our metrics to score the entire field. These ranks move constantly in real-time, whenever we get data, they are being re-calculated. We are not judging a project at one point in time and then walking away. Cryptocurrencies move at the speed of conversation and we need to be there for our customers who are watching every single move.
“We are not judging a project at one point in time and then walking away. Cryptocurrencies move at the speed of conversation and we need to be there for our customers who are watching every single move.”
ALTRANK brings the best of our social metrics and applies them across the entire market to rank the projects, with the best rank being #1.
• Price Change: ALTRANK compares the price performance of an altcoin relative to Bitcoin price performance. Performance is calculated over specific timeframes and updates every 5 minutes.
• Trading Volume: There’s a lot of altcoins. If there’s little trading volume, they’re incredibly hard to trade profitably and accurately. ALTRANK looks at the trading volume of each coin and ranks altcoins from highest to lowest trading activity.
• Social Volume: As we like to say, “without community there is no crypto.” Social volume is a key factor in determining if a coin has credibility. Layering in social activity from multiple channels such as Twitter, Reddit, shared links, news sources and more provides a view into the community size of an altcoin. When layering this information on top of price, ALTRANK provides some incredible results.
• Social Score: ALTRANK dives deep into social activity looking at likes, shares, comments, followers, and more across multiple social channels. This is key to determining how much engagement the community has across posted content… and if it’s from an actual human.
Daniel Dal Bello
Where does the volume data for the Exchange Activity dashboard come from? Do you do anything to vet and adjust volume declared by exchanges?
We know that it has been and still is commonplace for exchanges to overstate volume for visibility.
We have focused specifically on the social aspect and are laser oriented around the collection, organization, and cleaning of crypto-specific data and conversations coming from social media channels. We have a partnership with Nomics to provide exchange data. Between Nomics and CoinGecko, we trust their attention to detail and focus on exchange volume data.
Daniel Dal Bello
I’m curious to know more about the Influencers dashboard and in general the value of including this data in each asset’s individual page. Why have you built in the functionality to specifically see the voices that are driving engagement?
This stems back to when we first started learning about cryptocurrency. The thought leaders, executives, and community lives online. Not only is digital capital decentralized in our space, the human capital is as well, maybe more so!
In order to create more transparency and accountability in our market, we wanted to give our customers a view of the people they take advice from in a different way. Similar to what we’ve seen in the DeFi space with the ability of individuals to create vaporware and walk away with coins, influencers have created large followings and are complicit in some of this. We wanted to give our customers the ability to analyze each individual to see where their voice is pointed. By organizing data over time you can more easily figure out if an influencer you are following is simply shilling the same thing over and over, or if they are concretely analyzing and providing quality content to the market. Voices are a big part of our community and they need to be held accountable.
“By organizing data over time you can more easily figure out if an influencer you are following is simply shilling the same thing over and over, or if they are concretely analyzing and providing quality content to the market. Voices are a big part of our community and they need to be held accountable.”