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Basic Attention Token (BAT) is an Ethereum-based token that works within the free, privacy-focused Brave Browser web browser that has over 35 million monthly active users as of October 2021. BRAVE focuses on blocking ads and website trackers while also emphasizing data privacy and allowing users to get paid in BAT for their attention and ad-viewing. The BAT token’s primary use case is to serve as the incentive mechanism and medium of exchange (MoE) that rewards users, websites, publishers, and content creators without relying on the current default method of surveillance capitalism. The design of the BAT-powered ecosystem is predicated on removing intermediaries in the online advertising marketplace and preserving user privacy. It rewards users, provides better margins to advertisers, and produces higher-revenue yields for publishers.
Basic Attention Strengths +
- BAT token is paired with the successful, privacy-focused Brave Browser, an open-source web browser that has over 35 million monthly active users
- Created by Brendan Eich, creator of the JavaScript programming language and Co-Founder of the Mozilla Project
- Clear and easy to understand use-case; BAT presents a solution to the problem of surveillance capitalism and the traditional frictions/intermediaries of the current digital advertising model
Basic Attention Weaknesses -
- Current iterations of the Brave Browser and BAT payment system are centralized as they are both run by Brave Software Inc.
- Usage is quite low daily transactions remain an only approximated 1,500 per day
- Contentious ICO led to very few individuals actually participating in the launch sale, some estimating less than 200 people total
- Because BAT is an ERC-20 token, users still have to pay ETH gas fees when transacting in BAT which have been prohibitively expensive for small, tip-like payments
Analysis Methods
reviews hundreds of different factors/metrics/parameters across ten Core Categories for evaluating value, potential, and risk for cryptoassets by a human-led team. While simply using data-scraping to aggregate on-chain/Github/node count/social media data is quick and helpful, it is but only a small fraction of the whole picture. This algorithmic approach (the popular approach by many of the leading crypto “research firms”) is inadequate, lacking the necessary depth, context, and nuance needed to appropriately evaluate a crypto project. Most things in life are rarely so black and white and the wild, new world of cryptoassets is no exception.
For examples of why the data-scraping approach is insufficient, take a look at the examples below and answer for yourself.
- Project X has 25 developers and Project Y has 50. Which one has the “better” overall team?
- Project X has 200 Github commits in the last month while Project Y only has 20? Is Project Y stagnating? Is X gaming the system? Or does Project X have to do 10x the work because their original code was buggy?
- Project X has a staking reward of 10% and Project Y 5%. But what about inflation? Or pay-out times/lockups? Our underlying currency risk? Is one losing value compared to the other? Which project offers the best risk-adjusted returns?
- Project X has 100 nodes and Project Y has 1,000. But are there master nodes? A permissioned system? Same consensus mechanism? What’s the node geographic distribution? The concentration of mining pools?
These are just but a few examples of the problems one must solve to adequately evaluate a cryptoasset project. Our goal from day one has been to provide unbiased, high-quality, comprehensive research in order to deliver high signal-to-noise, practical, and impactful information you can immediately use to your advantage.
We are dedicated to providing accurate cryptocurrency ratings based on risk and quality in order to help investors and institutions to reduce liabilities and make more intelligent financial decisions.
This approach means having to constantly reevaluate blockchains over time as they build, grow, evolve, fork, etc. as new data becomes available. With this mindset and against the backdrop of our original CORE Categories, we are happy to announce a new CORE Rating for Basic Attention Token (BAT)!
Basic Attention Token (BAT) has been downgraded from a Bronze rating to a Neutral rating. A Neutral rating is our lowest rating aside from outwardly problematic and scammy projects that warrant a Deficient rating. Neutral implies that while there are no glaring vulnerabilities or threats associated with the project, there also are no obvious advantages or superior aspects associated with the project.
Downgrade Factors
Some factors that have evolved over the last 1-2 years that led to BAT’s downgrade include:
1. Four years in and still no usage
Despite Brave browser’s monthly active users (MAU) seeing a ~35x growth over the same time period, BAT Daily Active Addresses (DAA) have remained stagnant around sub-2,000 addresses.
BAT Daily Active Addresses. Source: CoinMetrics
Brave browser metrics. Source:
2. Ethereum fees make BAT’s core use case uneconomic
Since BAT launched, Ethereum has become increasingly popular, leading to higher network fees. Transaction fees on Ethereum have gone from ~$1 in 2017 to $40+ in 2021. Because BAT is a medium of exchange (MoE) token primarily used to tip in small quantities, it has become economically infeasible to use BAT as intended.
Rising ETH fees. Source: CoinMetrics
The transactional data associated with BAT bears this out as well. Transactions have stalled because no one wants to pay $20 in fees to send a $1 tip. According to the Brave roadmap, there are plans for BAT to move to another chain with lower fees (Polygon) or potentially an Ethereum Layer 2 solution. Until that happens, BAT is largely unusable.
BAT transactions have fallen to near zero in 2021, coinciding with the rise in ETH fees. Source: IntotheBlock
3. Better off holding ETH
The BAT/ETH ratio is nearing all-time lows and looks like a dead project since mid-2019. This is in comparison to the dozens of DeFi coins that have launched in the interim and obtained real usage that translates into token appreciation. BAT’s value capture and use-case remain unproven even after 4 years and a full bull/bear cycle.
BATETH. Source: CoinGecko
4. Competition from others
In September 2021, Twitter released a Bitcoin-tipping option for iOS users enabling some users to send BTC over the Lightning Network to their favorite influencers. Tipping has now been rolled out worldwide, however, Bitcoin-tipping is currently limited due to its partner, Strike. Twitter integrated the Strike Bitcoin Lightning wallet, which is only available for users in El Salvador and the US (except Hawaii and New York).
This tipping feature with BTC on the Lightning Network, while currently only on Twitter, could just be the beginning. If other companies and websites plug into the API, Bitcoin-tipping could directly compete with and, most likely, overtake BAT’s primary use case.
Lightning network growth in 2021. Source: CoinMetrics
In addition to competition from Bitcoin on the infrastructure side, BAT as a medium of exchange faces stiff competition from the growing stablecoin sector. Stablecoins have seen immense growth over the last ~2 years and have become the crypto industry’s de facto trading pair and medium of exchange due to their price stability and liquidity. Stablecoins exist on dozens of layer 1 blockchains, some with extremely small transaction fees. It seems likely that any internet-tipping economy that does evolve (not guaranteed) will use stablecoins or a ubiquitous, large-cap asset, like BTC or ETH, as its medium of exchange.
Total stablecoin supply growth over the same period of BAT’s existence. Source:
5. Wealth concentration remains one of the worst in crypto
Token Distribution - At the time of writing, approximately 73% of the total BAT supply is held in the top 100 addresses.
BAT whales. Source: IntotheBlock
BAT wealth concentration. Source: IntotheBlock
