Research Report: $IMGNAI
13 April 2023
What is ImgnAI?
Launched December 9, 2022, ImgnAI is the world’s first decentralized artificial intelligence image generation project. ImgnAI’s flagship product Nai is currently being used to generate over 100,000 images per day from text-based prompts via Telegram and Discord.
It’s primary utility token $IMGNAI rewards holders with access to premium features on the platform such as HD/4K resolution, upscaling, image remix, NSFW models, SFW 3D/CGI and realism, along with exclusive access to upcoming beta models.
Since launch the growth of ImgnAI’s product adoption has been exponential, within the first 3 months, Nai had spread to 11K+ Telegram groups, 5K+ Discord groups, amassed 11.4K Twitter followers and was being used in 100k+ image generations per day.
Revenue Model
ImgnAI’s revenue model is split into 6 major components: custom tooling for B2B partners, paid advertising slots on the Nai bot, paid advertising on the Nai web app, exclusive NFT tooling, user-trained image models and access to ImgnAI Premium. However, B2B custom tooling is expected to be ImgnAI’s largest revenue driver through 2023, spanning a diversified industry exposure including sports, media, adult, entertainment and more.
Token Deflation
Spent tokens across ImgnAI Premium and NFT tooling are burned, deflating the total supply of $IMGNAI. Deflationary tokens increase intrinsic when all other factors remain constant. Whilst this does not guarantee price increase it is certainly an influencing factor.
Decentralized Governance
A feature of the $IMGNAI token, is that stakers are given voting power as part of the ImgnAI DAO operating policy. Whilst the pros and cons of DAOs have been widely debated the fact remains that it is a strong catalyst for building community around a project, a feature that has been extremely beneficial to ImgnAI.
Community
As I mentioned earlier community is a big driving factor for the growth of ImgnAI, with Nai being prevalent in a large number of communities. With respect to the internal ImgnAI communities there are over 8K members on the ImgnAI Community Telegram and over 9K on their Discord. The sense of community is strong, and sentiment is positive, which is likely to contribute to stronger price growth and lower downward volatility as investor confidence is more likely to remain steadfast during retracements.
Risks
As with all crypto projects $IMGNAI is not without its risks. In addition to normal market risk $IMGNAI has 2 main areas of risk.
Firstly, the project must compete for market share from image generation solutions not on the blockchain, many of which are well established. However, it is unclear how much the project is exposed to this risk as the specifics of the B2B custom tooling is not publicly available due to non-disclosure agreements with clients. Factoring in the rapid growth of the industry as a whole and that a number of these off-chain providers are now locking up their products behind paywalls due to difficulty in meeting demand, we believe that the risk here is low.
The second risk to consider is model performance. For the most part deep learning models are rarely explainable and trying to understand why certain behaviour is exhibited can be challenging. We did note that for some of the prompts provided by users the results seemed a little different from what was prompted however this was only for very specific, niche edge cases and was far more the exception than the rule. Whilst this is a risk to consider in the future, as it stands it is not a concern as Nai’s performance on both general and the more obscure prompts was exceptional, rivalling the more well established off chain competitors.
Technicals and Financials
At the time of writing IMGNAI sits at $0.2044 USD, with a mcap of $15.8M and FDV of $20.4M and a Liquidity of $1.9M. The IMGNAI/WETH pair is exhibiting strong momentum that we believe will hold as it begins to test levels of resistance.
Consensus
Overall, we have a strong positive sentiment on $IMGNAI. ImgnAI has a strong first mover advantage which they have capitalised on well by aggressively building out their community, reach and quality of product offerings. The products itself has a number of advantages over competitors outside of performance, two of the more noteworthy being the breadth of image types it can accurately generate (from artistic pieces to realism and more) and that Nai is subject to a less aggressive censorship than some of its off-chain competitors, such as Midjourney and Dall-E. Lastly we believe that one of the large contributing factors to the fast pace of adoption by users is the low friction of Nai, the tool is incredibly intuitive and easy to set up and utilise effectively and the overall UX is nicely streamlined, greatly improving the customer experience. To compound on this, ImgnAI will soon be releasing a web application to further extend its customer base.
ImgnAI has a strong and cohesive team leading the project, and we are confident that team will continue to deliver with the same quality or decisions and work that have led to the project's growth so far.
ZEdge Capital Holdings
At the time of writing ZEdge Capital's Artificial Intelligence Thematic Portfolio holds 27% of its assets in $IMGNAI.
Since it's addition to the pool, $IMGNAI has generated a return of 49% over a 4-day period, netting a strong return for ZEdge Capital's investors.
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