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SingularityNET Reports Strong Financials for 2021
Financial Highlights 2021
Per the Phase Two commitment, the detailed Annual Financial Report for 2021 and the 2022 Budget are here presented to the AGIX token-holding community. The Foundation is proud to provide this report, as approved by the Operations Team, the Foundation Board, and Supervisory Council, in furtherance of transparency and decentralization of the organization. Some highlights:
- SNET Phase II successfully launched globally
- SingularityDAO, Nunet, and SophiaDAO spin-offs raise over $10,000,000
- SNET Treasury ends the year at $14,453,580
- $4,669,305 in AGIX ADA tokens added as off-balance sheet item
- Total expenses register $5,004,814
- AI R&D spend for wider ecosystem hits $2,480,261, 105% rise over 2020
- Total income of $6,716,0074
- Net Income increase to $1,711,190
SingularityNET Foundation (SNET) witnessed a rise in the most important financial and operational indicators for the yearly reporting period ended 31 December 2021. In an active and exciting year marked by the launch of SNET’s Phase II initiative, highly successful spinoffs, a strong crypto market, and development activities across the ecosystem, the SNET management team strengthened its position in the quest for beneficial, decentralized artificial general intelligence (AGI).
Read the full report here.
2021 Crypto Overview
The year 2021 featured volatility from end to end as markets reached euphoric heights by H2 2021, tempered by gusts of a coming crypto winter in Q4 2021. BTC rose to a record $69,000 in November 2021, while NFTs made their mark for the first time. Layer 1 networks like Solana, Avalanche, Cardano, Terra Luna, and Harmony outperformed ETH in a meteoric rise. Stablecoin market cap rose 500%, BTC was adopted as legal tender in El Salvador, public companies added BTC to balance sheets while Wall Street joined the bandwagon. Even China’s crypto ban had little effect on a bull run that added hundreds of billions to the coin cap. AGIX followed suit to reach its own highs of 0.64 USD (September 2021) for a coin cap of $640M.
While BTC, AGIX, and the Layer 1s came back down to earth by year-end, the overall 2021 strength of crypto coin prices from stables to alts showed a promising future for the rapidly expanding crypto arena. Many in the crypto world emerged from the year 2021 with substantial cash in their coffers as strong projects proliferated and savvy, loyal token holders enjoyed handsome returns to weather the crypto winter.
Viewing the 2021 dynamics of the crypto sphere from our current July-2022 perspective, dependencies on the broader world situation leap to the fore. Post the end of 2021, crypto prices continued their year-end collapse, down 70% to 90% from highs into January 2022. The inklings of a crypto winter and a broader economic slowdown, that we saw in late 2021, ultimately proved to be portents of major gales to come on the financial, economic, and geopolitical fronts. As 2022 has unfolded, the COVID-19 pandemic has transitioned to a new phase but failed to disappear; global supply chain issues have persisted though in complexified form; and early in 2022 Russia made good on its promise to invade Ukraine. Partly in reaction to these phenomena, the US Federal Reserve has started to prepare for inflation. A nervous stock market has correlated closer with crypto trends in a downward spiral, showing possible signs of relaxation or reversal only quite recently.
It is unclear how the crypto markets or the general economy will fare in the second half of 2022; what is clear, however, is that the strengths of 2021 have put the crypto world in general and the SingularityNET ecosystem in particular in much more robust positions than they were in 2020. Market volatility is a factor to be reckoned with, along with the difficulties of the broader socioeconomic context, yet taking a step back it is plain we are in the midst of an era of dramatic technological and economic growth in blockchain, AI and multiple other domains critical to the realization of SingularityNET’s visions.
In this environment, SNET and its AGIX token community thrived during the year 2021. The 2021 Financial Report shows progress across many fronts for a stable and flexible SNET organization that grew across core domains — from decentralized finance to computing processing and medical advances.
The AGIX token price is a key barometer when it comes to the financial health of the Foundation. As such, SNET was pleased to see AGIX token emerge from the 2019–2020 crypto winter, where the price hovered around 0.01–0.03 USD, to underpin the 2021 financial results.
In January 2021, a new leg of the crypto bull market coupled with the SNET Phase II announcement propelled AGIX to new heights to underpin a key growth spurt for the Foundation as a whole. In the Summer of 2021, bolstered by months of altcoins rises, AGIX reached new highs, peaking at 0.64 in September 2021. However, during Q4 2021 the AGIX price fluctuated between 0.20–0.40 before the altcoin bear market pushed the price to 0.04 in H1 2022.
The SNET Phase II roll-out was the Foundation’s most important achievement in 2021. This Q1 initiative allows for the AGIX token to be interoperable with Cardano, and lays out a clear future roadmap for radical expansion of the ecosystem driven by growing utilization of the AGIX token across multiple verticals. SNET started the minting of the 1bn new AGIX token supply in July 2021 as per the Phase II plan.
On 28 May 2021, SNET airdropped AGIX on a 1:1 basis successfully to replace the AGI token built for Ethereum only with an appropriate supply of AGIX to support the migration and deliver a token interoperable between the Ethereum and Cardano blockchains. To support the upgrade, SNET created a hard fork that made AGI obsolete. The new AGIX-ADA tokens created in accordance with the Phase II plan have accrued since July 2021, with 113,885,498 AGIX minted as of 28 February 2022.
Treasury & Spinoff Strategy
Treasury Management was another highlight in 2021. The Treasury capitalized on upside market volatility locking in large amounts of SNET capital at relatively high prices and created an active network of OTC buyers to avoid the negative impact of Foundation token sales needed to fund research and operations. The results of the Treasury initiative are outlined in more detail in the attached Financial Report.
Crypto exposure remains significant with 67% of the Treasury composed of crypto assets, including 48% SNET coins for year-end AUM of $7,824,951.81. The Foundation realized 17,529,117 utility token sales (net of buys and sells) from the Treasury for $4.8M of cash in stable coins or other cryptos. Besides AGIX token sales, SNET sold SingularityDAO (SDAO) tokens for $ 1.5M and $2.17M in cash from the sale of BTC, ETH and BNB.
The Treasury benefited greatly from SNET spin-off contributions. For instance, SDAO, the newly launched decentralized finance (DeFi) arm, is a case in point. SNET receives monthly SDAO token allocations, which contributed significantly to the Foundation’s funding in 2021. Nunet’s NTX utility tokens are not as liquid, but a similar contribution is expected in 2022 and 2023.
Other spin-offs are in final preparation for token issuance and capital raising. One such project is Awakening Health Ltd., the creator of the world’s first humanoid AI robotic healthcare assistant, a JV with Hanson Robotics Ltd. Some $3.5M was raised to support Awakening’s R&D with $1.5M earmarked to fund research with SNET entities. AHL is moving into a Series A funding round to accelerate mass scale production of AI robots, medical products research and digital healthcare.
Another joint project with Hanson Robotics raised $1.5 million to launch SophiaDAO to support Sophia the Robot’s road to sentience and its associated commercial arm Sophia Labs Ltd., in which SNET has a major equity stake. Sophia’s Age of Singularities (SAOS) progressed with metaverse design, the Sophia AI Labs initiative and a land bank strategy. Other projects like Rejuve, which launched its new longevity application, Mindplex, TrueAGI, Jam Galaxy, Pathform and Cogito are ready to join the spin-off ranks.
2021 P&L and Balance Sheet Review
SNET’s Total Income of $6,716,004 is largely represented by Token Sales Proceeds and the Gain or Loss in the sale of AGIX and Crypto in addition to Unrealized Gain or Loss on Crypto. Net Income rebounded strongly to $1,711,190, up from $529,346 in 2020, a $3,940,494 loss in 2019, but down from a gain of $17,361,008 in the ICO year of 2018.
Total Income from Token Proceeds registered $866,922, down markedly from $2,787,482 in 2020, almost equal with 2019, and well below $34,507,340 in 2018. With a Realized Capital Gain on Crypto ($3,238,552) and AGIX ($2,335,530) factored in, and adding Unrealized Gains of $9,085,916 , Total Comprehensive Income reaches $10,797,106, well surpassing the 2018 peak of $7,163,739.
Total Expenses rose to $5,004,814 in 2021, from $2,320,087 in 2020. Total Expense allocated to AI R&D Expense rose slightly to $1,315,809 from $1,209,411 in 2020. If broader flows across multiple organizations co-ordinated by SNET are included in AI R&D spend is higher. An additional $197,891 is capitalised in Long Term Investments related to Spin Offs, and $966,561 was spent for open source research supporting Opencog/Hyperon and to develop the Awakening Health dialogue system, bringing 2021 AI R&D investment to a total of $2,480,261 AI R&D in 2021.
The SNET Balance Sheet was strengthened by a Treasury Management initiative that took advantage of a strong crypto market. Total Assets jumped with increased values across a basket of BTC, ETH, stable coins and holdings of ecosystem coins, such as newly issued SDAO and NTX tokens. Total Assets rose 191% to peak at $16,295,881 from the $5,600,000 range of 2020 and 2019 and more than double the last high registered in 2018.
Long-Term Investment in SNET Ecosystem companies and spin-offs rose 54% to $1,802,741 from $1,197,828 in 2020. The largest Long-Term investment over time remains Singularity Studio, renamed Amplify, at $977,058, followed by healthcare spinoff Rejuve at $349,139, SDAO at $138,043 and Nunet at $138,043 . Total Long-term Investment rose by $604,913 in 2021, but was still down 20% from $753,818 in 2020.
Long-term Investment paid rewards in 2021 as SNET completed spin off exercises for SDA0 and NTX. Both companies raised around $5,500,000 in 2021 for a combined $11,000,000. The value of SDAO coin held by SNET in 2021 reached $907,991, in addition to cashing about $1,500,000, and NTX hit $495,000, for a total of $1,402,991. This accounts for a contribution of almost $3,000,000 on an investment of $273,351 for these two companies. During 2021, SDAO hit a peak coin market cap of $125,000,000 and Nunet approached $20,000,000.
At year end, 30,571,755 of tokens remained in the AGIX Inventory, down from a high of 337,179,019 at close of 2017. When considering inventory levels it is important to consider the introduction of 1 billion of AGIX-ADA tokens to be minted month by month according to an exponentially decreasing schedule, in accordance with the Phase II plan. Due to no AGIX-ADA trading in 2021, the 43,345,873 of AGIX-ADA received in 2021 is considered an Off Balance Sheet item.
2022 Financial Outlook
The 2022 external market conditions are highly uncertain based on the course of the current crypto winter and the ongoing instability of world financial markets and the geopolitical situation. Advanced Treasury planning and accumulation of gains in 2021 is dampening the impact of a downturn but the ultimate impact remains to be seen.
A major decline in the AGIX coin price requires careful management consideration of the levels at which to fund research and operations through the second half of 2022, though SDAO and NTX have built solid war chests. Fundraising activities are underway for the spin-offs, utilising a range of investment routes and sources, with indications of success. It is acknowledged that It is too early to ascertain the impact of the market environment on the financing of other spin-offs and associated companies, but it potentially may impact valuations, capital raising and the prospect of successful utility token sales.
The Spin-off strategy and the overall development of the SNET ecosystem will continue as close to course as possible in 2022, with the introduction of a number of new spin-off projects (Hypercyle, Cogito, Jam Galaxy) and the realization of older projects (Rejuve, Mindplex, TrueAGI). Accelerated growth in SDAO and NTX and their token contributions will strengthen funding of operations to a degree; and the ongoing expansion of Awakening Health and SophiaDAO may provide a steady stream of AI development contracts to reinforce revenues. Additionally a number of commercial contracts are under negotiation which have potential for material revenue.
SNET stands behind its stated mission of leading the way toward beneficial decentralized AGI. SNET will continue to fund AGI research and tech development and work toward scaling up platform and AGIX token utilization in accordance with the Phase II plan. The early-2022 advent of the DEEP Funding to fuel community AGI development on a broad scale has been greeted with great excitement. The long planned move of SNET governance towards progressive decentralization will enter a key phase, and major announcements are expected. New partnerships will come to the fore and long nurtured ones will support SNET ecosystem growth as SNET’s global AI hubs work towards the release of Open Cog/Hyperon.
Crypto market volatility has always been a factor for SNET and its peers. It is expected this trend will continue into the future. Yet, SNET has built a strong base from which to expand, and management believes that solid projects will find significant market interest even in mixed conditions. As such, SNET expects the outlook for 2022 and 2023 to deliver new advances, ready to capture the inevitable market rebound that follows any crypto winter.
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