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It was time to find a new long-term pick. After long consideration and research, I chose to add EFX to my long-term portfolio. I’ve followed the team for a long time now, friends kept me updated on their progress, and big things have been happening behind the scenes. Therefore, I am happy to share my ‘research report’ on Effect AI. I’ll see to possibly update this post in the near future with a competitor analysis. That being said, let’s dive into it.
Effect AI is building the Effect Network on the EOS Blockchain. The Effect Network is an open, democratic & decentralized network for artificial intelligence. Before reading through this post, I recommend you watch the short video above to better understand what Effect AI is and what they do.
The Network consists of AI-related dApps that are connected to the same Smart Contract stack. The Smart Contracts that make up The Effect Network include the EFX token, a staking and governance model, and several user directories. Effect AI is building three initial decentralized applications for the development of AI.
These applications are Effect Force, Effect Smart Market, and Effect Power. In this post, we will discuss all three topics.
This review of Effect AI – EFX was created for informational purposes. This article is not intended for promotion.
Effect Force is currently where most of the magic happens. Effect Force offers high-quality training data provided by thousands of workers that can complete tasks at scale in numerous languages. Clients use this for data collection, sentiment analysis, chatbot development, video transcription, translation, NLP-related tasks, and much more.
Effect Force is gripping for enterprises as it enables them to access data and collect and structure their data so that it’s usable in their artificial intelligence system(s). Even companies that aren’t using AI can quickly start using it to improve their business activities.
This service is used by enterprises of all sizes and sectors, from startups to large multinationals. The easiest way to see how this works is by looking at their use cases, which can be found here.
There are case studies on projects with organizations/enterprises such as The United Nations, ING, KPMG, Kraft Heinz, Quadia, Linus Tech Tips, and many more.
Enterprises can start using Effect Force in just four easy steps: set an objective, create tasks instructions, launch the campaign and finally receive the results. These tasks are divided into micro-tasks which are completed by thousands of qualified workers from all over the world, providing work to people in third world countries who earn well above the average wage of their home country by working on Effect Force.
This is all fully decentralized, and the workers receive instant payouts (in EFX) for their work on the platform. With nearly 15 million tasks completed, Effect AI has served many clients worldwide already.
Effect Force can meet EVERYONE’s unique needs, adapting from small, on-demand tasks to high-touch, fully managed customized solutions.
The Effect Smart Market is the second phase of the Effect Network, which is also operationally active in the background of the network already. The Effect Smart Market is an open marketplace that aims to make AI more accessible to the masses, just like Effect Force. With the Effect Smart Market, everybody can offer their algorithms, which others can then use for the rates decided upon by the owner of the algorithm.
The combination of Effect Force (an open platform where people can get their data structured and trained) and The Effect Smart Market (an open marketplace where people can offer and rent out their algorithms) already form a significant part of the Effect Network.
While phases 1 and 2 of the Effect Network decentralize the data gathering and usage of AI algorithms, the algorithms are still running on centralized servers. This is where Effect Power comes in. Effect Power will distribute the computation so that the algorithms run globally without a single point of failure and thus creating a fully decentralized ecosystem.
Effect Power is not live yet, and an exact launch date hasn’t been announced yet. The team currently focuses on bringing in requestors to train their data on Effect Force and building out the Effect Smart Market.
Since the Effect network is becoming a fully decentralized system, everybody can build upon it and offer their services on TEN (The Effect Network). To set the right example, the Effect AI team has already built two fully operational dApps on TEN, namely: Rosette and Effect Translate:
According to the Effect Translate website, ET is 40% faster and 30% more cost-efficient than other solutions while offering 99% accuracy. ET is used for video subtitling, audio transcriptions, document translations, website / mobile app content, and many other services.
These services are offered in 25+ different languages, making them very handy for enterprises from all over the world. Although the service is very young, various big players already use this service. One of these big players is Kraft Heinz, with whom they have a contract going into the millions of euros.
For more information on Effect Translate, visit here.
I’m excited about their YouTube Subtitles service (Rosette). There’s nothing worse than seeing poorly translated videos or videos with poor captions. Rosette makes it easy for enterprises and YouTubers to offer multilingual videos on their channel.
I can name various reasons why this is huge:
Enterprises or YouTubers interested in these services can fill in an accessible form. They submit their uploaded video (link), select a service, and receive captions or translated versions within 48 hours. Various prominent YouTubers use this service already; one of them is LinusTechTips who has over 10 million subscribers.
For more information on Rosette, visit here!
But, that’s not everything! Two tokens power the entire Effect Network. The first is EFX, which is used to power the operations of the Effect Network. And the second token is NFX, which is the Governance token of the network (important for having decentralization).
EFX is used throughout the entire Effect Network. Here are a few examples of how EFX is used to power the network:
As stated before, NFX is the governance token of the Effect Network, which powers the Effect DAO. The Effect DAO is an essential part of the entire ecosystem as it ensures decentralization and governs the entire network. To participate in the government network, it is rumored that you will need to lock up at least 100k EFX and 10k NFX. Some benefits of being able to participate in the Effect DAO are:
Alongside these developments, platforms, and services, the team is primarily dedicated to creating opportunities in developing countries. Last year, they partnered with the United Nations to develop opportunity centers where underprivileged youth can gain access to their platforms to work and earn crypto (EFX) and supply accelerated learning platforms for the center’s members to learn about AI, Blockchain, and programming.
The first center opened in January 2020 in the country of Georgia. The next center has just been announced and is in partnership with Akon, the artist. The center will be located in Kenya and open by the end of the year. These African centers will be co-branded Akon-Effect Hubs with the goal to open several Hubs all over the continent.
Effect AI has been long under the radar, and in my opinion, EFX is currently substantially undervalued. Unfortunately, the exchange liquidity isn’t excellent, but I believe this will improve as we’ll see other exchange listings and more interest in the project.
It makes sense EFX has been under the radar. The team has focused solely on development during the bear market and decided that marketing will follow afterward. This has enabled them to survive the bear market and release (or be close to releasing) various products.
That they haven’t done a lot of marketing yet doesn’t mean EFX isn’t interesting to hold. It’s a long-term play, but the team is (finally) preparing various marketing activities by the looks of it. I believe that instead of hype, there is value; 2 out of 3 phases are live, the team built two services on top of their network, and they are working with some major clients who can possibly bring in millions in revenue like KPMG, ING, ABN AMRO, Kraft Heinz, Quadia, LinusTechTips, and various other partners. The exact revenue numbers have not been shared yet.
For now, these clients pay the team with fiat, and the team uses these funds to buy their EFX token on the exchanges (Newdex and Bidesk). What’s interesting is that Effect AI has already been generating revenue, but they haven’t started buying back EFX from exchanges yet. This is anticipated to happen shortly, which should bring quite some demand to the token. With these thoughts and considering the team is finally at a phase where marketing makes sense, I’ve purchased some EFX myself (and will hopefully add some more around $0.02 in the near future). This is a long-term hold, and so I don’t mind the low liquidity at this point.
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