Tokens for analysis
By: Kacper Wikieł
Tags: Valuation, Tokenization, Token Economy

Pitch: There are many tokens and there is no viable buy-side analytical community, people are usually buying stuff and then using rationalization post-factum.

Problem: Cryptoassets are highly correlated and since many cryptos are almost obvious scams or not-great-coins then retail investors aren’t buying anything valuable.

Let’s make efficient markets!

Thesis: Medium of exchange tokens value could collapse

What this all serves to show is that relying purely on the medium-of-exchange argument to support a token value, while attractive because of its seeming ability to print money out of thin air, is ultimately quite brittle. Protocol tokens using this model may well be sustained for some time due to irrationality and temporary equilibria where the implicit cost of holding the token is zero, but it is a kind of model which always has an unavoidable risk of collapsing at any time.

Physics

The sum of the flux is proportional to the total charge enclosed

Sum of value flowing outside crypto is proportional to on-chain revenue

Let’s add deposits into exchanges Subtract fiat withdrawals from exchanges Compute difference = is it positive or negative?

Compare with equity markets:

It’s hard to believe that corporations bought $1.5 trillion of their own stock over the last three years while net inflows into mutual funds and ETF stock funds were less than $500 billion. When we talk about “investors” we think of people investing their own money, but the overwhelming driver of stock purchases are companies themselves.

https://www.fool.com/investing/general/2016/02/25/hard-truths-for-investors-to-wrap-their-heads-arou.aspx

How?

fundamental research / both quantitative (eg. @coinmetrics ) and qualitative

short selling (eg. dXdY / Dharma and others): token research doesn’t have value unless you can monetize it via prediction markets or just shorting (going long is already an available option)

Binance

How to value:

DCF on token burn

Get reliable quarterly data and create predictions, compare revenue data with alexa/similarweb/web traffic estimations rankings

2. 0xBitcoin

How to value:

Holders data : https://bloxy.info/token_holders/0xb6ed7644c69416d67b522e20bc294a9a9b405b31

Mining cost vs Bitcoin mining cost

Market valuation per active user

Transactions per token holder per month — calibrate to Bitcoin and Bitcoin Cash

3. Maker

DCF on token burn

SoV speculative vs non-speculative part (Maker/Dai):

Tether replacement scenario: fees

4. 0x

Value of governance scheme (may be negative? )

Short or Long Convexity (changes of team % holdings )

5. Tezos

Compare to Ethereum ecosystem

6. Amoveo

Other prediction market comparison

Fees vs Augur

7. Santiment

Demand for knowledge

Usage statistics

8. Golem

Cost improvement over centralized services

Marginal costs / Case for underutilized hardware

Capex cost of hardware as % cost of datacenter

9. Neumark

Tokens are minted via investing in equity tokens

Create some assumptions about money raised via platforms and dividends

Basic calculus required

10. Free place

Interested in analysis of other tokens/coins? Post something worth analysis (unique valuation model required) in comments

How to contribute?

Sign up for our Telegram group

https://t.me/joinchat/CI2NEBIm1lG13wMIP_YTEA