@koeppelmann The Crazy thing is that projects can be abandoned and Money is still left in the Pools and in the Token. Compound should be worth much less.
English
Blockchain-Comparison.com
608 posts
Blockchain-Comparison.com
@BCComparison
Elevating top blockchain ecosystems. Opinionated.
Berlin Katılım Eylül 2018
2 Takip Edilen1.4K Takipçiler
What’s the main reason that Aave TVL and FDV are today 10x of Compound despite being in a similar position ~4 years ago?
Ignas | DeFi@DefiIgnas
$AAVE vs $COMP since 2021: - $AAVE +447% - $COMP -61% AAVE is now 10x the market cap of $COMP Surprisingly, both trade at same FDV-to-TVL ratio as Compound TVL stands at $2.6b vs Aave's $26B But Compound's growth has stagnated: Aave's TVL reaching ATL while Compound hasn't grown for 2 years straight. This is despite a controversial decision to launch Polygon vaults using rival Morpho's tech after a Gauntlet-proposed deal. Goal was to capture Aave’s marketshare after it left Polygon market. The deal included paying $3M in $COMP/$MATIC incentives to bootstrap liquidity. Personally, Compound was one of the first DeFi apps I've ever used. When Compound launched liquidity mining, it was my one of the top "WTF" memorable moments in DeFi. Now, Compound's mindshare on X is basically nonexistent. I guess this is what 'exiting to the community' looks like.
English
The internet of money, the internet of value, financial and non-financial transactions will settle on Ethereum.
Conflict settlement will be public, verifiable and near-instant. There will be slightly different interpretations but the state will be stored & history will be intact
English
The Good News: Layer 2s on Ethereum add cryptographic security, i.e. even if they go down, you can get your $eth out!
The Bad News: There‘s many other chains, protocols, assets (IOUs) issued by centralized issuers which are intransparent, manipulatable, ruggable.
Be Safe.
English
Crypto = Cryptography, cryptocurrency, censorship-resistant data moving on uncensorable rails*
*Foundational protocols/assets like Ethereum $eth have to be 100% resistent. Each protocol, app, asset on top adds risk as most trade cryptographic security for manual adjustability
English
Some blockchains have been running securely without interruption for 10 years. That is worth a lot.
Others are interesting startups but definitely no good store of value and come with risk if you want to have DeFi there, trade tokens or even stocks!
Cassie@DuchessOfDeFi
Crypto is a lie. We were promised pure decentralization, unstoppable code, and trustless systems. Turns out… most major chains have hit the brakes when things went south. •Ethereum hard-forked in 2016 to reverse The DAO hack. $60M was on the line. •Solana has paused its entire network multiple times—Feb 2023, Sept 2022—to contain bugs and exploits. •Bitcoin rolled back a 2010 bug that created 184 billion BTC. Yes—billion. But when $SUI uses safeguards to freeze stolen funds? “Centralized! Fraud!” Nah. That’s called protecting users. If your idea of decentralization is “let the hackers keep the money”, you’re fighting for anarchy, not adoption.
English
@nickwh8te The fee amount is neither a spam prevention nor a fundamental improvement versus Ethereum - as ETH fees are low enough for businesses & protocols to Build profitable businesses without missing the cost (while obviously offering a lot more with apps, liquidity, composability..)
English
Ah the good ol "$0 fee" FUD
This is a magnet for people who can't conceive of a standard growth playbook in startups: subsidize costs, grow market share, monetize later.
Celestia's fees are currently set to ~$0.00001 per user tx, 50x less than Ethereum blobs and 100x less than Solana. The reason it's not exactly $0 is for spam prevention. We don't care if we don't make revenue in the short term - it's peanuts compared to where we're going and we want to win in the long term.
And the strategy is working as intended. Market share has steadily grown since launch, we have a rapidly expanding ecosystem with top apps like Abstract, Converge + Ethereal by Ethena & Securitize, Blackbird, and Noble launching soon to name a few. $600m in TVS will soon become billions. 25 chains will soon be 50.
The time to be bearish was before we had clear PMF and one of the strongest app ecosystems of any L1.
Picolas Cage@Picolas_Caged
3 billion FDV- $376 chain fees in the last 24 hours. $TIA
English
As the cryptoeconomy institutionalizes, trillions of dollars in assets will be tokenized on blockchains over the coming years.
Your job is to figure out which protocols are best positioned to monetize these flows.
There is no bigger driver of growth than this.
English
@larry0x Moving from a solid eth l2 inplemenentation to a standalone cosmos chain was a massive fumble and time should indeed rather have put into product, Customer & Investor Relations and ofc also token design
English
Summary
- Paid a lot of tokens to MMs (who then dumped)
- Failed to list new markets quickly enough (traders will move to new exchanges where they can trade the assets they want to trade)
- Fractured liquidity between v3 & v4; worse spread and funding rate
- The v4 chain executes poorly (slow block time etc.)
- Poor tokenomics (equity holders get everything, token holders get nothing)
- Too much effort on decentralizing the infra (which no one cares) rather than product
- Early comer disadvantage (users prefer to be early in the new shiny things)
- No good vibe or culture
- Geoblocks Americans
- Founder retired
- Cosmos curse
Larry Engineer 🍡@larry0x
What did Dydx do wrong?
English
Blockchain-Comparison.com retweetledi
When you map out stakeholders, you realize that maximizing fees IS bad for continued adoption, growth of the economy.
Now do with this information whatever you gotta do - optimize for 1 KPI, game it, sell it to bad investors or build sustainable value for economy contributors 🙂
English
Nobody should say “There’s 10mio transactions vs 1mio. It’s worth 10x”;
Nobody should say “this makes 5x more REV. It’s worth 5x”;
WITHOUT checking incentives, expenditures for other stakeholders! Too simplistic.
Optimize for stakeholder value accrual/growth vs value capture!
Blockchain-Comparison.com@BCComparison
@jon_charb The thesis every serious crypto researcher/investor should underwrite is that you can’t overfocus on 1! KPI. REV is a starting point. GDP/econ activity is better. Best is measuring (trend of) demand for the asset from diff sources (incorporating incentives that cloud the image).
English
@jon_charb The thesis every serious crypto researcher/investor should underwrite is that you can’t overfocus on 1! KPI.
REV is a starting point. GDP/econ activity is better. Best is measuring (trend of) demand for the asset from diff sources (incorporating incentives that cloud the image).
English
REV minimalism is bag-pumping BS
Handwavy undefined properties aren’t the best or even a reasonable way to value an L1 token - not by a long shot.
This season, some crypto folks are pushing the idea that “we can do nothing, but say our token is arbitrarily valuable money.”
⟠@ryanberckmans
REV maximalism is bag-pumping BS REV by itself isn't the best or even a reasonable way to value an L1 token - not by a long shot. This season, some crypto folks are pushing aggressive REV maximalism, which is the idea that REV is the "top-line metric of a blockchain" and/or "the best way to measure value accrual to an L1 token". These are real quotes from REV maximalists - let's examine why they don't hold up to reality. First, what is this metric? REV (Realized Extractible Value or Real Economic Value) is just all the money users pay to an L1, ie. total L1 fees plus extracted MEV. REV was invented by flashbots to represent the subset of theoretical MEV that was actually extracted. These days, REV is in the limelight and is often inappropriately encouraged to be the defining lens to underwrite an investment in an L1. L1 valuations are a complex topic, but boil down to investor confidence. L1 tokens are confidence-based assets, similar to USD or gold. Confidence can come from potentially many different sources, including REV. Every source might be net bullish or bearish, but all sources need interpretation and contextualization. Every L1 valuation is a mosaic - the whole is greater (or maybe lesser) than the sum of its parts. It's the same for publicly traded companies, this isn't a new or controversial idea. Sometimes, high REV can coincide with an extremely low L1 valuation, or low REV can coincide with an extremely high valuation. Here are two case studies illustrating why REV maximalism is not a serious investment philosophy (except perhaps to seriously get you to buy its proponents' bags) In Nov 2021, Solana hit a new ATH FDV of $131.6B (with, btw, a staggering $54B or 40% uncirculating supply)[1]. Sol REV also hit a new ATH of $8M for that month[2]. This gave SOL a FDV-to-REV multiple of 1,370x (in equity terms, that's 1370 years for the valuation to be earned from revenue; tesla's is currently 192 years, msft's 35 years). It's an example nearly zero REV coinciding with a super high valuation. In the past 365 days, Tron had 1.37x more REV than Solana[3], and 3.2x more in terms of Q2 run rate. If Tron were valued at Solana's current FDV-to-REV multiple, it would confer a 12x higher valuation - from Tron's current $25B FDV to a hypothetical $292B. This hypothetical valuation is, of course, absurd, because REV maximalism simply incorrect. Tron became an admirable success story when they actually banked tens of millions of unbanked people, but has structural headwinds that cause its high REV to be accompanied by a lower valuation. These examples help show what should be common sense: L1 valuations don't boil down to one metric, not even close. But if it did somehow boil down to one metric, REV probably wouldn't be it. REV is a user cost that, imo, reflects confidence and value creation less effectively than other metrics - such as GDP[4] or User Assets (which themselves don't tell the full story). It's also highly sensitive to congestion and MEV maturity. If you double blockspace and improve MEV protection, REV might drop by 95%+. If you're investing in L1 tokens, it makes sense to look at REV. But it also makes sense to look at GDP, User Assets, and many other stats and details, and then step back and try to contextualize it all into what's actually going on with the L1 and its confidence trajectory. Where do an L1's REV/GDP/User Assets come from? How is that likely to change over time? Are users satisfied with or even fully aware of the fees they are paying (be it spent on GDP or REV)? Are User Assets durable, like stablecoins, or much more volatile/ephemeral, like memecoins or low float app tokens? The Ethereum community and our many partners have done a lot of work to lay deep foundations for ETH to grow into a multi-trillion-dollar asset. Some of this work is already visible in key metrics, such as in eth's best-in-class User Assets (aka App Capital, ~$225B, ~10x more than Sol, ~3x more than Tron), or in eth's ~80% market share in RWAs[5]. In short, REV maximalism is nonsense. REV must be evaluated alongside and in the context of other primary and secondary metrics, as well as with the L1's actual story and details. --- [1] web.archive.org/web/2021110620… [2] blockworks.co/analytics/sola… [3] tokenterminal.com/explorer/proje… [4] NB some analytics platforms report GDP with material inaccuracies, including eg. using protocols' gross profit instead of actual topline revenue, or by excluding stablecoin investment income from GDP - even though this is the vast majority of GDP onchain today. Some of the best GDP data are defillama's "advanced fees" defillama.com/fees/chains/et…, but they don't yet provide an aggregated view of L1+L2s (or even full rollups), and they also haven't yet added stablecoin investment income for certain chains. As an industry and asset class, we need better, more neutral data for GDP, and User Assets, and REV. [5] app.rwa.xyz/networks
English
@matthuang @MikeIppolito_ Bootstrap economy = “Simple” allocation of Investments + REV to get key Econ stakeholders
Best offering (mix of security, usability..) = “Optimal” Incentive/Value Redistribution for Econ growth
*few SoV L1 assets only
**others are startups that should max REV + utility premium
English
@matthuang @MikeIppolito_ 100% agree!
Early-stage: Use demand from few investors + onchain users (REV) to bootstrap economy
Late-stage: Diverse demand from (sub-)economies, apps, investors IF best offering (incl low fees/REV)
Start thinking about value accrual for economy stakeholders vs value capture!
English
You can believe GDP and REV are important, while also disbelieving that a DCF is the right way to value the native asset of an L1
English
Bring billions onchain.
Offer value to millions of businesses and billions of users.
Overoptimizing revenue (extraction/dividends) is a loser management strategy that is not thinking big enough.
x.com/BCComparison/s…
Blockchain-Comparison.com@BCComparison
@RyanWatkins_ Eth onchain adoption has grown sig in past 3 years thanks to l2s. (High) REV from artificially lmtd blockspace is temporary/cyclical phenomenon. It can be growth accelerator during mania but onchain businesses & users need manageable, predictable low fees to contribute to GDP.
English
Optimize L1 asset demand - to pay for security AND growth.
Onchain adoption is just starting & will grow in next decades. Fees + $eth demand from Mio of apps will be massive demand driver.
But short- AND long-term investor demand may be just as big!
$eth is growth asset & SoV.
Blockchain-Comparison.com@BCComparison
@RyanWatkins_ 17: ICO $eth demand 20: DeFi $eth demand 21: L1 fees/REV bad for adoption 23: $eth demand can come from n places (incl l2 economies) Growth/Pay security via - inflation (all holders) - l1 usage (onchain users) - mix: l1/l2 users, investors, x L1 users paying is NOT 🥇 option!
English
@RyanWatkins_ Eth onchain adoption has grown sig in past 3 years thanks to l2s.
(High) REV from artificially lmtd blockspace is temporary/cyclical phenomenon.
It can be growth accelerator during mania but onchain businesses & users need manageable, predictable low fees to contribute to GDP.
English
@RyanWatkins_ 17: ICO $eth demand
20: DeFi $eth demand
21: L1 fees/REV bad for adoption
23: $eth demand can come from n places (incl l2 economies)
Growth/Pay security via
- inflation (all holders)
- l1 usage (onchain users)
- mix: l1/l2 users, investors, x
L1 users paying is NOT 🥇 option!
English
Regardless of whether you believe ETH is money, Ethereum’s REV falling off a cliff since 2021 is unambiguously bad.
At the least, less REV means less resources to sustain the validator set and more inflation to compensate.
Classic case of fiscal issues creating monetary issues.
English
Smart contracts, onchain economies that use (or burn) $eth & cannot be changed are premium demand: native type 2 l2s, $eth locked in DeFi (LP)..
It’s also fair to use $eth revenues for other purposes like salaries or growth.. but $Eth (ereum) may opt-in to incentivize alignment.
English
Demand from Ethereum l1 onchain usage is tier 1 demand & translates directly into revenue & $eth burn.
Demand from Ethereum l2, apps, sub economy usage (& investor demand) translates into holder demand - but should be discounted a bit in models because of additional uncertainty.
English
You should MAXIMIZE DEMAND for the asset.
Bitcoin is leading with institutional investment demand.
Ethereum is leading with (onchain) demand from various stakeholder groups.
All other L1/L2s should focus on revenue that can directly translate into fundamental buy & burn demand
Matt Huang@matthuang
IMO, regardless of whether you believe L1 assets are monetary or equity-like… you should care about maximizing REV.
English