Continue Capital: 10 key things you need to know in the cryptocurrency world

Pima

2024-07-11 13:52

Read this article in 4 Minutes

AI summary

View the summary

Original author: Pima, co-founder of ContinueCapital

10 key insights

1.MEV is the foundation of long-term value: In the long run, MEV (maximum extractable value) is a key indicator for measuring the development prospects of a chain. It reflects the scalability, security, and attractiveness of the blockchain to developers and users.

2.TVL is a misleading indicator: Total locked value (TVL) is an often exaggerated indicator because it can be easily manipulated. By raising the price of L1 tokens, TVL data can be inflated.

3.FDV is of great significance: Fully diluted valuation (FDV) is an important indicator because it reflects the potential market value of a blockchain project. Although it is not perfect, it can provide a rough estimate of the size of the project.

4. Economic security is not reliable: It is not enough to rely on economic security alone to ensure the stability of the blockchain, as the cases of LUNA and ATOM show. Other security mechanisms are also needed, such as consensus mechanisms and governance models.

5. The execution layer is the key to value capture: The execution layer is the core of the blockchain, which is responsible for processing transactions and verifying data. Therefore, it is also the main place for value capture.

6. DEX data can better reflect the prosperity of the ecosystem: The Dex data of a chain can better reflect the degree of ecological prosperity. Remember to remove the data of stablecoin exchange trading pairs and L1 Token-U/ETH trading pairs. Some Dex have 60% of the trading volume of the above two types.

7. Focus on developers, not community users: The success of a blockchain project depends on developers, not community users. Therefore, the project strategy should revolve around developers, attract them and provide support.

8. The U.S. stock market is mapped to the cryptocurrency circle: Just like the U.S. stock market, the market value and trading volume of the cryptocurrency circle may also be concentrated in a few head projects.

9. Business model is crucial: Just having a large number of users does not guarantee the success of a project. What is more important is to find a viable business model to convert user value into actual benefits.

10. Value is the foundation of prosperity: The long-term prosperity of blockchain projects needs to be built on a solid value foundation. This requires the introduction of traditional investment systems and valuation models to more objectively evaluate the value of projects.