1/9/90 in Crypto by @ttunguz
Distributed autonomous organizations (DAOs) are one of the most vibrant areas of crypto. DAOs are groups of people with the right to vote to change how a crypto company operates. DAOs pop up for many different reasons: to form a social club that requires a token to join, to buy a copy of the Constitution, to manage open source software. Almost any group of people can organize a DAO to pursue a shared purpose. Anyone holding a voting token can vote, much like anyone who buys a share of voting ...
1/9/90 in Crypto by @ttunguz
Distributed autonomous organizations (DAOs) are one of the most vibrant areas of crypto. DAOs are groups of people with the right to vote to change how a crypto company operates. DAOs pop up for many different reasons: to form a social club that requires a token to join, to buy a copy of the Constitution, to manage open source software. Almost any group of people can organize a DAO to pursue a shared purpose. Anyone holding a voting token can vote, much like anyone who buys a share of voting ...
Tokens as CAC - Are Crypto Companies More or Less Efficient in Acquiring Customers? by @ttunguz
Tokens are the paid customer acquisition channel of web3. By analyzing how web3 companies invest tokens, we can calculate the cost of customer acquisition (CAC) for a crypto company. When a user spins up a validator to verify transactions on a blockchain, stresses the testnet and is rewarded with tokens, stakes tokens to generate yield, burns tokens to transact, or receives an airdrop for tweeting, a cryptoco expends tokens to acquire a customer. Hence tokens, which have value, constitute the...
Tokens as CAC - Are Crypto Companies More or Less Efficient in Acquiring Customers? by @ttunguz
Tokens are the paid customer acquisition channel of web3. By analyzing how web3 companies invest tokens, we can calculate the cost of customer acquisition (CAC) for a crypto company. When a user spins up a validator to verify transactions on a blockchain, stresses the testnet and is rewarded with tokens, stakes tokens to generate yield, burns tokens to transact, or receives an airdrop for tweeting, a cryptoco expends tokens to acquire a customer. Hence tokens, which have value, constitute the...
How Correlated are the Web 2 and Web 3 Software Markets? by @ttunguz
In the last few weeks, public software company multiples have halved. As have cryptocoins. Solana and Etherum followed Snowflake and Elastic downwards. So much for the Santa Claus rally. Both declines seem to have been catalyzed by the Fed’s intention to hike the Fed Funds rate three to four times in 2022. Beyond the most recent cycle, how often do the web2 and web3 software markets move in synchrony? After all, Web3 is a future incarnation of software and infrastructure. Like high growth sta...
How Correlated are the Web 2 and Web 3 Software Markets? by @ttunguz
In the last few weeks, public software company multiples have halved. As have cryptocoins. Solana and Etherum followed Snowflake and Elastic downwards. So much for the Santa Claus rally. Both declines seem to have been catalyzed by the Fed’s intention to hike the Fed Funds rate three to four times in 2022. Beyond the most recent cycle, how often do the web2 and web3 software markets move in synchrony? After all, Web3 is a future incarnation of software and infrastructure. Like high growth sta...
The Top Sectors of Web3 in 2022 by Revenue
With the summer of Defi behind us and a new year for web3, I wondered which categories of web3 startups generate the most revenue.L1s or blockchains, the public databases that record transactions, dominate the revenue share across the top projects producing 78% of revenue. Exchanges place second. Right behind, NFT exchanges rank third. Defi Protocols, which include lending, perps, farming, and swaps, slot in fourth. Gaming, Wallets, Infrastructure, Consumer Apps, Insurance and Asset Managemen...
The Top Sectors of Web3 in 2022 by Revenue
With the summer of Defi behind us and a new year for web3, I wondered which categories of web3 startups generate the most revenue.L1s or blockchains, the public databases that record transactions, dominate the revenue share across the top projects producing 78% of revenue. Exchanges place second. Right behind, NFT exchanges rank third. Defi Protocols, which include lending, perps, farming, and swaps, slot in fourth. Gaming, Wallets, Infrastructure, Consumer Apps, Insurance and Asset Managemen...
Justifying Token Equity Multiples using GDP Data
Skip to Content When investing in a crypto startup that will issue a token, an investor considers two prices - the price of the equity and the price of the token. There’s a rule of thumb used today that states the token should be worth 3-5x the equity. A founder informed me the rationale is that a share in a company has a lien on the future dividend streams, but a token has a lien on profit share of the GDP around an economy and that economies tend to be 3-5x larger. Walking home from a meeti...
Justifying Token Equity Multiples using GDP Data
Skip to Content When investing in a crypto startup that will issue a token, an investor considers two prices - the price of the equity and the price of the token. There’s a rule of thumb used today that states the token should be worth 3-5x the equity. A founder informed me the rationale is that a share in a company has a lien on the future dividend streams, but a token has a lien on profit share of the GDP around an economy and that economies tend to be 3-5x larger. Walking home from a meeti...
