A few interesting updates and changes to my Top 15 list. My thoughts below on some new valuation data and a “solvency ratio” I’m working on.

Thanks for the great participation in a recent Twitter poll I ran to add some new rebase tokens to my Top 15 list! It was a back-and-forth battle between OtterClam & Fortress DAO and while $CLAM wound up winning in the end, it was so close that I decided to make room for both of them. Kudos to the communities for these projects!

I now added a new column called “% Return after Runway (Assuming $1).” This shows what your % returns would be assuming the following facts:

· Minting/Bonding halted

· 100% of circulating supply is staked

· The price of the underlying token crashes all the way to $1

· The treasury would be able to buy back any and all tokens to cement a $1 price floor

· The current APY stays constant through the end of the current runway.

Now these assumptions I make in this calculation are rather bold. For one thing, Treasury value isn’t accounted for at all, which plays a major factor in just how close to $1 these tokens would reasonably get. I do not foresee tokens such as $OHM and $TIME with their gigantic treasuries to ever fall even remotely close to $1 each. On the other hand, I would also say that guaranteeing that one dollar would be available for each outstanding token is another bold assumption, which leads me to my next analysis point.

While I still want some more nerds to double-check my math here before I display it, I ran a calculation that takes the total circulating supply for a given rebase token at the end of the current runway with the current APY. Then I assume a worst case scenario of $1 token price, which would mean that Liquidity Pools would crash from their current levels so that one pair of stablecoin and rebase token would be valued at $2. Then I add up all the liquidity and risk-free value into a total dollar value and see what the ratio is from that number to all circulating tokens at the end of the runway.

Spoiler alert: Only 3 of the 15 tokens on my list would be solvent and scarily enough, 4 of the 15 tokens wouldn’t even be able to cover 50 cents for every outstanding rebase token. While I know this might induce some panic, I do not think there is a lot to worry about because of the treasuries and depth of liquidity many of these tokens have. Even if we assume a conservative 30% Market Cap/Treasury Value ratio on any given token, the LPs would be deep enough to make most of them solvent. Still, it is extremely dangerous to assume that $1 is a rock solid floor on these projects in a total market meltdown.

As a reminder, the Bludex Score takes into account multiple metrics including valuation, treasury strategy, innovation potential, and risk. Another reminder is that liquidity pools are not taken into account for the RFV. Some thoughts on a few tokens that are catching my eye:

Squid. Don’t be shocked by the last column. $SQUID is really unique in the fact that there are only a couple hundred tokens in existence and they go for a pretty penny. The chance of $SQUID dropping to $1 is zilch considering there are only a couple hundred tokens in existence and they are backed by one ETH. $SQUID still trades at an attractive valuation, is one of the only rebase tokens with non-inflationary treasury growth and a solid treasury strategy.

Wonderland. While the valuation ratio here is still rather high, I’m actually still incredibly bullish on Wonderland. Much of the value of these rebase tokens come from expected future buying pressure and I think we will see more inflows into $TIME than any token on this list. They recently allocated a large amount of their treasury into the UST/Anchor looping strategy, which is a “somewhat safe” ~100% APR on stablecoins. This is by far my biggest bag in the rebase token space.

Fantohm. $FHM has had some very positive price action today. While I’m still trying to wrap my head around the utility of their $FHUD token, their high APY combined with their valuation and long runway make this a very interesting play.

Spartacus. The most beaten and bloodied token on the list. If they were trading closer to their MC/RFV ratio, I would probably exit, but right now the deal is just too sweet to pass up. This appears to be in way oversold territory as they have a somewhat large treasury and extremely safe yield.

Fortress. Fortress has returned, and they are trading at a pretty solid discount with a pretty safe runway and yield.

Papa. While the runway is short and the APY is decreasing as each day goes by, the recent buybacks and proximity to that $1 floor appear to make this a potentially lucrative play. I am eagerly awaiting some progress on their dashboards, especially with their displayed runway so I can bump up some of their metrics.

Otterclam. I must say, I’m impressed with how this community came through in my recent twitter poll. Their interface, NFT rewards, bonding options, etc. make them a simple and enjoyable rebase token with an exceptionally high yield. My only qualm is the current valuation ratio and short runway could make this a bit of a volatile play.

Rome. I think the potential for gamified rebase tokens is absolutely massive and Rome seems to be leading the charge here. I love what they’re doing and the hype is real, but the valuation ratios are absolutely terrifying to me. I need to dig more into how the gamification here could reduce some of the risk.

As always, please feel free to leave any feedback and questions on Twitter (@gsg0127) or here on Medium. I don’t pretend to be perfect and am always looking to learn and engage with the community. If you see something that doesn’t look right, or that there might be some facts I’m overlooking in a project, please feel free to bring it up.

Wishing you and your families a safe, healthy, and prosperous new year!

~Bludex

Disclosures: Nothing in this article should be considered financial advice. I hold $SQUID, $TIME, $FHM, $OHM, $SPA, and $PAPA.