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Cookies ResearchCoW Swap: Intents, MEV, and Batch Auctions
Low Fees and MEV-Resistant Trades: Made possible through intent-based architectureSpecial thanks to Anna and Alex for feedback and input on CoW Swap and its novel design mechanismsKey TakeawaysCoW Swap is an intent-based application that allows users to leverage signed messages to express their intent to trade (e.g. swap token A to token B)A batch auction mechanism is utilized, in which a network of solvers compete amongst each other to maximize user orders surplus, via Coincidence of Wants (...
Cookies Research1inch Fusion: Cost-Efficient, MEV-resistant Swaps
Key Takeaways1inch Fusion offers users the most favourable swap rates while being MEV-resistantA dutch auction model is utilized, where the swap rate is decreased over timeOrders are filled by resolvers, which are professional market makers, to give the best ratesUsers get to swap gas-free, as gas is paid by the resolversWhat is 1inch?1inch is a decentralized exchange (DEX) aggregator that aggregates liquidity across the various DEXs. This contributes to deep liquidity on 1inch, offering user...
Cookies ResearchMonad: Highly Performant, Parallelized, EVM Compatible L1
Summary thread available here.Key TakeawaysHigh Performance | Solid stats 10,000 TPS. 1 second block time. 1 second finality.EVM Compatible | Building is a piece of cake Full EVM Bytecode Compatibility: Applications built for Ethereum can be deployed on Monad with no code changes Full Ethereum RPC Compatibility: User-facing infrastructure (e.g. MetaMask) can be used seamlesslyUnique Architecture | The core to high performance 2 main fundamental architecture employed by Monad to allow for high...
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Cookies ResearchCoW Swap: Intents, MEV, and Batch Auctions
Low Fees and MEV-Resistant Trades: Made possible through intent-based architectureSpecial thanks to Anna and Alex for feedback and input on CoW Swap and its novel design mechanismsKey TakeawaysCoW Swap is an intent-based application that allows users to leverage signed messages to express their intent to trade (e.g. swap token A to token B)A batch auction mechanism is utilized, in which a network of solvers compete amongst each other to maximize user orders surplus, via Coincidence of Wants (...
Cookies Research1inch Fusion: Cost-Efficient, MEV-resistant Swaps
Key Takeaways1inch Fusion offers users the most favourable swap rates while being MEV-resistantA dutch auction model is utilized, where the swap rate is decreased over timeOrders are filled by resolvers, which are professional market makers, to give the best ratesUsers get to swap gas-free, as gas is paid by the resolversWhat is 1inch?1inch is a decentralized exchange (DEX) aggregator that aggregates liquidity across the various DEXs. This contributes to deep liquidity on 1inch, offering user...
Cookies ResearchMonad: Highly Performant, Parallelized, EVM Compatible L1
Summary thread available here.Key TakeawaysHigh Performance | Solid stats 10,000 TPS. 1 second block time. 1 second finality.EVM Compatible | Building is a piece of cake Full EVM Bytecode Compatibility: Applications built for Ethereum can be deployed on Monad with no code changes Full Ethereum RPC Compatibility: User-facing infrastructure (e.g. MetaMask) can be used seamlesslyUnique Architecture | The core to high performance 2 main fundamental architecture employed by Monad to allow for high...
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Restake Finance is a liquid restaking token (LRT) protocol, serving as a front-end of EigenLayer to allow for ease of restaking. To learn more about Restake Finance, refer to this tweet here, and to understand the basis of EigenLayer and restaking, refer to this.
In this article, I bring you through the framework I used to value the FDV of Restake Finance ($RSTK).
Disclosure: Author holds $RSTK. Nothing expressed in this article is considered as financial advise. These are just the author’s thoughts and personal views.
Note: Calculations in Appendix
Project the growth in LST TVL over the year of 2024
Calculate the current LRT TVL / LST TVL ratio - 3 scenarios
This ratio is taken as the bear case for the TVL that LRT protocols can achieve
The neutral and bull case are taken as 5% and 10% respectively - Speculating that the proportion of staked ETH that gets restaked will increase over time
Calculate the potential market share that Restake Finance can have - 3 scenarios
The current LRT market share distribution is taken as the bear case for Restake Finance’s market share - Calculated by taking mainnet and testnet figures
The neutral and bull case are taken as 5% and 15% respectively - Speculating that Restake Finance will be able to attract a higher volume of staked ETH compared to other LRT protocols
Calculate Restake Finance’s revenue in each of the cases
Revenue = 5% x EigenLayer Yield x Restake Finance’s Market Share
Note: 5% is the revenue cut that Restake Finance takes from the yield to users
There will be 9 distinct annualized revenue
Calculate weighted revenue for various Restake Finance market share scenarios
Calculate weighted revenue for various LRT / LST ratio scenarios
Once this step has been completed, there will be 1 single annualized revenue
Find industry P/S ratio
Using the LST market as a proxy
Industry P/S ratio = Avg weighted (individual LST protocol P/S ratio x market share)
Find Restake Finance valuation
Industry P/S ratio x Restake Finance’s annualized revenue
The eventual valuation I calculated for Restake Finance = $310,346,354
Current Restake Finance FDV = $220,000,000 (as of 11 January, 2024)
This projected FDV corresponds to a price of $3.24.
Hence, it can be argued that there is still growth potential for $RSTK.
It should also be noted that the valuation for Restake Finance can be even higher should we factor in additional yields, as it would increase its revenue. For example, AVS might incentivize restakers on Restake Finance to secure their protocol by offering extra yields to a particular vault (something similar to Curve wars).
In addition, the calculations were done over a 1-year period. Extrapolating it over a longer period of time will likely yield much higher annualized revenue.
To meme it, we apply a 3x multiple because of:
(a) 1st liquid restaking token to be launched
(b) Hype from the launch of AVS
And that would be a price of $9.72. NFA. I’m a Cookie that can’t count.
Restake Finance is a liquid restaking token (LRT) protocol, serving as a front-end of EigenLayer to allow for ease of restaking. To learn more about Restake Finance, refer to this tweet here, and to understand the basis of EigenLayer and restaking, refer to this.
In this article, I bring you through the framework I used to value the FDV of Restake Finance ($RSTK).
Disclosure: Author holds $RSTK. Nothing expressed in this article is considered as financial advise. These are just the author’s thoughts and personal views.
Note: Calculations in Appendix
Project the growth in LST TVL over the year of 2024
Calculate the current LRT TVL / LST TVL ratio - 3 scenarios
This ratio is taken as the bear case for the TVL that LRT protocols can achieve
The neutral and bull case are taken as 5% and 10% respectively - Speculating that the proportion of staked ETH that gets restaked will increase over time
Calculate the potential market share that Restake Finance can have - 3 scenarios
The current LRT market share distribution is taken as the bear case for Restake Finance’s market share - Calculated by taking mainnet and testnet figures
The neutral and bull case are taken as 5% and 15% respectively - Speculating that Restake Finance will be able to attract a higher volume of staked ETH compared to other LRT protocols
Calculate Restake Finance’s revenue in each of the cases
Revenue = 5% x EigenLayer Yield x Restake Finance’s Market Share
Note: 5% is the revenue cut that Restake Finance takes from the yield to users
There will be 9 distinct annualized revenue
Calculate weighted revenue for various Restake Finance market share scenarios
Calculate weighted revenue for various LRT / LST ratio scenarios
Once this step has been completed, there will be 1 single annualized revenue
Find industry P/S ratio
Using the LST market as a proxy
Industry P/S ratio = Avg weighted (individual LST protocol P/S ratio x market share)
Find Restake Finance valuation
Industry P/S ratio x Restake Finance’s annualized revenue
The eventual valuation I calculated for Restake Finance = $310,346,354
Current Restake Finance FDV = $220,000,000 (as of 11 January, 2024)
This projected FDV corresponds to a price of $3.24.
Hence, it can be argued that there is still growth potential for $RSTK.
It should also be noted that the valuation for Restake Finance can be even higher should we factor in additional yields, as it would increase its revenue. For example, AVS might incentivize restakers on Restake Finance to secure their protocol by offering extra yields to a particular vault (something similar to Curve wars).
In addition, the calculations were done over a 1-year period. Extrapolating it over a longer period of time will likely yield much higher annualized revenue.
To meme it, we apply a 3x multiple because of:
(a) 1st liquid restaking token to be launched
(b) Hype from the launch of AVS
And that would be a price of $9.72. NFA. I’m a Cookie that can’t count.
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