Continue Capital: 10 key things you need to know in the cryptocurrency world
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, such as consensus mechanisms and governance models, are also needed.
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 data of decentralized exchanges (DEX) can more accurately reflect the prosperity of the blockchain ecosystem. In order to obtain a clearer picture, the data of stablecoin exchange trading pairs and L1 token-U/ETH trading pairs should be excluded.
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 foundation of value. This requires the introduction of traditional investment systems and valuation models to more objectively evaluate the value of projects.
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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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