Continue Capital Matcha: 10 Key Cognitions You Need to Know in the Crypto World

2024-07-11 05:58:07

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10 Key Cognitions

MEV is the foundation of long-term value: In the long run, MEV (maximal extractable value) is a key indicator for measuring the development prospects of a blockchain. It reflects the scalability, security, and attractiveness to developers and users of the blockchain.
TVL is a misleading indicator: Total Value Locked (TVL) is often an exaggerated metric because it can be easily manipulated. By pumping up the price of L1 Tokens, TVL data can be artificially inflated.
FDV is of great significance: Fully Diluted Valuation (FDV) is an important indicator because it reflects the potential Market Cap of a blockchain project. Although it is not perfect, it can provide a rough estimate of the project’s scale.
Economic security is not reliable: It is not enough to rely solely on economic security to ensure the stability of the blockchain, as the cases of LUNA and ATOM have shown. Other security mechanisms, such as Consensus Mechanism and governance models, are also needed.
The execution layer is critical to value capture: The execution layer is the core of the blockchain, responsible for processing transactions and verifying data. Therefore, it is also the primary site for value capture.

6.DEX data can better reflect the prosperity of the ecosystem: The data of Decentralized Exchange (DEX) can more accurately reflect the prosperity of the blockchain ecosystem. To obtain a clearer picture, the data of Stable Coin exchange pairs and L1 Token -U/ETH trading pairs should be excluded.

follow developers, not community users: The success of Blockchain projects depends on developers, not community users. Therefore, project strategies should revolve around developers, attracting them and providing support.
Mapping the pattern of the US stock market to the crypto world: Just like the US stock market, the Market Cap and Trading Volume of the crypto world may also be concentrated in a few leading projects.
Business model is crucial: Having a large number of users alone does not guarantee the success of a project. What’s more important is to find a viable business model that can turn user value into actual revenue.
The value is the foundation of prosperity: The long-term prosperity of Block chain 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 assess the value of the project.

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