Thread by @jdorman81

Here's the problem. #DeFi can be valued based on cash flows. $BTC $ETH & layer 1s can not be. When something can be valued, it also creates a theoretical ceiling. That's why VCs often tell startups not to generate revenue - b/c once you have revenue, the valuation model changes.

https://twitter.com/twobitidiot/status/1347242118645952513

That's why 80% of the Top 25 digital assets by market cap are such a joke, dominated by Layer 1s and cryptocurrencies with almost no chance of success - because this industry was founded by a VC mentality of "huge upside, low probability of success, but no way to prove me wrong"

$ETH and $BTC have already proven to be successful -- whether they are cheap or expensive is hard to know, but they have undoubtedly succeeded. Many DeFi tokens are definitely cheap, but price gains are somewhat limited by current revenues or multiples on future revenues.

I prefer valuation approaches. Gives me a higher degree of confidence, & higher downside protection. Assets like $NXM $FTT $HXRO $GNO $YFI $UNI

Buyers of tokens like $XTZ $ADA $LTC $XRP or $TSLA equity are basically saying "You can't value it, therefore it can't be expensive!"