2) a) Say that you make $5b and have $5b of one-off expenses.
Earnings: $0.
b) Now say your mkt cap goes up from $1b to $50b.
Earnings: $0.
c) Now say you issue $10b of equity at a $50b valuation.
Earnings: $0.
3) d) Say you also issue a token and own all the tokens.
Earnings: $0.
e) Now that token increases from $1b to $50b mkt cap.
Earnings: $0, but $49b of unrealized gain.
f) Now say you sold $10b of the token @ $50b val.
Earnings: $10b!
4) But (f) and (c) are really similar!
Also: (a), (b), and (e) are all really similar. But you get unrealized gains, or equity gains, by issuing equity or tokens that people already knew would go up!
5) What you've done is taken the expectation of future gains, and turned them into something with a market price.
So you sorta-kinda-maybe realize all your future gains now.
6) So, for instance: who's made more in 2021 so far, OKEx or Coinbase?
Well, I'm not sure. I'd guess Coinbase had higher revenue, though--maybe $1b to $500m. So maybe the answer is Coinbase.
BUT -- OKB is up about $3b in market cap this year! And $3b > $500m.
7) But this is kinda weird. OKB is measuring _future_ performance, but Coinbase earnings are _current_ performance.
OKEx gets to add all of its future performance as an (unrealized?) gain because it's made explicit with OKB.
So, ok, maybe the answer is OKEx?
8) But that's silly: the thing that's up the _most_, really, is....
I don't know. The question has multiple types of answers.
11) But, anyway, companies that I'd put up there, depending on definitions:
a) Coinbase
b) Binance
c) Huobi
d) Block.one
e) Chainlink/Ripple/DOT
f) A16Z (owns a lot of CBSE!)
g) OKEx
h) FTX/BitMEX/Bybit/Bitfinex/Tether/DCG/Kraken
i) a bunch of VCs and trading firms
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While some of it is sensitive, I thought I'd share a redacted version of it here.
2) NOT INVESTMENT ADVICE
3) Writing investor updates for FTX is uniquely weird, because so much of the business is publicly available.
If you want to know about our trading volumes, that’s public. If you want to know about our revenue -- well, you can mostly back it out from the FTT burns.