Was asked an interesting question by an old crypto friend: he noted that I seem to assess some projects like mobilecoin very differently than others (in this case, Dash). In some cases I seem to care about the concentration of token ownership, but not in others. /1
2/ I assess companies and cryptocurrencies very differently depending on what they're trying to be and their target use case. For example, if you're valuing a local restaurant, you probably won't spend much time on their software or global brand.
3/ for a proof of stake network, the distribution of coin ownership is paramount, since that's what is literally securing the network. Ownership distribution is important but far less so for a PoW network.
4/ in this specific example, the question is why I give mobilecoin a pass for its extremely concentrated ownership and relatively high operational centralization. Simple - because the target use case is primarily (or at least initially) a private payment rail;
5/ I'm judging every aspect of the project through that lens. Similarly, bitcoin is competing to be (at least primarily and initially) a secure settlement layer that supports a depreciation and censorship resistant asset. While it's feature-poor and very slow moving, that's ok.
6/ for a liquidity protocol like 0x, I'm going to focus on very different metrics. There - my assumption is that anything that exists today is a work in progress, and that continuous innovation will be necessary. So I focus on the strength of the team and their roadmap.

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More from @AriDavidPaul

19 Apr
Bayes theorem is the heart of a great deal of practical probability. Imo, it should be taught in late middle school, and statistics/probability should replace calculus as basic math education after arithmetic. /1
2/ I probably use calculus once a quarter in my work (which includes a good ideal of applied math, derivatives modeling, quantitative portfolio management and risk assessment etc.). I use Bayes theorem *daily* both in work and in day to day life.
3/ Bayes theorem comes up constantly. I use it when I’m evaluating which vaccine to get, what hospital and medications to trust, interpreting political polls and policies, and even whether to take an umbrella to work.
Read 5 tweets
12 Apr
"Every musician wants to be a comedian." <- a profound recruiting insight that I've learned the hard way. A thread. /1
2/ the quote references the idea that many musicians enjoy chatting up an audience in between sets. For some, it's not enough to be great at what they do (musician), they want to be involved in many things (general entertainment). It's the generalist vs specialist dilemma.
3/ Founders are often generalists, and generalists play a critical role in many organizations helping to synthesize and "see the forest for the trees." But an organization of nothing but generalists inevitably fails. Excellence in most areas requires specialization.
Read 6 tweets
6 Apr
Crypto currently offers basically no economies of scale. I.e. with the same skills, a professional trader/investor will earn a far, far higher ROI running a smaller amount of their own money than launching a fund. /1
2/ fund management also brings it with expenses and headaches on the operational, legal, compliance, accounting, HR etc side of things. Join a fund if you want to learn, gain access to tools/platform, and moderately diversify economic exposure.
3/ launch a fund if you have the team/skills necessary (not just investing but ops, marketing etc), and want to spend 5+ years in an entrepreneurial grind to build a company.
Read 4 tweets
5 Apr
Paradox #15: Braess's paradox - adding roads may slow down traffic. This is really two separate paradoxes. /1
2/ A. empirically, people seem to target a specific work commute time. If you relieve traffic congestion, people move further away to retain the same commute time, likely because the greater distance gives them a higher quality of life in other ways, like cheaper real estate.
3/ so you could say that adding roads doesn't do anything...but in this framing it does. It may not reduce commute times, but it's still adding value to peoples' lives. Effectively those extra roads let people get cheaper rent or prettier home surroundings.
Read 6 tweets
24 Mar
The scope of regulation over anything and everything is mindboggling. 2 years ago, BlockTower held an analyst competition where we gave away $30k of BTC in prizes for the best investment analysis submitted. We had to review state by state regulation on "lotteries", and /1
2/ prohibit participation from many countries and states. This kind of thing comes up everywhere. Want to sell an NFT? Depending on how you're doing it, it falls under dozens of local and federal regulations (mostly irrelevant to individuals.)
3/ we're going to continue seeing the centralized/decentralized bifurcation as a regulatory arbitrage. The cost savings of being an "anonymous" founding team is enormous. (worth noting though, anonymity rarely lasts). Doing anything as a regulated business basically requires
Read 7 tweets
22 Mar
Are NFTs securities? No, by default. In some specific cases, yes, depending on what they are and how they're marketed. (I'm not a lawyer, may be wrong.) /1 itsartlaw.org/2019/11/19/fra….
2/ Remember the howey test? Same test applies to NFTs. Does an artist selling a work of digital art in NFT form constitute a security? Usually no. It's not an investment in a common enterprise, and generally it's not marketed with an expectation of profit.
3/ Can NFTs be securities? Sure. If a work of digital art is marketed as an investment for profit and if that profit expectation depends a third party promoter's efforts, and if the investment itself can be interpreted as in a common enterprise, than it may be a security.
Read 4 tweets

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