Thread by @QuirkyQwerty_

It’s been slightly over a month since BitDAO raised almost $400M via a public sale (Dutch auction) of its BIT token on MISO. Today, BIT trades at $16.5bn FDV.

Here’s a quick comparison between BIT and FTT which currently trades at $23bn FDV. 🧵1/x

Their value propositions are similar: the tokens benefits from some form of fee-sharing with a centralized exchange.

I chose to exclude BNB here because it’s tricky to isolate BNB’s value due to BSC vs its fee-sharing mechanism with Binance.

2/x

As part of the Bybit Pledge, 2.5bps of futures trading volume on Bybit goes to BitDAO's treasury. (50% of nominal fees on the exchange; maker/taker of -2.5bps/7.5bps)

3/x

This has been ongoing since 15th July 2021, about 63 days now (see bitdao.io/analytics/).

4/x

Similarly, FTT benefits from a buy-and-burn program by FTX. It can also be staked on the exchange for benefits such as fee discounts, airdrops, and access to IEOs.

5/x

Buy-and-burns come from 33% of FTX fees, 10% of net additions to the “backstop fund”, and 5% others.

Historical buy-and-burns can be found here: ftx.com/intl/ftt

6/x

Year-to-date, $145m has been spent to buy and burn 4.8M FTT tokens ($336m at today’s prices). FTX Is on track to buy-and-burn $208m FTT (annualized).

We can treat this as a “special dividend” to FTT holders, similar to share repurchases.

7/x

How much money has gone into BitDAO? For the past 63 days, Bybit contributed an average of $2.8m/day through a mix of 50% ETH, 25% USDT, and 25% USDC.

8/x

Because of ETH’s price gain, the average is closer to $3.3m/day. (To get a more accurate comparison of BIT and FTT I use USD values at the date of contribution.)

9/x

As far as exchange performance goes, both FTX and Bybit are pretty close. The difference between BIT’s and FTX’s cheapness/expensiveness comes from take rate.

10/x

If BIT traded at FTT’s FDV/earnings multiple, it would be worth $123bn (more than 7x today's prices).

11/x

What I find myself asking after seeing the difference in multiples is “why?”. One common reason for such differences in valuation multiples is growth rates. So that’s where I looked.

12/x

I found that the 4Q20 to 3Q21 compounding QoQ growth rates were 54% (Bybit) and 82% (FTX).

According to FTX's PEG multiple, BIT would be worth $82bn (~5x today’s prices).

13/x

Why isn't BIT worth that much then? Here are a few reasons I can think of:

1. Perhaps the market thinks the best is yet to come for FTX’s volumes so it's willing to pay a premium.

2. Perhaps the market's just fading BIT.

14/x

end.