Thread by @tokenmetricsinc

Moonriver (#MOVR) had a solid score of 85% in fundamentals and an 80% in tech on our grading model. Given recent market volatility, we wanted to revisit its investment thesis (not financial advice) and shed color on its valuation. [THREAD] 1/21

Investment Thesis:

1/ Launchpad for Ethereum (ETH)-Based Projects With Complete ETH Compatibility

EVM compatibility makes it easy for ETH-based blockchain developers to move to, expand to, or transition to Kusama to build their respective applications. 2/21

Ease of transition for both developers and users means that $MOVR has broad, built-in network effects and composability from inception. In effect, this means MOVR will grow in tandem with the $ETH and $KSM ecosystems alike. 3/21

2/ ETH Hedge

Slow transaction speeds and high transaction costs are some of the problems plaguing #ETH. 4/21

Although the transition towards Ethereum 2.0 promises to solve these issues via a switch to Proof of Stake and sharding, there is still a risk that these rollouts will either be delayed or create more issues. 5/21

If this worst-case scenario plays out, developers can write smart contracts in Solidity and launch them on MOVR. For most projects, building their own parachain on #KSM is complicated and expensive, so deploying on MOVR is an easier way to access the KSM ecosystem. 6/21

3/ Additional Features and Benefits

$MOVR is just one of the chains on KSM, and it can interoperate (communicate) with 99 other chains that are being built. 7/21

Unlike ETH, Moonriver also has an on-chain governance feature. Any on-chain decisions made by the community can be implemented without the need for any fork. 8/21

4/ Strong Supply Tokenomics

There is no allocation to the founding team, nor any private sales, VCs, or seed rounds that have been conducted at network genesis. Community members will own a majority of the MOVR tokens on the network (see below). 9/21

5/ Strong Demand Tokenomics

On the demand side of Tokenomics, the #MOVR token has multiple uses:
-Supporting the gas metering of smart contract execution
-Incentivizing collators and validators to secure the network 10/21

-Facilitation of on-chain governance
-Payment for network transaction fees (80% of the spent fees will be burned, acting as a deflationary force) 11/21

6/ MOVR Relative Valuation With Other Layer 1s

$MOVR appears to be the cheapest at a fully diluted valuation of $3.2 billion among its peer group. If we assume that its valuation catches up with Cardano (ADA) or Solana (SOL), the ROI potential is 30x and 21x, respectively. 12/21

7/ Taking Total Value Locked (TVL) into account.

Based on this metric, $MOVR seems expensive as it's trading at 33x times the TVL locked in its smart contract. By comparison, ETH is trading at 3x. 13/21

The market is correct in assuming steep growth, as the number of partnerships is growing and the majority of projects are yet to be deployed. 14/21

8/ Market Sizing Relative to ETH

MOVR is a complete ETH-like environment and works with industry-standard ETH tools and dApps, so it makes sense to calculate the target price based on different scenarios of the market share captured by ETH. 15/21

At the current price of $331 per MOVR token and ETH price at $3,000, the market expects MOVR to capture a 0.94% market share. 16/21

We believe that the market is underestimating how much market share MOVR can capture. Recall that MOVR also extends the base ETH feature set with on-chain governance and cross-chain integration. 17/21

We feel it can capture between 6-10% market share of ETH in our base case. This can lead to a 5-10x return from the current price of $330 and a target price range of $2112-3520. 18/21

Based on our analysis above, we assumed that the ETH price is fixed at $3,000. If we assume the ETH market cap expands and ETH price ranges between $4,000-$7,000 while MOVR captures 6%-10% of its market share, we have a target price range of $3,000 to $8,000. 19/21

Verdict

#MOVR ticks most of the boxes in our investment checklist. In terms of the investment thesis, multiple angles and narratives can be played by investing in MOVR. 20/21

Valuation is also fair with 5X to 10X potential.
We believe that at the current price level (not financial advice), R/R remains favorable for this project.

To read our complete deep dive subscribe to
tokenmetrics.com 21/21

We would love to hear your thoughts
@MoonriverNW @derekyoo @Polkadot @kusamanetwork @MoonbeamNetwork.

@derekyoo if you would like to add to this for the crypto community, it will be our pleasure to have you on our Crypto Hot Seat interview show. 🙏