Thread by @JackNiewold

With a circulating market cap of just $16 million, Vesta ($VSTA) has managed to grab an insane amount of attention on Crypto Twitter.

The bull case? It's got the most stacked list of angel investors you've ever seen.

The bear case? The FDV is about $500 million.

My thoughts👇

With a circulating market cap of just $16 million, Vesta ($VSTA) has managed to grab an insane amount of attention on Crypto Twitter.

The bull case? It's got the most stacked list of angel investors you've ever seen.

The bear case? The FDV is about $500 million.

My thoughts👇

Well, maybe not.

When a protocol has this much VC action, its often assumed that people got in early at ludicrously low valuations.

The token becomes available to the public, and even if it drops in price, VCs can still make a killing

Then we've got the whitelist.

Anyone who got on the whitelist had the opportunity to pick up tokens at a discounted price.

500,000 tokens were sold to this whitelist, all of which are unlocking today.

These retail investors are dumping today, $VSTA is down 12%.

All of these tokens bought at below market price! Now valuing the protocol at $500,000,000! Absolutely ludicrous!

Well, maybe not.

We've got to understand that, while fully diluted value is at a wild $500,000,000, there are still less than 10% of tokens floating around

So even though we're facing a huge FDV once tokens unlock, there are two factors at play:

• Anyone with tokens locked still has incentives to make price go up (ahem, all these well-connected angels)

• Anyone who wants to buy tokens is competing for this small pool of tokens.

It's all about supply and demand.

FDV could sit at $13 trillion but if there are only $5000 of tokens available to be sold, and there is demand, price will simply go up.

FDV doesn't matter for that market dynamic, only the liquidity of the token.

Meanwhile, the angel allocations don't start unlocking for another 6 months.

So as long as you monitor those outstanding tokens, you can invest (relatively) safely.

Just make sure you don't become exit liquidity.

My main point isn't around Vesta or angels or any token, really.

My point is that circulating market cap isn't everything, nor is FDV.

These systems are complex and dynamic--EVERYTHING must be taken into account.

I don't know how this will play out, not at all. But anyone simply shouting 'FDV' or 'Angels' is looking at just a tiny piece of a multidimensional picture.

It's always important to recognize ALL of these dimensions. A good thesis is always multifaceted.

I was talking to .@knowerofmarkets this morning who inspired me to write this thread in public, instead of in DM form.

Give him a follow, he's a tremendous writer and a .@cryptoprag collaborator.