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James Ho Profile picture
@jamesjho_
Apr 1 • 2 tweets • 1 min read • Read on X
Circle earned ~$1.7b revenue in 2024 and paid out $900M+ to @coinbase as a distribution partner

That ~$1B going to Coinbase likely comes with little to no cost/opex to serve. At 10x earnings = $10 B mkt cap and likely contributes ~25% of $COIN valuation

For perspective - @circle is targeting $4-5B valuation for its IPO with ~$300m of 2024 adj EBITDA

Powerful way Coinbase has monetized its brand, platform and distribution...w/ a rev stream less cyclical than its core trading/transactional bizImage
S-1 here

sec.gov/Archives/edgar…Image

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More from @jamesjho_

James Ho Profile picture
May 6, 2023
1/ Arbitrum doing $100m+ in annualized revenue, which net 30-40% margins today (after calldata costs)

Will expand to 90-95% margins after eip-4844 / proto-danksharding

For perspective ETH is doing $3-5bn annualized fees

L2s on path to being incredibly profitable Image
2/ Optimism on similar trajectory with ~$60m annualized fees (roughly half of $ARB run rate)

But both chains today are single sequencer, neither OP/ARB tokens used to pay for gas, nor do they have explicit utility (eg protocol fees, burn)

Trading $8-12b fdv Image
3/ Biggest q for L2 value accrual is not whether substantial fees can be generated - they can and will be very profitable soon

But rather over what time frame will sequencers decentralize and will value be directed towards the L2 token
Read 4 tweets
James Ho Profile picture
Feb 6, 2023
1/ Thrilled to announce our investment in @GammaSwapLabs! They are building a new core primitive in the defi space – monetizing IL/vol and allowing AMM DEX trading to scale by an order of magnitude

Excited to work with this chad team

medium.com/gammaswap-labs…
2/ DEX AMMs have been one of the killer use cases in crypto - with 10% penetration vs spot on centralized venues, and $1Tn+ volume in both 2021/22

Unfortunately their potential is limited due to the significant amount of IL (impermanent loss) that LPs suffer
3/ Estimates put the annual IL suffered by Uniswap LPs in the ~$500M range - resulting in losses on most markout time scales, even when accounting for fees charged

This has limited the amount of liquidity that can exist and be attracted to LP in AMM dex'es
Read 8 tweets
James Ho Profile picture
Jan 27, 2023
1/ Impressive to see @GainsNetwork_io reach ATHs in volumes after their Arbitrum expansion (dec 31st)

$2B in two weeks is a new record. 1.5x volume on arbitrum vs polygon ($1.2b vs 800m)

Increasingly see dapps embrace multi-chain deployments. Many ecosystem here to stay 🤝 Image
2/ Huge number of crypto protocols have expanded to multiple layer 1 chains - Aave, Lido, Curve, Frax, OpenSea, Magic Eden, GMX, Gains, Trader Joe, Ribbon, Sushi, UXD etc

Uniswap recently on its way to BSC

coindesk.com/tech/2023/01/2…
3/ The Ethereum ecosystem remains the strongest, most vibrant by nearly all metrics (TVL, users, defi / nft volumes, fees, developers)

Incredibly bullish with how much rollups have scaled this past year (@Artemis__xyz)

But reality is many other ecosystems can/will co-exist Image
Read 6 tweets
James Ho Profile picture
Dec 12, 2022
1/ Pretty impressive # of protocols building around / stacking on GMX

Delta neutral vaults - @rage_trade @UmamiFinance
Auto compounder - @PlutusDAO_io
Options hedge - @dopex_io @DAOJonesOptions
Risk tranches - @GMDprotocol
Social trading - @STFX_IO

Many more / list goes on
2/ Composability has been one of the super powers of defi

Highly liquid spot DEX markets (Uniswap Sushi Curve) allowed on-chain lending protocol to scale much larger - by allowing for orderly, reliable liquidations

Which further spun the on-chain trading flywheel
3/ GMX has been a real star of the Arbitrum ecosystem. $12B volumes in month of Nov alone, returning $5m in Nov fees to GMX holders (~4bp) via ETH staking yields, and $30m year to date

~$500M liquidity to trade against

Yet the composability flywheel has only just begun to spin
Read 10 tweets
James Ho Profile picture
Oct 22, 2022
A look at Solana NFTs and shift to no/optional royalty marketplaces

Solanart from 0% to 37% of Magic Eden's volume (at peak) back to 0% - all within 2 months Image
Big prize to be won - SOL NFTs have picked up significant momentum this year

Magic Eden currently around 30% of Opensea volumes

~50% on peak week

Started this year at ~0 Image
Despite being only ~1/3 of the volumes, Magic Eden is roughly on par with Opensea for # of weekly traders

100k+ on both platforms, but Magic Eden attracting more incremental new users Image
Read 13 tweets
James Ho Profile picture
Aug 30, 2022
Been long awaited, but Ethereum is rapidly scaling

Arbitrum/Optimism now at ~30% of ETH daily txns

L2 szn is just beginning
TVL across L2s up 130% (in ETH terms) since beginning of year

Dec 31 - 1.6M ETH
Today - 3.6M ETH
Arbitrum / Optimism TVL approaching ~10% of ETH

Big step up in August

Optimism emissions + anticipation of Arbitrum Odyssey / Nitro big tailwinds
Read 7 tweets

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