a hierarchy of metrics: 1. net profit (the E in P/E ratio) 2. gross profit (profit before OpEx aka salaries etc) 3. protocol revenue (portion that does or can accrue to tokenholders) net of incentives 4. revenue (protocol revenue + cost of revenue aka LP yield) 5. volume 6. TVL
here is how analysis on protocols can be improved:
A1. be aware that 6/5/4 are easily gamed, and when making comparisons across protocols, endeavor to measure real protocol revenue net of incentives (3)
this might require looking at an unincentivized period or segment
Dec 3, 2022 • 7 tweets • 2 min read
Eth net supply growth does NOT mean the network's value accrual (i.e. fee burn minus outlays) is 'unprofitable' for tokenholders in aggregate
It just means it's 'unprofitable' (very slightly) for unstaked Eth holders
Quick thread to elaborate:
Fee burn (post EIP-1559) is a value accrual method. Supply goes down + marketcap flat -> price goes up
Inflation from staking would seem like the opposite effect, but it's mostly not: 2/6
Sep 26, 2022 • 26 tweets • 5 min read
Lots of pessimism about crypto right now
Price reflexivity & overindexing on the present make us overly reactive both ways. Overly euphoric in good times, overly pessimistic now
We should reason out what's powerful about on-chain apps, predict the future & act accordingly 🔮 1/
I'm optimistic about crypto & extremely confident that decentralized computation will better everyday people's lives
💪
Why? Bc it allows devs to stack innovation, building up sophisticated apps from simple primitives & open APIs. Speed of innovation is what matters
2/
