The Best of the Rest - Messari's Unqualified Opinion #11

Fred Wilson gave us a shout-out, and Vlad plays crypto politics

Messari’s Unqualified Opinions #11

Hot damn, we’ve got some growing pains.

Onboarding a few new folks this month and nailing down our product roadmap before I (TBI) disappear on paternity leave for the rest of October. Ergo, we’ve pushed our features (a double from yours truly) to Wed-Thurs this week, and invested our time today in some meaty summaries we didn’t want you to miss. From Fred Wilson, Vlad Zamfir, Tony Sheng, and “Must Stop Murad” Mahmudov.

In the meantime, we also just dropped a beautiful new home page. BIG things are coming this Q4 from the good guys (us) for the good guys (you).


P.S. Smash those share and subscribe buttons, and spread the love. Tweet at me or Messari for feedback, comments, or (more?) questions.

The Best of the Rest (4 minute read)

A curated list of last week’s best posts from other crypto analysts.

Fully Diluted Market Value- Fred Wilson

Fred Wilson writes about the concept of future dilution - something we understand well from options and warrants in securities markets - and discusses its importance in crypto. As Fred notes, “There are many crypto tokens trading in the market that have a relatively small amount of their total supply outstanding and the market value numbers on many of the sites that track this market are a bit misleading.” I swear to god we didn’t ask him to do this, but he references our OnChainFx “Year 2050 Market Cap” metric as a good proxy for “fully diluted” market value. Something more investors must focus on when thinking about value, upside, and dilution. (Source)

We agree, Fred. We need more robust metrics and filtering tools. Here’s a look at how much variance there is amongst the top 25 crypto assets in terms of total supply issued. We filter out “losing” ledger forks (bye bye BCH, ETC), and only including assets with $5mm+ in daily volume - Tezos and Decred get the boot).

Here’s that custom view (and a link to create your own!)

  • Only 13% of Stellar is outstanding vs. 83% of Bitcoin.

  • ZCash is outside of the top 20 on CMC, but top 10 when looking at Y2050.

  • Binance has 144% of it’s Y2050 supply outstanding. Not a glitch. Any guesses why? Hit us up with the correct answer and we’ll shout you out tomorrow for being a genius.

Anyway, there’s a lot we can do to improve crypto metrics, and we’re moving as fast as we can to help.

Bitcoin Market-Value-to-Realized-Value (MVRV) Ratio — Murad Mahmudov and David Puell

Speaking of better metrics, Murad and David explore the logic behind using “realized value” to normalize crypto market caps. They define realize value as the aggregate USD market value of bitcoin UTXOs price at the time those UTXOs last moved. (Instead of counting all mined coins at equal, current prices.) The MVRV Ratio is simply the ratio of daily market value over realized value. According to the authors, MVRV appears to track the interaction between the market concepts and participants that best describe the boom/bust dichotomy. This is still gameable (are the referenced exchange orders real or spoofed?), but it’s a step in the right direction. (Source)

Blockchain Governance 101 - Vlad Zamfir

Vlad writes about blockchain governance and the process in which decisions get made in decentralized protocol development. It’s an interesting take on the need to “play politics” in crypto: “Blockchains are governed, and blockchain governance outcomes will be driven by the politics of participants in the public blockchain space.” Vlad dissects various blockchain governance outcomes:

  • Autonomous Blockchains - uncontrollable and very hard to change (dystopian - “I am not going to go willingly into a future where sociopathic code is law.”)

  • Blockchain Governance Capture - plutocratic rule by some winning group (“it’s obviously contrary to the public interest to allow [any] true public utility to be owned by anyone (or any cartel).”)

  • Internet Censorship as Governance - code gets 100% censored (this is the baby out with the bath water scenario: “internet censorship is what we deserve if we allow blockchains to be autonomous.”)

  • Governance via Public International Law or Diplomacy - the UN or NAFTA for blockchains. (Ewww.)

  • Governance via International Private Cooperation - like the internet has been built to date (ICANN, IETF, WC3, IGF are examples Vlad cites).

My take? The ideal result is some combination of Autonomous Blockchains, with International Private Cooperation…let these things run on auto-pilot where possible, but have reasonable and ethical people mind the shop for catastrophic failures.

Fascinating discussion here: (Vlad’s original post, a good rebuttal, and then Vlad’s forceful double down.)

Is (just) some privacy worth anything?—- Tony Sheng

Tony mulls over the relationship between privacy considerations and personal freedom in his latest post, arguing that: 1) as a society, we should seek systems that can increase personal freedoms and equality of opportunity; 2) surveillance, which is the unappreciated cost of networks that aggregate data on individuals, marginalizes groups; 3) Private systems that allow disclosure can lead to marginalization via unraveling; and 4) concerns over the ‘half-measures’ in the crypto industry (for example, A web3 stack that has privacy layers, but identifies users or their actions at other layers doesn’t seem private at all). (Source)

Happy Monday!

Did I miss something?

Send me the link, your twitter handle and your best imitation compression algorithm write up. If I like it, I’ll include your bit next issue (with attribution).

Community Updates

Podcast Recap

🎧 ICYMI, we also host & produce our own podcasts on Spotify, iTunes, and Google Play. In our latest episode, Katherine was on the ground at Crypto Springs and interviews a number of speakers and attendees about their experience at the much-talked about conference.

Listen on Apple Podcasts here, Spotify here, Soundcloud here, and Google play here. Happy learning!

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