"Brainless rush" IEO is caught again? Dig deep into the basic valuation logic of various projects

This article will take you to understand the basic valuation logic of various projects, avoid rushing to the highest point without thinking, and also review and compare the historical performance of Launchpool and Launchpad, and sharply comment on the similarities and differences and speculative posture of these two sectors.

MAV IEO has added a group of losers. Recently, there have been more and more incidents of cheating on the opening results of Binance Launchpad/Launchpool. This article will take you to understand the basic valuation logic of various projects, avoid rushing to the highest point without thinking, and also review and compare the historical performance of Launchpool and Launchpad, and sharply comment on the similarities and differences and speculative posture of these two sectors.

!["Brainless" IEO is caught again? Dig deep into the basic valuation logic of various projects] (https://img-cdn.gateio.im/resized-social/moments-40baef27dd-8846c7625a-dd1a6f-7649e1)

A. Valuation logic

If it is not "meaningless governance tokens" or memecoin, in theory, it is possible to compare the interests of token holders on a large scale, but after all, cryptocurrency is an attention game, and the so-called fundamentals are too important in front of narrative. It is too small, so the valuation is generally based on benchmarking in similar projects.

!["Brainless" IEO is caught again? Dig deep into the basic valuation logic of various projects] (https://img-cdn.gateio.im/resized-social/moments-40baef27dd-5a521be113-dd1a6f-7649e1)

For example, MAV belongs to the DEX track in the DeFi category. The general indicators of DeFi are the more commonly used TVL for evaluating the scale, and the less commonly used total fee income and agreement income for evaluating the earning power. Specifically, there is an additional evaluation business for DEX Scale volume Vol indicator. As for the token itself, there are two indicators of the current market value mcap and the full circulation market value FDV, which correspond to short-term and long-term liquidity respectively.

Refer to the valuation comparison diagram made by @BiteyeCN, which uses TVL or fee income as the business evaluation index, and gives valuation opinions under mcap/FDV respectively. Of course, there are often some tricks behind the data. For example, the problem with MAV using more than a week’s handling fee to evaluate is that MAV’s airdrop + listing on Binance, so naturally there is no shortage of masturbators to brush up the transaction volume, which is naturally inflated.

!["Brainless" IEO is caught again? Dig deep into the basic valuation logic of various projects] (https://img-cdn.gateio.im/resized-social/moments-40baef27dd-c4e39a28c9-dd1a6f-7649e1)

It is also a good way to use more detailed logic and common sense to judge. The price of MAV $0.5+ will cause its FDV to be close to Pancake. No matter how close the relationship between MAV and Binance is, it is not as close as Cake, so it is expected that the price will exceed $0.5 under the blessing of Binance. Reality. The current FDV of DEX Hashflow, which was also released through Binance launchpool before, is around 400M, and the corresponding MAV price is less than $0.2.

So if someone really rushes with "the vision of believing in Binance", $0.5 is obviously far beyond the range that the initial launchpool can support. The current market price of around 0.45 is already a relatively high position.

DeFi projects are more convenient to evaluate because they are partial to applications and have a certain actual ability to make money. However, the important user activity data of public chain projects are basically collected by the wool party, with low reference value, and only one TVL data can barely be seen. Therefore, compared with the data public chain, it seems that the background is more important. This is one of the reasons why VC is so popular in this field. Anyway, a good background seems to be brainless for 10B.

Please refer to the valuation of ARB in our previous years. According to TVL and ecology, we gave a valuation of 2 times OP FDV. However, after the issuance of ARB, the price difference was very large and it was slapped in the face. On the contrary, after such a period of time, the price of OP continued to fall , ARB successfully achieved 2x OP FDV. (7/n)

As for EDU/HOOK, which has no well-known projects on the same track, and is born to be the leader of the track, it is basically impossible to benchmark and rely solely on imagination. The advantage is that the upper limit is the limit of imagination, and the lower limit is zero anyway.

B. FDV is not just a number

FDV = total circulation of tokens*coin price

When evaluating projects, I often prefer to use market value mcap instead of FDV for comparison. However, most of these are due to the low circulation of newly released projects with higher popularity, and it is cheaper to use mcap for comparison. But FDV is much more than just a number.

Take OKX/Bybit/Bitget's three joint IEOs, and SUI, which gave Binance Launchpool free 40M tokens at the door to avoid repeating the mistakes of Blur, as an example, the price has been falling all the way since the opening.

!["Brainless" IEO is caught again? Dig deep into the basic valuation logic of various projects] (https://img-cdn.gateio.im/resized-social/moments-40baef27dd-97029c882f-dd1a6f-7649e1)

Recently, it was revealed that the project side was secretly unlocking and selling coins in advance, and claimed to be a flexible tokenomics. This is the painful process of mcap gradually moving closer to FDV, and the increment will turn into selling pressure.

However, even if SUI is honestly implemented according to the token unlocking plan, its growth rate will be very fast. Benchmarking and short-term hype allowed SUI to have an FDV of 10B+ at the opening. At this time, mcap was <1B, which could barely be supported by market enthusiasm. The price reduction in the process of mcap is also a matter of course.

!["Brainless" IEO is caught again? Dig deep into the basic valuation logic of various projects] (https://img-cdn.gateio.im/resized-social/moments-40baef27dd-95b4aa175a-dd1a6f-7649e1)

C. Launchpool & Launchpad similarities and differences and speculation

Many people call MAV the XX Launchpad project, but in fact it is the Launchpool project. What's the difference between Launchpool and Launchpad projects? Launchpool is given away for free, while Launchpad requires BNB holders to pay for it, which implies Binance’s attitude towards it (13/n)

Especially for projects launched through Binance, it can be said that the implicit support of the Launchpad project is a level stronger than that of Launchpool.

We’ve already discussed Launchpad’s overall rewards data in the tweet below:

This time, we will analyze the following from the perspective of opening market users, analyzing the opening price (average price on the first day), the highest price in history (closing price) and the corresponding FDV, and the return rate ROI of buying ATH and selling at the opening. The left picture shows the Launchpool data, and the right picture shows the Launchpad data. Focus on the median in the last row.

!["Brainless" IEO is caught again? Dig deep into the basic valuation logic of various projects] (https://img-cdn.gateio.im/resized-social/moments-40baef27dd-d5f4618c55-dd1a6f-7649e1)

!["Brainless" IEO is caught again? Dig deep into the basic valuation logic of various projects] (https://img-cdn.gateio.im/resized-social/moments-40baef27dd-558b647307-dd1a6f-7649e1)

From the historical data point of view, the performance of the previous Lauchpool project is far worse than that of the Launchpad project. Assuming buying at the average price of the first day and then selling at ATH, the median rate of return for Launchpad is 2.9 times, while Launchpool is only 1.9 times.

In addition, Launchpool has two projects that are at the peak of their opening, and they have been used until now after buying them. This situation has not yet occurred with Launchpad (of course, the data of the average price on the first day of opening is convenient for horizontal comparison, but it cannot reflect the whole picture. EDU is currently bought on the opening day. There is a high probability that the entry is still in a locked state).

As for the reason, we can observe that in terms of FDV ATH, Launchpad and Launchpool are actually close to 1.9B, but Launchpool's first-day FDV median of 780M is much higher than Launchpad's 460M.

This is mainly due to the liquidity problem of Launchpool. Launchpad generally gives about 5% of the share, while Launchpool generally gives less as free coins, generally less than 2%. Although the opening price of Launchpool is inflated, since most BNB holders sell directly at the opening, the higher the opening price is, the more beneficial it is for BNB holders, so Binance naturally does not have much motivation to distinguish this point.

For investors, the long-term game value of Launchpool is obviously lower than that of Launchpad, so for Launchpool projects, it is necessary to do a valuation analysis and be more conservatively prepared, and it is easy to get stuck if you hold it without brainstorming for a long time.

If you are too lazy to estimate, refer to the median first-day FDV of Launchpad 460M. Once the opening FDV of Launchpool application projects exceeds this value, the probability of subsequent high returns is actually not very high.

Summarize

Using similar projects to benchmark is the most common valuation method. The performance of Launchpool’s projects is not as good as that of Launchpad. Due to liquidity problems, currency prices are often inflated at the opening, so more caution is required. Launchpool has a small number of openings and peaks that have been set until now, while Launchpad has basically never been completely set.