Pima: 10 Key Insights You Must Know in the Crypto World

Author: Pima, Co-founder of ContinueCapital

10 Key Insights

1. MEV is the foundation of long-term value: In the long run, MEV (Maximum Extractable Value) is a key indicator of a blockchain's development prospects. It reflects the scalability, security, and attractiveness of the blockchain to developers and users.
2. TVL is a misleading metric: Total Value Locked (TVL) is often an exaggerated metric because it can be easily manipulated. By inflating the price of L1 tokens, TVL data can be artificially increased.
3. FDV is significant: Fully Diluted Valuation (FDV) is an important metric as it reflects the potential market value of a blockchain project. While it is not perfect, it can provide a rough estimate of the project's scale.
4. Economic security is not reliable: Relying solely on economic security to ensure the stability of a blockchain is insufficient, as demonstrated by the cases of LUNA and ATOM. Other security mechanisms, such as consensus mechanisms and governance models, are also needed.
5. The execution layer is key to value capture: The execution layer is the core of the blockchain, responsible for processing transactions and validating data. Therefore, it is also the primary place for value capture.
6. DEX data better reflects ecosystem prosperity: Data from decentralized exchanges (DEX) can more accurately reflect the prosperity of the blockchain ecosystem. To obtain a clearer picture, stablecoin trading pairs and L1 token -U/ETH trading pair data should be excluded.
7. Focus on developers, not community users: The success of a blockchain project depends on developers, not community users. Therefore, project strategies should revolve around attracting and supporting developers.
8. The U.S. stock market pattern maps to the crypto space: Just like the U.S. stock market, the market capitalization and trading volume in the crypto space may also concentrate on a few leading projects.
9. Business models are crucial: Simply having a large number of users does not guarantee the success of a project. More importantly, it is essential to find a viable business model that converts user value into actual revenue.
10. Value is the foundation of prosperity: The long-term prosperity of blockchain projects needs to be built on a solid value foundation. This requires the introduction of traditional investment systems and valuation models to assess project value more objectively.