IDOs are picking back up as there is a nice market-wide rally.

One of our clients wanted to propose liquid staking for benefits: stake more tokens = pay less fees, access drops sooner, etc.

However, pure staking directly benefits wealthier users, creating inequality in the economy. This creates a division between the users in Western countries and those in Eastern countries, where the disposable income is vastly different.

So, we added another factor: time.

This comes in the form of a lock up, whereby if you lock up your tokens, you need less tokens to achieve the same tiers. This evens out the playing field.

The valuation delta between rounds means the difference in valuation between the seed, private, public, and whatever other rounds you have. If your seed valuation is $5M but public is $50M, the delta is 10x.

Generally, a delta of 2-5x between the earliest and latest rounds is the standard, with other rounds falling somewhere in-between. But this varies between projects.

The higher the delta, the less happy the later investors are - not because they get a worse deal per se, but mostly because the greater the delta the less need there is for earlier investors to hold tokens for as long.

E.g. If two VCs who got in at $0.10 and $0.50, respectively, want a 10x, the first one only needs to wait until $1.00, which is only a 2x for the latter one; so, the former is much more likely to dump sooner.

Amidst the market-wide rally we're still seeing some major declines in prices for numerous tokens across various sectors.

One of our VC clients asked me why 2 of their GameFi portcos have vastly different market caps: A is on $9M, B is on $250k.

They have similar socials, so here's what we looked at instead:


1️⃣ A has much healthier market depth. -2% depth is $15k, +2% depth is $650. This means is currently 23x more dollars below the price (buy orders) than above the price (sell orders) - likely put up by the team or MM to uphold a particular floor price.

B on the other hand has -2% depth of $130, and +2% depth of $2k. This means there is 15x more sell pressure. It's as if they've given up.

Can be found on CMC if you scroll underneath the chart.


2️⃣ A has much better bag holder distribution. Top wallets own 39%, 20%, 15%, 10%... respectively. A sign of whales, and a real community, that wouldn't dump from tiny pumps.

B has most of its tokens in smart contracts, with the top wallet holding only 1.5%. No real whales, no community, nobody holding the token to the moon.

Can be found on Bubblemaps.

Some of you dmed to clarify: on CMC, you can find the +2% depth and -2% depth, which shows the $ value of all open limit orders (trades that haven't been activated yet) above and below, respectively, the market price.

The +2% depth shows you the sell orders - i.e. if price jumps +2% on a given exchange, then there will be that $ amount of sells being activated; and vice versa for -2%.

The memecoin sector continues to dominate the top returns by a landslide for the third week in a row.

In this dual-token system, delegators could stake ETH (via EigenLayer) and/or EO to earn rewards. To incentivise them to stake EO without any disincentivisation stake ETH (since ETH is better than nothing), we came up with the idea of rewarding ETH stakers in veEO.

EO stakers got liquid EO, ETH stakers got veEO - locked EO with a vesting.

"The great thing about gambling projects is that the house always wins, so integrating a token that can absorb this value creates unlimited buy pressure," - we told to one of our casino clients that raked in 8 figure revenue per month.

One of their ideas was to have 'mining', but it wasn't really mining, just rewards for taking the action of gambling.

Our improvement on this was for those rewards to only be given as an added bonus to gambling winnings, thereby creating the illusion of rewards, undermined by the fact that the house always wins.

The devil's in the details.

VC investment volume picking up, with announcements this week sitting at $908,650,000.

Avg Returns per period indicated since Q1 2024:

17 Jan - 6 Feb = 4.18x
6 Feb - 7 March = 0.82x
7 March - 26 March = 3.88x
26 March - 9 April = 13.74x
9 April - 26 April = 2.72x
26 April - 15 May = 3.8x
16 May - 1 Jun = 1.7x
1 Jun - 18 Jun = 2.63x
19 Jun - 14 Jul = 2.27x
16 Jul - 14 Aug = 1.42x
18 Aug - 23 Sep = 1.52x
Sep 23 - 17 Oct = 1.3x

The trend for IDO interest is clearly in a downward trajectory, wherefore it would be smart to wait for a further increase in interest in IDOs / ICOs before launching utility tokens on Launchpads etc.

With a few exceptions, there have been very few extensively successful project launches over H2 2024, especially compared to H1 2024.

We're finally seeing some green amongst the Top 5 IDOs again for the first time in weeks.

This client wanted to reward users between $12-$31 per month. We ran this against their buy pressure, and calculated 4 scenarios: optimistic & pessimistic, with & without buybacks.

Evidently, they had a tiny deficit of $1.4-$3.8 billion dollars.

Turns out, given their revenues and how the economy worked, they could reward each user about $0.72 per month.

So, we vastly dropped their FDV so that their token wouldn't collapse by 99% post launch.

Most people have a God complex without knowing it.

Amidst IDO returns having shown an increase over the last two weeks more IDOs are lining up for their turn.

Last week BlackRock increased its holdings by 16,000 BTC, a whopping $1Bn at an average price of $66,000. That’s almost 0.01% of Bitcoin's total supply.

We asked ourselves what are the implications of these buys...

1. Bull market around the corner: with such big orders, these buys - followed by other institutional buy pressure - might kick start the long awaited bull run.

2. Trump to win election: it is no secret Kamala is bad for crypto with her proposed unrealised gains tax; this potentially signals BlackRock's faith in a Trump win.

3. Will Bitcoin finally live up to being an inflation hedge: whilst BTC has been pledged as an inflation hedge by many, it has yet to live up to that name as it has shown stronger ties to tech stocks and the S&P than gold. With the US economy showing more signs of weakness, is BlackRock playing long term games by putting its faith in BTC, or are they here for a quick profit?

Average dump sizes are down over the last few weeks, while the top gainers continue to put in 100%+ gains. Bull market is coming.

Incentive alignment is crucial in token economies.

An example of potential conflict occurring is an issue that emerged with MakerDAO on September 2020.

When $DAI holders lost about US$2,500,000 from their vaults on the system due to a hack, a governance vote was held on whether to reimburse the loses with the $MKR treasury. The governors, $MKR holders, decided against compensating the losses.

This shows a clear misalignment of incentives between different token holders and how that can impact the overall ecosystem. Avoid this by designing interlinking incentives.

All the top movers this week presented 2x opportunities, and unlike previous weeks, the list isn't dominated solely by meme tokens.

Stripe acquired Bridge this week for $1.1 billion, marking a significant move to bridge the Web2 and Web3 ecosystems. Overall, the raises have been sky high.