I adapted the title from this extremely illuminating article by Kyle Samuni.
I actually hesitated about sharing these scared texts. The less people in the markets know, the easier it is for me to profit at their ignorance. But good ol’ GMGH got your back (and already has taken up positions in whatever he wanted). Here’s me dropping some free knowledge bombs to blow your mind. To my faithful readers with their own functioning brain, I hope you enjoy this brain digest.
First up is this is an EXCELLENT post by Tony Sheng. Very brief, but very good.
Credits: Tony Sheng
To cut a long story short, this is almost the exact same framework that I have been subconciously using to evaluate ICO projects and even post ICO projects. He verbalized these ideas and put it very nicely in a framework, so I’m quite glad to have read this very short, but concise article about utility tokens.
FYI, 95% of utility tokens are worthless pieces of shit. High chance that most of yours are crap. 95% chance that a token isn’t even required in the project and it’s just forced into the ecosystem so that there is justification to create a token. So that they can sell it to you.
If you want to know why utility tokens are usually crap (hint: I believe that it has to do with velocity), you can take a read on this article also by Kyle. It is a bit more high level, but still readable and understandable.
TL;DR – “Most utility tokens don’t provide a compelling reason for token holders to hold the token for more than a few seconds. Absent speculation, assets with high velocity will struggle to maintain long-term price appreciation.”
The only missing piece to these great articles in fulling fleshing out your own framework is: valuations. While easy to conceptually understand (buy stuff cheap and sell it expensive), I myself haven’t come across a really good valuation module to fit into framework (although I have read a lot of different takes on the subject). It’s more art than science at this moment for me.
To my own credit, I have done well from every single ICOs that I have ever taken part in. I’m also doing rather well for my overall crypto portfolio. But take my blog articles and the ones I share for what you will – you are the final judge to what opinions you decide to keep and the executor of the decisions that you make.
For all the crypto skeptics out there, continue believing that crypto is all about “luck”, “hype” and “getting in early at the top of the pyramid”. For the crypto believers, research and study hard and don’t buy nonsense crypto. If making money will give you enough validation, this would be how you go about to do it.
As a side note, Multicoin Capital pumps out great articles from a fundamental perspective, I’d encourage anyone looking for a healthy alternative perspective to give all their articles a read.