In yesterday's article, I shared the investment value of Uniswap from the perspective of future free cash flow.
I wonder if readers have noticed a phenomenon:
If we view the market value of the Uniswap Token as the market value of its equity (stock) assets, considering the "stock" market value to be this price, and then comparing this "market value" with its intrinsic value to assess Uniswap's investment value, this method of measurement and comparison is still reliable.
After summarizing these data and seeing the results, I thought about the following points:
First: In the crypto ecosystem, most participants (including myself) subconsciously view these tokens as equity assets ("stocks") of such projects. This is because the token price trends and various phenomena reflected are very similar to stocks.
However, now, when actually investing, I step out of this subconscious mindset and return to common sense. Because these tokens are not stocks, their actual equity is far less than stocks, so these tokens are not worth the pricing given by the current market.
On the other hand, we must also note that the market is often irrational. During irrational times, the market will have its own "narrative" and give any asset an apparently "irrefutable" high price. But in the long term, the market will eventually return to rationality and essence, recognizing the truth.
From a long-term investment perspective, I will be extra cautious when buying such tokens in the future, treating them as collectibles or commemorative items, rather than equity assets.
Second: In the crypto ecosystem, evaluating projects using future free cash flow is appropriate and suitable.
From the Uniswap case, even if we are not buying real stocks but tokens wrapped with a layer of "equity" nature, we can still use this method to assess whether the token price is reasonable.
Furthermore, to accurately evaluate a project's investment value using this method, ultimately, we must see the project's real financial data, whether on-chain or off-chain. In short, I want to see its total assets, total liabilities, total revenue, total expenses, net profit, free cash flow...
Even if these data are not visible in the short term, I will approach the investigation from a financial perspective, rather than just listening to its story or looking at a randomly written page of Tokenomics.
Third: For future crypto ecosystem projects to reach the masses, especially big capital and institutions, to introduce truly large-scale external investors, there are probably only two paths. One is to issue assets with actual utility similar to "commodities"; the other is to issue assets with real equity value.
The first path is easy to understand; the second is a bit complex.
Here, we will focus on the second path.
In the current crypto ecosystem, some venture capitalists invest in crypto projects and also receive project tokens.
I have always been curious whether these VCs receive assets from the project side other than tokens.
Do they merely receive tokens with only governance functions, just like our airdrops?
Uniswap received investments from some heavyweight VCs in its early stages. Do these VCs only have UNI tokens without other benefits?
If they only have UNI tokens with just a governance voting function, they can only stare blankly at Uniswap's nearly $5 billion in net profit over the years. Such an investment seems very uneconomical to me.
There is very little information about this in the market, and we cannot definitively know.
But I believe that truly pragmatic investors will definitely target truly valuable assets. As time goes on, the attributes and definition of such tokens for a project will become increasingly clear, and their prices will increasingly return to their essence.
