Live From DAS: Building Empirical Valuation Frameworks For Digital Assets
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I think all of the l 1 tokens have to be money for them to work, and the moneyness for a token, I just say, is the same as the PE evaluation on a stock, and that's assuming that fundamentals matter.
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up, everyone? Thanks for joining us today. We're gonna be chatting about a, top, like, my favorite topic in crypto because it's so controversial in analyst circle circles its valuation. And we have two kind of experts on that topic here with us today. Do you guys just wanna do quick brief intros, tell us about, you know, what you're doing in your firm? Sure.
Everyone, my name's John. I'm one of the two cofounders and partners of DBA. Pretty, I'd say, traditional, venture fund. Primarily we do private venture deals. We also do some liquid in there, that looks similar profile of, like, typical, very concentrated book, long term investments. A lot of we do we're generalist across different sectors, but in practice, we end up a lot particularly infrastructure focused, low level stuff.
Hey, everyone. Matthew Siegel at VanEck. Run the crypto research and manage one of our, token strategies. At VanEck, we have venture early stage venture strategy. We have liquid token strategies, and we have active equity strategy that's, should soon come to market. So we're involved kind of across the whole life cycle. We also have a stable coin, and an NFT platform. Yep. That's us. Awesome.
Thanks, guys. So I guess just, like, kind of level setting here, when I I when I, you know, look at what both of your firms do and like from the perspective of a crypto native person, like, I would say VanEck is more on the TradFi side just historically, you know, very traditional firm. We have DBA, which is very crypto native. So like two kind of like polar perspectives here on how we tackle valuation in crypto. And I guess just like level setting, you know, Bitcoin historically has been viewed as a commodity or money. We now have thousands of tokens that are trading all with different tokeno
So while we are the crypto native side here, I'm I'm also I'll call myself reformed TradFi. Came from a traditional banking background was actually how I started before coming into crypto. So certainly at least colored by that, by I mean, at at least to me, what we spend, I'd say, like, a reasonably meaningful amount of time on compared to a lot of other investors is definitely, like, thinking about valuation frameworks and just like what, like, what are the fundamentals of a lot of these assets. And so while this isn't going to end up being, you know, you have a very specific cash flow model
I I used to say that crypto token prices were based half on fundamentals and half flows. I'm I've reformed those views. I think it's, you know, 90% flows and 10% fundamentals. And you can see that in, you know, the market cap of XRP versus Ethereum and just look at how much economic activity goes across Ethereum versus XRP. Like, the market cap should not be the same, but they are. So you have to, I guess, respect the tape. One adjustment that we've made to reflect that is just being even more selective in what judicious on that and instead doubling down on our active strategies. And it just m
So one thing I didn't hear there at either of the explanations was like something li
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