David, In thinking more about Celestia, and your write up on potential sustainable value extraction, is it as simple as applying an estimated extractable value for all of Celestia’s blocks at 70% full and projecting that into a future cash flows in order to get a discounted current day price target for TIA? Have you work on modeling anything like that yet, if not, I might see if I can set up a model and look at discounts and sensitivities. It feels like TIA is getting a little overvalued (on fundamentals) this month, but there is no accounting for the value this market places on speculation. Either way, I would like to start conceptualizing TIA’s value based on some reasonable assumptions so that I can determine how much comfort I have with picking up a larger position in my portfolio. Thanks, Christof
2) in terms of value vs. fundamentals, TIA is a startup. mainnet just launched. for all intents and purposes, it has no fundamentals yet. valuation today is based on potential future fundamentals (true for all early stage investing...which is all of crypto). i think the best way to get comfortable with valuation today is to compare to other L1 projects today (ETH, SOL, etc). if you think modularity plays a big role in the future, TIA's upside still looks very attractive today imo.
"I imagine the largest rollups (with sequencers) in the future will offer free execution to achieve scale & monetize MEV instead." Does it imply that you think future MEV revenue will be less than current fee revenue?
David, In thinking more about Celestia, and your write up on potential sustainable value extraction, is it as simple as applying an estimated extractable value for all of Celestia’s blocks at 70% full and projecting that into a future cash flows in order to get a discounted current day price target for TIA? Have you work on modeling anything like that yet, if not, I might see if I can set up a model and look at discounts and sensitivities. It feels like TIA is getting a little overvalued (on fundamentals) this month, but there is no accounting for the value this market places on speculation. Either way, I would like to start conceptualizing TIA’s value based on some reasonable assumptions so that I can determine how much comfort I have with picking up a larger position in my portfolio. Thanks, Christof
1) still remains to be seen if L1s will be valued based on "cash flow". i've previously argued the more relevant metric is "blockchain gdp" which represents the economic activity secured by the L1 (since the L1 token represents "access" to this economy). longer form thoughts on the subject: (https://omnida.substack.com/p/why-do-tokens-have-value), (https://omnida.substack.com/p/why-dcfs-are-illogical-for-valuing)
2) in terms of value vs. fundamentals, TIA is a startup. mainnet just launched. for all intents and purposes, it has no fundamentals yet. valuation today is based on potential future fundamentals (true for all early stage investing...which is all of crypto). i think the best way to get comfortable with valuation today is to compare to other L1 projects today (ETH, SOL, etc). if you think modularity plays a big role in the future, TIA's upside still looks very attractive today imo.
"I imagine the largest rollups (with sequencers) in the future will offer free execution to achieve scale & monetize MEV instead." Does it imply that you think future MEV revenue will be less than current fee revenue?