Thinking behind the "separation of stocks"

I. Separation of stocks

Recently, EOS's parent company, BlockOne, was exposed to EOS financing and bought 140,000 bitcoins, which caused widespread discussion in the market.

Some people say, don't panic, boldly hold EOS, EOS is speculating. . . Some people say that they hold these coins and have no semi-finance relationship with ordinary EOS holders, because you are holding EOS tokens, not stocks. Holding Token has nothing to do with the project's profits and assets. The equity holders of the parent company can enjoy these assets and profits.

Indeed, the bitcoin held by EOS's parent company, BlockOne, has nothing to do with ordinary EOS token holders. Indeed, as they say, these bitcoins are enjoyed by the investors and shareholders of the parent company. The only time it is possible to make a connection is when BlockOne buys these bitcoins to buy back EOS or buy NET and CPU.

In-depth thinking, this actually reflects a huge problem, Token and the traditional stocks are very different, a simple summary of a word is called: stock separation.

Second, the valuation of the currency

Everyone is most concerned about the issue of investment, so we first talk about investment. The most direct difference brought about by the separation of stocks is that the investment logic of stocks and coins is different, and the valuation theory is different.

I have spent a lot of time thinking about how to value the blockchain and digital currency projects for a while, and I have never found an answer that I am satisfied with.

Whether it is the relative valuation method or the absolute valuation method in traditional stocks, whether based on cash flow or P/E ratio, they are based on profit and cash flow, but the blockchain project has neither cash flow nor Without profit, these traditional valuation methods have no way to use them, but if there is no way to value them, our investment will lose its foundation.

Buffett's investment philosophy has a very important term called safety margin. The margin of safety means that you need to have a valuation of the project you invest in and a simple estimate of its intrinsic value. Because this calculation is definitely inaccurate, you need to make a discount on the basis of this value to ensure safety, for example, 50% off, then the space of 50% is called the margin of safety.

In Buffett's theory, the margin of safety is a very central thing. But the margin of safety is based on intrinsic value and valuation. If there is no way to estimate the intrinsic value of the project, then the term safety margin is meaningless.

The theoretical building of the entire value investment is based on the intrinsic value. If the standard of intrinsic value is lost, then the traditional value investment thinking cannot be applied in the digital currency field. Therefore, in the field of digital currency, friends who are thinking about using value investment can think about whether they really use value investment thinking.

Of course, the underlying thinking of many investments is similar. Whether you are a value investor or other investment ideas are similar, for example, others are greedy for my fears, others fear my greed, such as the principle of money management.

Third, the investment thinking in the era of blockchain

Value investment cannot be fully applied, it is not the end of the world, nor the end of investment. Just need us to make a little change, we need to break through the original investment philosophy and create a new paradigm of thinking.

In fact, the change of investment thinking mode is not new. For example, after the rise of the Internet, the traditional value investment concept has not been applied. The reason is precisely because the traditional financial system has no way to value Internet projects. This is why Buffett did not participate in any Internet project investment, which led him to completely miss the entire Internet era. His Forbes rich list was also at the top of the list. lost.

Although there is no way to use value investment thinking in Internet projects, he has his own set of angels, A, B, and C rounds of PE and VC valuation theory. It also has membership based, page views, clicks, membership, etc. A set of business analysis methods, as well as enough Internet listed companies can carry out valuation comparisons, which constitutes the capital ecology of the entire Internet.

The same blockchain also needs some changes in the underlying valuation method, such as based on "off-site premium", "active address number", "coin-day destruction", "new 7-day active address number", "chain" The new indicators such as the number of large transfers, the number of small transfers on the chain, the number of “DAPPs”, and the “total transaction amount of DAPP” are used for business analysis and valuation.

Of course, these are just specific valuation methods, and more importantly, they are aware of the differences between the underlying logic and the mode of thinking.

Traditionally, stocks are valued. Stocks represent the ownership of companies and companies. When you own stocks, you are actually part of the company. You also have the rights to dividends, voting rights and recourse of remaining assets. But when you invest in digital currency, the digital currency itself does not represent the stock of the company, nor does it have the rights corresponding to the stock.

At this time, what exactly are you buying? This is a question that needs to be seriously considered.

Fourth, the rights corresponding to TOKEN

For example, when you buy BNB, BNB can be used to deduct the handling fee, then you are essentially a discount coupon for the purchase fee;

When you buy Ethereum to pay for the cost of gas, you are actually paying the “toll fee” in Taifangfang;

So different digital currencies, the corresponding functions and rights are not the same, you need to be carefully distinguished.

Of course, the examples we have here are all well-recognized projects in the blockchain industry. There are more projects in the blockchain industry. It does not correspond to any rights. It just inexplicably sends a coin. You use this coin. Do anything.

At this time, it does not represent stocks or commodities, and you can't buy anything. The only effect is to hold the appreciation, so when you buy these coins, you need to think carefully. What are you buying? Are they air coins in the end?

5. Is “intrinsic value” or “supply and demand relationship”?

When it comes to price, there are two popular words in the market. One sentence is called “value determines price” and one sentence is called “supply and demand determines price”. We have heard a lot of these two sentences, and it sounds like nothing wrong, making us not ponder the difference behind these two sentences. Is it not a bit of a conflict to think about these two words carefully? Which factor really determines the price behind the scenes?

When we talk about the separation of stocks, we talked about a very important difference between stocks and certificates. When you buy stocks, stocks are a kind of financial assets, and the rights behind them are very clear; When you buy digital currency, you buy more goods than financial assets, and the goods correspond to the right to use.

It is very important to clarify that “ the essence of most of the certificates is commodities, and the rights behind the certificates are the right to use ”, because it means that for many certificates, the most important thing is the commodity attributes, not the financial attributes. To put it more directly, the price of the pass is determined by the supply and demand relationship of the goods, not the intrinsic value of finance.

Valuation of financial assets can of course be analyzed from the perspective of financial flows such as cash flow and profit; but when you value the goods, not exactly the valuation, which is called pricing, you should actually supply and demand. Angle to analyze.

When the supply of the certificate exceeds demand, the price of the currency falls; when the supply of the certificate is less than demand, the price of the currency rises, which has nothing to do with the profit and cash flow of the project itself. If you force a traditional financial theory valuation of a blockchain project, you may have to make a mistake.

Of course, the price of the coin is not completely unrelated to the profit. If the project establishes a mechanism for repurchasing or destroying profits, then the profit is repurchased and destroyed in the secondary market, which can effectively reduce the token on the market. The circulation, increasing demand and thus increasing the price of tokens, is equivalent to the disguise of linking profits with supply and demand, but in essence still through supply and demand .

6. Equity standardization

Having said that, in fact, we have to say a little more. The current digital currency has different rights for each currency. Some of them correspond to points, some correspond to the right to use, and some correspond to equity. It is a non-standardized behavior, but The stock represents the management right of the company, which is a standard right. Standard rights are easy to manage. For the current non-standardized certificate, we should have a reasonable classification method, what rights are behind the classification, and what classification is classified and subject to corresponding supervision .

For example, when you are a commodity attribute, your price should not have such a large fluctuation, and when you use goods to finance from the commodity point of view, it is essentially equivalent to pre-sale, which is why the country To define all digital currency financing is the reason for illegal fundraising.

For example, if the certificate corresponds to equity, then there must be voting rights, dividend rights, and other rights support. These rights should be mandatory and must be approved by the national regulatory body and subject to laws and regulations. Instead of looking at the mood of the project side.

At this stage, it may not be appropriate to completely distinguish the rights of the certificate to achieve equity standardization, but simple supervision is still needed. I have previously proposed a management idea called “voluntary classification and strict supervision”.

That is to say, at the time of the issuance of the certificate, the project party must be forced to specify the attributes corresponding to the certificate issued by itself. If it is a stock issued, then the back must correspond to the rights of traditional stocks; if it is the right to use, then it must be clear that it is the right to use, and the right to use generally can not have price fluctuations, which is called voluntary classification.

If a pass has both attributes, then the pass needs to fully accept the supervision of the two attributes. If there is a conflict, it is executed according to the strict supervision. This is called strict supervision.

For example, if a pass has both the right to use and the equity attribute, then the pass needs to be subject to both the right to use and the equity; if there is a conflict between the right to use and the equity, because the equity is generally Corresponding supervision is much stricter, so this pass should be subject to more stringent “equity attribute” supervision;

"What is the pass?" "What rights are there behind the pass?" These fundamental problems are solved, and the general economy has the possibility of a major outbreak.