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Original title: "Web 3 Series | Fabric Ventures: A Complete Overview of Quantitative Indicators for Value Internet"
After studying seven venture capital funds, we are convinced that key indicators play a pivotal role in assessing a company's performance, such as:
- Vitalik: The same technique on Layer-2 and Layer-1
- Proficient in IPFS: IPFS Get the content below
- Viewpoint | From Google Maps, I saw the future of the blockchain
- Dragon White: Is it difficult to get out of it? Global Stabilization Currency Risks and Challenges
- The People's Liberation Army newspaper article: blockchain boosts military management
- Market Analysis Report: Bitcoin shocks down, market sentiment is stable
- “What is the current growth of MRR?”
- “Which customers are losing in different customer groups?”
- “How many DAUs do you have?”
- “What is the contribution rate of each of your customers’ net profit?”
These are all very important metrics for measuring the Web 2.0 business model, but they are not applicable to all Web 3.0 business models. If you try to force it to be applied to Web 3.0, you won't show any positive results, just as people don't evaluate the performance of a bank through the number of "daily active mortgage users", we should not pass the daily The number of user interactions to analyze the health of the MakerDAO ecosystem. Similarly, when no core company can achieve these revenues, the growth rate and turnover rate of MRR is meaningless.
As an investor in the Web 3.0 space, Fabric Ventures has improved the different types of metrics used to evaluate the network based on specific use cases and business models. From hash rates, gas usage, and lock-in value, this article will delve into the native metrics of these Web 3.0.
BTC: Primary primary asset, primarily used for value storage
- Hash rate : The hash rate of the BTC network is the total power of all miners in the system and is a manifestation of network security. Due to the probabilistic supremacy in BTC, any party with a 51% hash rate (that is, more than half of the computing power of the entire network) can create a longest chain consensus: a higher hash rate means attacking the network. The difficulty is also higher.
- Number of Miners Controlling 51% Hash Rate : Indicates network concentration around certain miners and pools. The lower the number, the higher the risk of collusion attacking the network.
- Transaction volume : can be used to indicate the use of the network as a medium of exchange, but does not fully reflect the use of the network as a way of storing value. Because it can be manipulated by machine algorithms that send a large number of low-value transactions, the actual volume of transactions can be distorted; on the other hand, a transaction can encode the transmission through techniques such as batch processing or sidechain/lightning networks.
- Total Transaction Value : The total value of all transactions over a period of time, showing the value transmitted over the network.
- Total Market Value: As a means of value storage, the total market value of the BTC represents the value it carries (note that some BTCs are already in a lost or dormant state).
- Block rewards available to miners : This award is the main source of income for the miners' protection network. The block reward multiplied by the price of the BTC represents the usable value of the exchange hash calculation.
- Transaction costs paid to miners : It is the source of income for miners, and its importance will increase as block rewards continue to halve. It is expected that this fee will be the main source of income for miners who are ensuring cybersecurity in the coming decades.
BTC's hashing power has recently hit a record high – Source:
Lightning Network: BTC's Layer 2 Expansion Solution
(This part was written by Casa's Jeremy Welch)
- Network Capacity : Points to the total number of BTCs promised by Lightning Network. Because the trading channel is completely private, this indicator is the main indicator of how much money is transferred on the system.
- Number of nodes with active channels : The total number of nodes represents the number of nodes actively trading on the lightning network, and also indicates that funds are routed to other nodes on the network.
- Number of payment channels : The total number of channels indicates how many direct node-to-node connections were created. The increase in nodes also leads to an increase in the channel, and as the number of lightning network use cases increases, the channel should grow faster than the total number of nodes.
- Average number of channels per node : This may increase with more lightning use cases and then decrease as network density increases (it is easier to route through other nodes than direct routing).
- Number of TorOnion service nodes : The default lightning connection code includes the node's IP address and port. The IP address can be used to determine the physical location of the node, which is a major operational security risk. It is now possible to use the Tor Onion service without exposing the geographic location.
Lightning Network Total Capacity and Maximum Capacity Node — Source: https://explore.casa/
Ethereum: The largest smart contract platform for application developers
Hash rates and transactions can be measured by some of the same metrics as BTC, but more include:
- Total gas usage : A metric that represents the number of trading/smart contracts used and the complexity of using smart contracts. This indicator is also used to illustrate the overall use of the Ethereum network as a decentralized computing platform (note that trading spam may cause serious bias in this indicator).
- Average Gas Usage per Trade : Describes the complexity of smart contracts/calculations used on the Ethereum network.
- Average gas price : Depends on the number of transactions at a given point in time, representing the usage and congestion of the Ethereum network.
- Lock-in value in DeFi : Decentralized Finance (DeFi) The core application is built primarily on Ethereum, the main currency used in this system for collateral. The value of the asset locked in it represents the use of the DeFi application and has a positive impact on the ETH price. Mainly MakerDAO, but also Compound, Uniswap, Dharma and Synthetix.
- Number of developers using Truffle/Ganache/Zeppelin : As a smart contract platform, how many people develop applications based on Ethereum is one of the most important indicators. The most easily quantifiable data may be the number of Truffle/Ganache/Zeppelin users (including the number of developers in other libraries), and keep in mind that each download does not mean adding a user/activity developer.
Currently, approximately 2% of ETH is locked into the DeFi ecosystem – Source: https://defipulse.com/
MakerDAO &DAI: The largest decentralized stable currency lending platform
- Total Loan : The total usage of the token MakerDAO platform, similar to other Web 2.0 loan providers.
- Number of open CDPs : Considering that the number of open CDPs is closest to MakerDAO's “active users”, it can be used as a proxy for the total number of platform users.
- The value of the stabilization fee : derived from the current 16.5% annual stabilization fee and the total outstanding loan amount. The value of the stabilization fee is burned out in MKR, because the reduction in supply will theoretically lead to an increase in the value of MKR tokens.
- Guaranteed value : refers to the value of all assets locked in CDPs (currently only ETH) as a guarantee for outstanding loans.
- Guarantee ratio : The ratio of the total value locked by CDPs to the value of outstanding loans, representing the risk rate of the entire system (less than 150% of CDPs will be automatically liquidated).
- Default ratios for CDPs: Less than 150% collateral in CDPs to assess the optimal stabilizing and guarantee ratios required.
- MKR voting participation : The MKR holder community participates in governance decisions regarding increased stability costs. For a token that builds its value largely on governance, this will be a useful indicator of future tracking.
- DAI Stability/Hook : The result of market incentives developed by MakerDAO to keep DAI supply and demand within a similar range. Changes can be made by increasing or decreasing the stabilizing fee and the future daily savings rate.
MakerDAO's total collateral has grown steadily to $450 million — Source:
Work token: supply-side tokens such as Keep, Augur or Livepeer
- Staking participation rate : An indicator used to track how many token holders in the online economy are active. The goal of the network is to achieve a certain amount of participation. When the participation rate of staking falls to a certain threshold, they can increase their block rewards (for example, Livepeer increases its inflation rate every day until it reaches 50% activity).
- Staking benefits from block rewards : Benefits provided to active participants in the network as a means of rebalancing from passive holders to active holders. In a network that uses tokens to motivate suppliers, the value of passive holders should not be increased, but should be diluted reasonably.
- Work Activity : The amount of work done on a given network: Protect Keeps on the Keep Network, solve market problems on Augur, or transcode video on Livepeer. This indicator shows the actual usage of the network and is still low or non-existent in most networks because they have just started or started.
- Total revenue flowing to the verifier : the value of the fee paid by the user to the network provider. For example, the total value paid to ensure Keep's security, and the benefits of predicting market problems on Augur. This is the most important indicator for evaluating a network. Through the analysis of the rediscounted income of future cash flows, all the tokens held by the verifier will receive a relatively fair and reasonable valuation to achieve its profit target.
Livepeer's participation rate is close to the target of 50% — Source:
We look forward to the healthy development of the decentralized network. This article is a comprehensive introduction to quantitative indicators, all of which have different levels of restrictions, not universally applicable, but it does a good indication of the direction of Web 3.0.
Author: Max Mersch
Translation: DUANNI YI
Edit: Sonny Sun