Horse: 10 key things you must know in the currency circle

10 Key Understandings

1. MEV is the foundation of long-term value: In the long run, MEV (Maximum Extractable Value) is a key indicator to measure the development prospects of a chain. It reflects blockchain’s scalability, security, and appeal to developers and users.
2. TVL is a misleading metric: Total Value Locked (TVL) is an often inflated metric because it can be easily manipulated. By driving up the L1 token price, the TVL data can be inflated.
3. FDV is of great significance: Fully diluted valuation (FDV) is an important metric because it reflects the potential market capitalization of a blockchain project. While it's not perfect, it can provide a rough estimate of the size of the project.
4. Economic security is not reliable: It is not enough to rely solely on economic security to ensure the stability of the blockchain, as the cases of LUNA and ATOM show. Other security mechanisms are also needed, such as consensus mechanisms and governance models.
5. The execution layer is the key to value capture: The execution layer is the core of the blockchain, it is responsible for processing transactions and verifying data. As such, it is also a prime location for value capture.
6. DEX data can better reflect ecological prosperity: Decentralized exchange (DEX) data can more accurately reflect the prosperity of the blockchain ecosystem. In order to obtain a clearer εικό, data on stablecoin exchange trading pairs and L1 token-U/ETH trading pairs should be excluded.
7. Focus on developers, not community users: The success of blockchain projects depends on developers, not community users. Therefore, project strategy should revolve around developers, engaging and supporting them.
8. The US stock market pattern is mapped to the currency circle: Just like the US stock market, the market value and trading volume of the currency circle may also be concentrated in a few top projects.
9. The business model is crucial: simply having a large number of users does not guarantee the success of the project. What’s more important is to find a viable business model and convert user value into actual revenue.
10. Value is the foundation of prosperity: The long-term prosperity of blockchain projects needs to be built on a solid value foundation. This requires the introduction of traditional investment systems and valuation models to more objectively assess project value.

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