This week, Sam Bankman Fried is found guilty on seven counts of fraud, OpenSea cuts half of its employees and CEO announces new direction for the company, and Coinbase realized a net loss of $2.3mm in Q3 2023 vs. $545mm in Q3 2022.
let’s jump right in 👇
🌞 Review of Modular Capital’s Braintrust Thesis
💫 Artemis Data Insights:
The crypto ecosystem saw continued momentum upwards as L1 / L2 market prices realized average and median WoW increases of 13.1% and 9.7%, respectively. This week saw a number of Alt L1s skyrocket as OSMO and SOL saw ~58% and ~25% WoW price increases, respectively. OSMO was buoyed by its announcement of Pipette, a new feature that allows for bilateral liquidity between Celestia rollups and the Cosmos ecosystem. Meanwhile, SOL ran up into the annual Solana Breakpoint Conference in Amsterdam. Meanwhile, the S&P 500 and Nasdaq Index saw the best trading week of the year with the S&P 500 up 6% and NASDAQ up 7% on the back of Fed messaging that rate hikes might be done.
🌞 Review of Modular Capital’s Braintrust Thesis
This week, Modular Capital, a crypto investment firm focused on in-depth, thesis-driven research, published a comprehensive analysis of Braintrust, a decentralized talent network operating within the burgeoning web3 space. Today, we dive into their paper to understand the core drivers behind their investment thesis.
For more information on Modular Capital, check out Artemis’ fourth edition of Analyst of the Month, which highlights the stories of Modular Capital’s Co-Founders James Ho and Vincent Jow.
Braintrust stands at the forefront of the web3 talent marketplace, connecting an expansive network of freelancers to a client roster featuring heavyweights like Goldman Sachs and Nike. Braintrust has raised over $120 million in funding from both crypto funds (Multicoin, Variant, Galaxy Digital, Pantera) and traditional tech hedge funds and venture funds (Tiger Global, Coatue).
Braintrust Business Model / Monetization:
Valuation Scenarios & Core Assumptions
Modular Capital’s Base Scenario assumes that Braintrust can grow to a market cap of ~$1.5bn from its current FDV of ~$100mm. This takes into account the following operating assumptions:
Together, the total market cap in Modular Capital’s base case is ~$1.7bn, a 17x multiple on its current trading value of $100mm.
Risks and Mitigants:
Modular also provides an analysis of key risks to their thesis playing out.
What do you think about Braintrust? Tell us in the comments below and be sure to check out the full piece here!
💫 Artemis Data Insights: SocialFi User Retention
Over the past months, we’ve seen the onset of SocialFi (social finance) platforms that allow users to trade “keys” or “shares” of other users on the platform which provide access to exclusive chat channels and enable users to take part in value appreciation of the keys of other users on the platform. During this time, a few protocols have emerged - friend.tech (the original protocol that created this model, built on Base), Stars Arena (a similar protocol to friend.tech built on Avalanche) and Post Tech (a friend.tech copy built on Arbitrum) are among the leading SocialFi protocols today.
As the first mover in the space, friend.tech has continued to see the highest number of daily active users at ~5.3k as of November 2023 (peak of ~73.8k on October 15, 2023). Meanwhile, while Post Tech and Stars Arena both saw strong growth numbers at launch (peak of 22.7k and 11.4k for Post Tech and Stars Arena, respectively), both have seen usage dwindle over the past few months (daily active user figures of ~540 and ~840 in November 2023 for Post Tech and Stars Arena, respectively).
Ultimately, all of these protocols have seen usage level off since they initially launched, raising questions about sustainability of the SocialFi concept. It remains to be seen whether the protocols can continue to build and improve retention over a longer period of time.
💫 Artemis Data Insights: RabbitX Price vs. Trading Volume - Follow-up
Last week’s article provided a look into how perp trading volumes followed Bitcoin price movement upwards, and how RabbitX saw its price spike after trading volumes sharply rose. This week, we wanted to evaluate whether those trends persisted.
This week it appears that perp trading volumes are on track to decline WoW while BTC prices continued to inch upwards.
Meanwhile, the more interesting observation is that while RabbitX trading volumes came down heavily after spiking mid last week, the token price has stabilized over the past few days at its new elevated price of ~$0.05. This price relationship over the past few days appears to indicate that other factors beyond trading volume are playing into the price of the token.
Detailed dashboard for people who love more numbers in smaller font:
Note: Revenue represents fees that go to the protocol’s treasury or are returned to tokenholders via a burn mechanism (source: Token Terminal). Weekly commits and weekly dev activity as of 10/23/23.
The content is for informational purposes. None of the content is meant to be investment advice. Use your own discretion and independent decision regarding investments.
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