Decode Crypto, Define Value
OUR STORY
The BitLeaf publishes proprietary blockchain investment research. We delve beyond hype into the potential of distributed ledger technology on which cryptoassets are founded.
Our conviction is that blockchain holds transformative potential for the future of economics, technology and society. Our purpose is to provide readers with a comprehensive and balanced analysis of blockchain’s risk, value and utility.
PRODUCTS
The BitLeaf provides four forms of research:
BLOCKCHAIN UTILITY
Our framework for analysing risk, value and utility spans four pillars with corresponding factors and leverages both quantitative and qualitative assessment. Pillars are weighted to derive an overall grade.
| Grade | Score | Rationale |
|---|---|---|
| A | 6 | Network delivers on all key metrics and is stand-out among peers. |
| B | 5 | Network delivers on key metrics but has room for small enhancements. There is evidence that work is underway to enhance. |
| C | 4 | Network delivers on some key metrics but could be improved. There is some evidence that work is underway to enhance. |
| D | 3 | Network delivers on some metrics but has significant room for improvement. There may be some evidence that work is underway to enhance. |
| E | 2 | Network fails to deliver on a number of key metrics. There is no evidence that work is underway to enhance. |
| F | 1 | Network fails to deliver on any key metrics and is inferior to its peers. |
I. Financial Prospects (23%)
- Tokenomics
- Role of the native token & distribution
- Consensus mechanism
- Revenue Streams
- Revenue sources & transaction fees
- Economic incentives
- Financial Metrics
- Market capitalisation, circulating supply, total value locked
- Historic price volatility
II. Network and Usage (30%)
- Network Metrics
- Scalability
- Sustainability
- User Adoption
- Active addresses & user growth
- Partnerships
- Smart Contracts and dApps
- Transactions per day
- Overview of dApps
III. Comparison with Traditional Finance Alternatives (20%)
- Cost-Benefit Analysis
- Economic benefit for users
- Efficiencies
- Security and Trust
- Security features
- Historical instances of fraud
- Accessibility and Inclusivity
- Product inclusivity
- Developer numbers
IV. Future Utility (27%)
- Roadmap and Development Plans
- Development plans
- Alignment of roadmap with industry needs
- Potential Risks and Mitigations
- Risk factors
- Strategies and mitigations outlined by development
- Future Utility and Evolution
- Industry trends
- Relevance
DEFI VALUATION
Business models in DeFi can align with traditional finance. Fees, revenues and treasuries allow us to apply relative and intrinsic valuation to these businesses.
- Relative valuation: comparable analysis of each native token that considers the ratios of similar DeFi protocols to derive the value of the primary token.
- Market Capitalisation / Net Assets (where net assets are the Treasury held by the protocol)
- Price to Sales (where sales are annualised revenues)
- Price to Fees (often more appropriate in DeFi as many protocols reinvest their revenues back into development, leading to a larger P/S ratio)
- Market Capitalisation / Total Value Locked
- Intrinsic valuation: evaluates the native asset of a protocol through definable cash flows derived from its business model.
- See terminology for calculations here
AUTHOR
Charlie Kellaway holds a BSc. in Psychology from the University of Birmingham and is passionate about using technology to enhance financial behaviours. In particular, he is captivated by blockchain technology and how it could spark both competition and collaboration between TradFi and DeFi.
Charlie currently works for the largest trading venue in Europe and specialises in the structure of capital markets. He performs extensive research on the trading of MiFID instruments and execution performance of European venues. Charlie has been involved in setting up market surveillance of cryptocurrency ETFs ahead of their launch in the UK and previously spent two years in insurance helping deploy a digital broking platform for product placement.
Charlie has studied in Birmingham and Ottawa and is based in London. Outside of DeFi, he loves skiing, running and craft beer.
GET IN TOUCH
We are eager to discuss all things blockchain and interested in collaborating. If you want to chat about groundbreaking technology, valuation, events or anything else, do not hesitate to reach out.
The BitLeaf 