Considering bearish and bullish outlooks, and an open report on ParagonsDAO’s treasury
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We’re now just two weeks past the launch of our $PDT token (view on Coingecko), and we’ve already made so much progress. A few highlights include reflecting and responding to the Parallel Prime Proposal and Echelon Whitepaper, increasing our stake in Echelon governance (we’re at 58 Prime Keys now!), planning for our next Card Bonding Event (more on this very soon), further building our Play-to-Earn (P2E) gaming vision (more in the coming months).
As professional investors, crypto degens and huge fans of Parallel NFTs, we openly speculate on the value of Parallel cards (a practice Parallel itself abstains from) and the future rewards tied to them. These assumptions are important to help us value our Treasury (our asset-backed value) and they provide the basis for the market value of $PDT.
As a community DAO, we’re dedicated to transparency and the open flow of information. This open report outlines how we value the ParagonsDAO Treasury today, and how we see $PDTs value evolving in both bearish and bullish scenarios.
Valuing our Treasury💰
Our Treasury provides $PDT’s asset-backed value, so it’s no surprise that many of you look to the value of the treasury to understand the minimum value of $PDT.
We love to analyse fundamentals too, so here’s how we see it today:
The following is a point-in-time snapshot of our treasury value.
We’re currently working on a solution to provide a live view of our Treasury value. We’ve asked our friend Bigint (who built The Priming) to help us build an interactive live dashboard of our treasury. We’ll keep you posted if and how this progresses.
We also aim to work with Abacus’ NFT appraisal solution to provide more objective valuation for every NFT in the treasury.
Hard assets
- Cryptocurrencies and tokens held in the multisig vault (requiring 5 signatories to authorise every transaction), totalling $26m.
- NFT cards in the msig vault which you can view on OpenSea or via ThePriming, which we value today at $16.3m.
- NFT cards in the purchase wallet, if any (empty at time of writing).
Total value of hard assets in Treasury = $42.3m (26m + 16.3m)
While the value of our cryptocurrencies and tokens is straightforward, the value of our individual NFTs is more subjective (particularly as it relates to Masterpieces and Catalyst Drives, which are relatively illiquid), so make your own assumptions and amend the values to help you appraise the Treasury. For example, some people may value normal Masterpieces at 150 ETH or more (after Taylor Gerring’s recent purchase of Kill Switch for 180 ETH), but we used a more conservative value of 80 ETH.
Soft assets
- Technology assets we’ve built like our proprietary card bonding solution.
- Marketing assets such as social media accounts.
We haven’t completed an in-depth valuation of these continuously evolving soft assets.
InfoAddict, the tech lead at ParagonsDAO (our equivalent of a CTO) said:
“I spend my time building our technology solutions . We have a long way to go from here, we’re literally just getting started. It’s a little funny that many speculators don’t consider the value of our smart contract infrastructure. We’ve spent significant time and resources building our technology — I’m very proud of it and value it highly. Treasury value is just one part of the story.”
Income streams and monetary premium
We‘re confident ’that the price of PDT will eventually trade with a significant premium over the treasury value due to our income streams and the monetary premium theory.
Our income streams include:
- Liquidity pool (LP) rewards on our Uniswap v2 PDT-WETH pool.
- PRIME rewards from the upcoming airdrop and staking pools as outlined in the Prime Proposal/Echelon Whitepaper(timing to be confirmed). Refer to our previous article We’re primed for great things to better understand the rewards we’re entitled to.
- P2E revenues through Paragons Gaming (which will also provide extra rewards to players).
- DeFi products and smart contract infrastructure (we have a strong pipeline of products on the way).
- Income from B2B partnerships, for example, partnering with others to leverage our propriety technology for bonding NFTs into ERC-20 tokens.
As for the monetary premium theory, in essence, the market decides the value of the token based on speculation of the value of the team, vision (and ability to deliver on that), soft assets, future treasury value and a number of other variables — which we predict will make PDT trade at a premium from the current treasury value.
Staking utility often increases monetary premiums as tokens become coveted for their staking rewards — $PDT does not currently have a staking mechanism.
For reference, Olympus DAO’s premium between market-cap and treasury value is a solid 30 percent at the moment. During the OHM bull market, their premiums were in the hundreds of percent.
Considering a bearish outlook of $PDT🐻📉
Let’s put soft assets, income streams and monetary premiums aside and consider a more bearish outlook of PDT, which strictly defines our value as the hard assets currently in our treasury.
As we previously shared, our treasury value is currently at $42.3m. The fully diluted valuation (FDV) of $PDT is $68.25m at the price of $0.42 (calculated by multiplying the total supply of tokens (162,500,000) by token price ($0.42/PDT)).
$PDT bears believe the token price should decrease because the treasury value is worth less than FDV. But will it decrease? It depends on what the market thinks about the team and its ability to deliver on a big vision and value accrual.
Remember, many start-ups are valued at billions of dollars before actually producing any revenues, and many crypto projects trade at astounding prices on the basis of a whitepaper alone (or less!). Conversely, we already have a valuable treasury with several incomes streams that are already producing revenue. You be the judge.
Considering a bullish outlook of $PDT🐂📈
If you consider a more bullish outlook, in addition to the value of the hard assets in the treasury, you may also consider in the value of $PDT:
- Our team and vision (read more on our site).
- Our soft assets (including technology and marketing assets).
- Our income streams and potential monetary premium (as outlined above).
DeFi Ted, strategic lead and beloved teddy bear at Paragons DAO (loosely comparable to our CEO) said:
“ParagonsDAO’s treasury earned $113,131 from the Uniswap v2 LP in the first 6 days. This implies around $6.6m annual revenue run-rate. We can assume the volume to increase around Card Bonding events (over $10m daily volume days after our Initial bonding Event) and fluctuates around $1m daily volume during quiet days. Revenue to liquidity providers on Uni v2 LP is 0.3% from the volume. As PDT matures, I expect our LP revenues to grow higher due to increasing volumes. This is a nice yield add early, but not one the DAO can rely on as we continue to build.”
MrKvak, co-founder at ParagonsDAO (known for his passion in the card economy) said:
“I tried to quantify the exact $$$ value of upcoming airdrops and staking rewards into the ParagonsDAO treasury. It’s easy to quantify for Prime Keys and Parasets. I shared my thesis for Prime Keys in Parallel’s Discord earlier:”
MrKvak added:
“This is a speculative table assuming valuations of PRIME token between $1–$4b. Other grail NFT gaming projects are valued between $3b-7b already, so I personally think the PRIME token can easily surpass $10b FDV in two years. If PRIME’s valuation were at $2b, our Prime Keys would make around 100% profit (roughly $5m) while still earning other perks like pack reservations, which I personally love the most. Parallel is now changing the pack drop system to only 1 unified pack with 10 cards. This means you can pull more Prime Keys, MasterPieces and assets from these packs. There will be a good extra value from 58 packs we’ll open in every Pack Drop event.
I won’t share my math on other Parallel NFTs yet because it‘s still being debated in Echelon governance but I’m willing to disclose I personally bought $160,000 more PDT at around $0.43 price after doing my math and assumptions about the rewards flowing into PDT treasury. I’m bullish on the ParagonsDAO treasury and coming income flows.”
Whether your outlook is bullish, bearish or somewhere in between, we hope this post helps you consider the various elements that may contribute to the value of $PDT. We’ll continue to share information about our treasury in the future (including a tool with a live view).
We plan to share more details about our next Card Bonding Event late this week — keep an eye on our Twitter and Discord!
Please note that none of the above is financial advice. Trading crypto assets is risky and may result in financial losses.
