This post reflects my personal view on a qualitative due diligence framework for DEX 0x.
Since last spring, I have been following the growth of the crypto market. After sharing my thoughts on the crypto capital markets landscape and crypto funds (setup and landscape), crypto asset as a new asset classs (Part I retail, Part II Institutional investors)
I am interested in having a chat or share notes with other investors / individuals trying to figure out how to analyse early stage crypto companies. You can email me at ebrunet40@gmail.com or use https://earn.com/etiennebrunet/ if you want a quicker response or if it is not related to this topic.
When a few months ago Alexander Lange shared its post about Cryptoassets: A crowd sourced evaluation & due diligence framework, I found it very super insightful. Evaluating an early stage post or pre-ICO company is quite challenging at the moment. One needs to look at a number of KPI, many different sources and also take into account the ‘public market’ features such as entry/exit timing, size exposure etc..
As the market is currently in mega bull mode and everyone think they are the new George Soros, most of investors seem not to do much due diligence and invest mostly based on sentiment, momentum... This surely work in short term but it may fail in the long term. Maybe.
Hence, I thought it would good to share with the public a research piece on 0x that I wrote back in October 2017.
The goals are to (i) Gather feedback from the community (I know there are typos. I know.), (ii) Foster discussion around best practices for a framework around evaluating crypto companies, (iii) Connect with other individuals / investors in the space.
This case study lacks two main deep dives: One on the code review which from my view should be done by two or more independent bodies if possible. Another one around valuation which is the next most interesting part for me. I shall try to share my valuation framework in the next months, don’t hesitate if you want to chat about it.
Note, this case study was done without talking to the founding team as I wanted to try to do a research with only public information. Moreover, it is slightly outdated as it was written in October ’17. Hence, it does not include products updates, relayers update such as Radar Relay or dydx as well as the recent monster price surge.
This is not an investment recommendation. I would not at all recommend to base your investment thesis solely on this paper. That would be not wise.
<< Get the template of this case study here >>
Slide structures
- Summary slides
- Team review: Founders and rest of the team
- Community: Advisors, partners and social
- Protocol: Drivers for adoption, comparison with current architecture, overview of the protocol, network effect
- Technology: Network effect, role of the token, technology review, roadmap, Challenges
- Market: Size, Value chain Analysis and Market structure, Competitors, Competitive Edge, Go-to Market
- ICO: Registration, Fundraising, Token distribution, Token details, ICO review
- Crypto fund synergies: Partnership, hiring, growth development,
- Appendix: Sources, other graphics
Thank you for reading my post.
Don’t forget to share with friends and your bitcoin early adopters colleagues!
Best,
Etienne
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