An attempt at assessing NPX tokens’ appreciation through time using simple math

Anyone investing in a project should try to assess how much he will be able to earn depending on a time horizon and what are the risks associated to this return. Of course, to do that, you need to make a lot of assumptions that are difficult to assess precisely. That is why an investor should ask for a big enough return to compensate for the uncertainty on these parameters. In some cases, the investors are buying a simple dream or participating in a community project regardless of profitability. And that is a perfect fine as long as they are aware of it.

In our case, as our business purpose is to make money, it is easier to assess. This is all the more true that we have developed long standing performance strategies with “regular” returns, on which you can start making calculations. They are presented in our Blackpaper.

Below is a table where inputs have been entered in blue. The black cells are calculated cells. There are 3 very important assumptions:

1. The annual Gross performance of the DAFs. We made a simple average of the first 10 DAFs included in our Blackpaper. For the simple average, we had a 73,75% average return since inception. However, observing the 10 returns we decided to exclude the 2 extreme returns (DAF#8 & #9) to have something more reasonable. This average is 32.43% pa and we decided to use 30% in our simulations.

2. The second big assumption is the amount of additional money raised in the DAFs over time. That is the line Net external AUM with 50k ETH at the end of Year 1, 150k and the end of Year 2 and 450k for the following years.

3. The multiple on NaPoleonX NAV that will be used to value NPX token, a little bit like a Price Earnings Ratio (PE ratio). For tech companies with high growth, this can go up from 20x to 100x easily. For utility stocks, it is more 5x-10x. Here we have used 2.0x, so not over aggressive to say the least.

The rest of the calculation is pretty straight forward and I will be happy to give all the details to anyone interested.

Please visit our website www.napoleonx.ai and feel free to contact us for more information.