Talking about the correct posture of Binance IEO from the perspective of valuation logic and historical data

**How to avoid getting stuck at the opening? **

MAV IEO has added a group of losers. Recently, there have been more and more incidents of cheating on the opening results of Binance Launchpad/Launchpool.

This article will take you to understand the basic valuation logic of various projects, avoid rushing to the highest point without thinking, and also review and compare the historical performance of Launchpool and Launchpad, and sharply comment on the similarities and differences and speculative posture of these two sectors

A. Valuation Logic

If it is not "meaningless governance tokens" or memecoin, in theory, it is possible to compare the interests of token holders on a large scale, but after all, cryptocurrency is an attention game, and the so-called fundamentals are too important in front of narrative. It is too small, ** so the valuation is generally based on benchmarking in similar projects. **

For example, MAV belongs to the DEX track in the DeFi category. **The general indicators of DeFi are TVL, which is more commonly used to evaluate the scale, and the less commonly used total fee income and agreement income to evaluate the ability to make money. Specifically, there is one more in terms of DEX Volume Vol metric for assessing business size. ** For the token itself, there are two indicators of current market value mcap and full circulation market value FDV, which correspond to short-term and long-term liquidity respectively

Refer to the valuation comparison diagram made by @BiteyeCN, which uses TVL or fee income as the business evaluation index, and gives valuation opinions under mcap/FDV respectively. Of course, there are often some tricks behind the data. For example, the problem with MAV using more than a week’s handling fee to evaluate is that **MAV’s airdrop + listing on Binance, so naturally there is no shortage of fluffy parties to brush up the transaction volume, which is naturally inflated. **

Using more detailed logic and common sense to judge is also a good way. The price of MAV $0.5+ will cause its FDV to be close to Pancake. No matter how close MAV is to Binance, it is not as close as Cake, so I hope that the price will be able to increase with the support of Binance. More than $0.5 is not realistic. The current FDV of DEX Hashflow, which was also released through Binance launchpool before, is around 400M, and the corresponding MAV price is less than $0.2.

**So if someone really rushes to "believe in Binance's vision", **$0.5 is obviously far beyond the range that the first launchpool can support. The current market price of around 0.45 is already a relatively high position.

DeFi projects are more convenient to evaluate because they are partial to applications and have a certain actual ability to make money. **The important user activity data of the public chain project is basically collected by the wool party, and the reference value is low, and only one TVL data can barely be seen. **So it seems that the background is more important than the data public chain, which is one of the reasons why VC is so popular in this field. Anyway, a good background seems to be brainless for 10B.

See the valuation of our ARB in the past. According to TVL and ecology, we gave a valuation of 2 times OP FDV. However, after the issuance of ARB, the price difference was very large and it was beaten in the face. On the contrary, after such a period of time, with the price of OP Continuing to fall, ARB managed to achieve 2x OP FDV. **

B. FDV is not just a number

FDV = total token circulation x currency price

When evaluating projects, I often prefer to use market value mcap instead of FDV for comparison. However, most of these are due to the low circulation of newly released projects with higher popularity, and it is better to use mcap to compare and take advantage. But FDV is much more than just a number. **

Take OKX/Bybit/Bitget's three joint IEOs, and SUI, which gave Binance Launchpool free 40M tokens at the door to avoid repeating the mistakes of Blur, as an example, the price has been falling all the way since the opening.

Recently, it was revealed that the project side was secretly unlocking and selling coins in advance, and claimed to be a flexible tokenomics. **This is the painful process of mcap gradually moving closer to FDV, and the increment will turn into selling pressure. **

However, even if SUI is honestly implemented according to the token unlocking plan, its growth rate will be very fast. Benchmarking and short-term hype allowed SUI to have an FDV of 10B+ at the opening. At this time, mcap was <1B, which could barely be supported by market enthusiasm. The price reduction in the process of mcap is also a matter of course.

C. Launchpool & Launchpad similarities and differences and speculation

Many people call MAV the XX Launchpad project, but in fact it is the Launchpool project. What's the difference between Launchpool and Launchpad projects? Launchpool is free, and BNB holders need to pay for Launchpad, which implies Binance’s attitude towards it

Especially for projects launched through Binance, it can be said that the implicit support of the Launchpad project is a level stronger than that of Launchpool. As previously tweeted, we've explored the overall return data for Launchpad

This time, we will analyze the following from the perspective of opening market users, analyzing the opening price (average price on the first day), the highest price in history (closing price) and the corresponding FDV, and the return rate ROI of buying ATH and selling at the opening.

The picture above is the Launchpool data, and the picture below is the Launchpad data. Focus on the median in the last row

From the historical data point of view, the performance of the previous Lauchpool project is far worse than that of the Launchpad project. Assuming buying at the average price of the first day and then selling at ATH, For Launchpad, the median rate of return is 2.9 times, while for Launchpool it is only 1.9 times

In addition, Launchpool has two projects that are at the peak of their opening, and they have been used until now after buying them. This situation has not yet occurred with Launchpad (of course, the data of the average price on the first day of opening is convenient for horizontal comparison, but it cannot reflect the whole picture. EDU is currently bought on the opening day. There is a high probability that the entry is still in a locked state)

As for the reason, we can observe that in terms of FDV ATH, Launchpad and Launchpool are actually close to 1.9B, but Launchpool's first-day FDV median of 780M is much higher than Launchpad's 460M.

This is mainly due to the liquidity problem of Launchpool. **Launchpad generally gives about 5% of the share, while Launchpool generally gives less as free coins, generally less than 2%. **Although the opening price of Launchpool is inflated, since most BNB holders sell directly at the opening, the higher the opening price is, the more beneficial it is for BNB holders, so Binance naturally does not have much motivation to distinguish this point.

For investors, the long-term game value of Launchpool is obviously lower than that of Launchpad, so for Launchpool projects, it is necessary to do a valuation analysis and be more conservatively prepared, and it is easy to get stuck if you hold it without brainstorming for a long time.

If you are too lazy to estimate, refer to the median first-day FDV of Launchpad 460M. Once the opening FDV of Launchpool application projects exceeds this value, the probability of subsequent high returns is actually not very high.

Summarize

Using similar projects to benchmark is the most common valuation method. The performance of Launchpool’s projects is not as good as that of Launchpad. Due to liquidity problems, currency prices are often inflated at the opening, so more caution is required. **Launchpool has a small number of openings that have been set to the peak until now, while Launchpad basically has not been completely set. **