Welcome to The Gwart Show! Today, Noah Goldberg of Theia Research, joins us to dive deep into the world of liquid token markets. Noah breaks down why the "token premium" is unsustainable, how his firm evaluates fundamental value in DeFi applications, and why the market structure creates perverse incentives. He explains why on-chain finance hasn't supplanted traditional finance as quickly as many expected, discusses problems with market making in crypto, and offers insight into how crypto can build sustainable moats. A must-listen for understanding crypto's real financial underpinnings.

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Notes:

• Token premium is unsustainable long-term

• RTV (Revenue to Transaction Volume) models for L1s

• Market makers often artificially prop up token prices

• Money markets account for $800B in traditional finance

• Most tokens are marked at unrealistic valuations

• Venture investors create circular valuation patterns

Timestamps:

00:00 Start

00:37 Who is Noah?

02:36 Why Liquid?

05:03 Tokens vs equity

09:03 Token premium

12:25 Are tokens irrational?

17:55 Why isn't RadFi embracing DeFi?

23:26 Global investor base for tokens

25:46 Infrastructure apps

29:30 Cash flow modeling

31:31 REV on L1

32:32 Investing in L1s & REV

35:46 Is the market valuing REV?

39:16 Unitoken

42:43 Uniswap valuation vs equity

45:53 Token moats

48:18 Liquidity as moat

58:50 Improvements for markets

1:02:00 Market making vs token price

1:06:29 Whay are weak tokens valued so high?

1:11:28 Value of low liquidity tokens

👋 The Gwart Show is sponsored by Ellipsis Labs. Ellipsis Labs is building Atlas, the blockchain purpose-built for verifiable finance. You may know of Ellipsis Labs by their first product Phoenix, a fully on-chain orderbook DEX that’s done over 50 billion dollars in unincentivized volume. They are one of the strongest teams I know in crypto. If you’re interested in working for a mission-driven company, Ellipsis Labs is hiring engineers passionate about crypto and finance to work on Atlas. You can learn more and apply on Ellipsis Labs’ Twitter “at Ellipsis_Labs”. Don’t forget to check out Atlas too, @atlasxyz on Twitter.

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