Month: October 2024

Valuing decentralized networks such as Bitcoin, Ethereum, and Solana is tricky. In this episode, Jon Charbonneau breaks down the key factors that determine the value of blockchain networks and how Layer 2s impact these valuations.

How do you determine the value of decentralized networks like Bitcoin, Ethereum, or Solana? It’s not as straightforward as traditional investments.

Jon Charbonneau, general partner at crypto investment firm DBA, joins Unchained after writing a paper that dives deep into the complexities of valuing blockchain networks. He explains why applying traditional equity models to networks such as Bitcoin falls short, how tax inefficiencies in staking rewards impact valuations, and whether Layer 2 solutions like Optimism and Arbitrum are helping or hurting the long-term value of Layer 1 blockchains.

Also, he looks at the big question—are these networks sustainable in the long run?

Show highlights:

• What motivated Jon to write the paper
• What the main points of the paper are
• Why tax inefficiencies in staking rewards are a critical factor in valuing decentralized networks and how they differ from traditional corporate taxes
• What makes valuing networks tricky, as Jon explains how proof-of-work vs. proof-of-stake systems differ from traditional equity models
• How he thinks about valuing Layer 2s and whether they are parasitic to the L1
• Whether blockchains are sustainable in the long term

Visit our website for breaking news, analysis, op-eds, articles to learn about crypto, and much more: unchainedcrypto.com

Thank you to our sponsors!

• Polkadot
• Mantle’s FBTC

Guest

• Jon Charbonneau, co-founder and General Partner at DBA
• L1 & L2 Token Value Capture

Links

• Previous coverage of Unchained on this topic:
• How to Figure Out Whether a Crypto Token Is Worth Its Trading Price
• ETH Is Down Bad, While Layer 2s Are Ripping. Are L2s Parasitic to Ethereum?
• Are Layer 2s Parasitic to Ethereum and ETH as an Asset?
• Are L2s ‘Parasitic’? Analysis Shows Ethereum Only Gets a Tiny Percentage of Fees
• Ether-Bitcoin Ratio Is at Multi-Year Lows, But It’s Just ‘Temporary’ and an ‘Opportunity’

Unchained Podcast is Produced by Laura Shin Media, LLC. Distributed by CoinDesk.

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CoinDesk Indices presents notable data insights from the week, followed by additional analysis from Kelly Ye, Portfolio Manager at Decentral Park Capital.

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The CoinDesk Market Index (CMI) functions as a benchmark for the performance of the digital asset market, delivering institutional quality information to digital asset investors. Subsets of the CoinDesk Market Index (CMI) are investable CoinDesk Crypto Sectors and the CoinDesk 20 Index, designed to measure the performance of top digital assets. Today’s takeaways are provided by Tracy Stephens, senior index manager at CoinDesk Indices with additional analysis from Kelly Ye, Portfolio Manager at Decentral Park Capital.

For more on CoinDesk Indices, visit: coindeskmarkets.com.

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In the news this week, a couple of $200 million headlines, 1.5 GWs of acquisition aspiration, and public US miners grow their hashrate share.

Welcome back to the Mining Pod! For this week’s news roundup, Colin and Matt discuss how US public bitcoin miners are growing their share of Bitcoin's hashrate. Plus, Marathon is leveraging its trove of 26,000+ BTC and Cipher is going bigly with three pending mining site acquisitions for a total of 1.5 GW of capacity, some of which the miner may allocate toward AI/HPC compute. They also touch on some AI updates from Crusoe and Bit Digital, and in this week’s cry corner, why grown men are getting big mad about arbitrary data on  everyone’s favorite block explorer. 

👉 Get tickets to OP_NEXT by visiting the website! And use discount code OCTOBER to get 25% off at check out!

Timestamps:

00:00 Start

01:42 Difficulty update

04:19 29% PubCo Hashrate report JPMorgan

10:50 MARA Unlocks $200M BTC-Backed Credit Line

18:06 Cipher Mining Acquires 1.5 GW in Texas

24:37 Blue Owl Backs Crusoe in AI Move

29:35 Bit Digital Acquires HPC Data Center

32:38 Cry corner: "Runes, ordinals, etc don’t exist"

Published twice weekly, "The Mining Pod" interviews the best builders and operators in the Bitcoin and Bitcoin mining landscape. Subscribe to get notifications when we publish interviews on Tuesday and a news show on Friday! 

👉Enjoying the show? Check out our newsletter at miningpod.blockspace.media!

👉 Check out Bitcoin Season 2 and The Gwart Show!

Follow our hosts on Twitter: @wsfoxley, @cbspears, @AsILayHodling, @MatthewKimmell

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Thank you to our sponsor, CleanSpark, America’s Bitcoin miner!

"The Mining Pod" is produced by Sunnyside Honey Inc. with Senior Producer, Damien Somerset. Distributed by CoinDesk.

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There was drama in Kenyan politics this week which ended with the impeachment of deputy president  Rigathi Gachagua. Young people voted in big numbers during the general elections in 2022.  Two youths share their views on the matter.

Why has the government of Ivory Coast dissolved all student unions?

And how Al-Shabab militia in Mogadishu are making life difficult for business owners with CCTV cameras on their premises.

Presenter Charles Gitonga Producers: Frenny Jowi, Blessing Aderogba, Yvette Twagiramariya and Paul Bakibinga Technical Producer: Francesca Dunne Editors: Andre Lombard and Alice Muthengi.