The only investors worth having are those who share your values

It’s easier to create a valuable protocol than a valuable token But if you’re investing in projects, you need to make sure they have both Join Nate | eatsleepcrypto.eth and Vasily Sumanov this Thursday as they discuss value capture and post your questions below👇 x.com/i/spaces/1lpkq…

If you see a circle with arrows like this in a pitch deck, run. This is financial advice.

Value capture is the most overlooked principle of tokenomics To ensure you capture value, begin with this principle in mind and build in the other two

The best protocol founders frequently overcommunicate technical details because they’re so familiar with the tech they’ve built This can alienate users and investors, each of whom need protocols explained at different levels of technical detail

There are three principles of tokenomics and they all have tradeoffs It’s easy to get two of the three, but adhering to all three principles is difficult

It’s a lot easier to get users when you identify their incentives When you’re thinking about growth, identify what users want, then build around that

It was Bitcoin’s alignment of incentives, not elegant code that secured it for the last 15 years

The primary thing you should be focused on when designing a protocol with a token is the demand for that token to be used in the protocol, which is going to drive the price by creating essential demand

What do users have, and what do they want? These questions are the starting point of protocol design

Token Dynamics The flywheel runs both ways.

Spaces next week on DAO treasury accounting, in which I will make the argument that marking reserve network assets to $0 is total and utter nonsense and those DAO treasuries are obviously not empty, or broke and it’s not the same as minting new tokens.

Flash loaned price manipulations are the $5 wrench attack of DeFi

Micro-decentralization is the alignment of incentives at the protocol level, as in proof-of-work systems Macro-decentralization comes from protocols competing (e.g. Reflexer Open Dollar HAI 🌥️) Both approaches inhibit centralization, improving end-users' freedom

Emergent parasitism is a threat

Join us at 20:00 GMT for a deep dive into liquidity and its impact on token valuation and economic security! x.com/i/spaces/1nAJE…

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Economic security metrics are maturing Nakamoto coefficient, the number of entities (e.g. validators) an attacker would need to control in order to compromise a system - was an early attempt More useful metrics (e.g. cost-to-attack) allow comparisons between disparate systems