As cryptocurrency investors, one should understand the financial situation and key metrics of projects, which is why we have this in-depth understanding of agreements related to ARB.
Currently, there are still many significant accounting-related issues in our industry that have not been answered.
For example, how should the protocol account for base fees, what is the correct way to think about SBC, and how should we consider the circulating supply of tokens?
These are all the questions we are trying to answer through modeling.
📍We will study ARB in 4 directions:
1) Comprehensive on-chain cash flow statement, balance sheet, and income statement for unified financial research.
2) KPI, user activity, details of token supply, etc.
3) ARB Supply Statistics
4) DAO Expenditure
1) Financial Statement Research 🔻
👇🏻In the chart below, you can see a complete set of on-chain financial statements. The following is the revenue section of the income statement, and for me, analyzing the revenue structure of Arbitrum is very interesting.
Let me briefly explain the revenue structure of ARB:
L1 Base = Expected cost of using the L1 layer
L1 Surplus = Used to prevent the actual cost of using L1 from exceeding the original expected cost.
L2 Base = Minimum transaction cost on L2.
L2 Surplus = Revenue increases with the level of congestion.
It can be seen that a large portion of the revenue from the tester is basically transferred to L1. The important driver of ARB revenue is related to congestion (L2 Surplus).
2) On-chain Activity 🔻
There are not many surprises in terms of costs. One point worth noting is that we decided to differentiate between token payments to the foundation/team and payments to investors.
We view the foundation as a high-cost service provider and employees as individuals who should appear on the income statement. Although tokens are also paid to investors, some of whom may sell these tokens, we see this as similar to equity transfer, reflected on the balance sheet.
3) ARB Supply Statistics 🔻
In terms of supply, we track circulating application volume, market capitalization, and critically, the T+1 year circulating supply.
Using known attribution timelines and DAO expenditures from the past 6 months to predict T+1 values. This will cause the ARB supply to grow by 36% in the next year.
4) DAO Expenditure 🔻
On the DAO expenditure tab, we track and categorize all expenditures.
It is worth noting that the DAO has allocated $150 million worth of ARB tokens for ecosystem incentives, accounting for 78% of total DAO expenditures.
We further tracked how entities were funded through programs such as LTIP and STIP, allowing our advisory team to track and return over 3 million unused incentives to the DAO.
✔️Using modeling to conduct detailed financial data analysis of the project agreements we cover, which will be very important for our investors.
🔹Original link: https://twitter.com/MikeIppolito_/status/1853889835049877647?t=Usi_YakqGu88olbZiF4o8A&s=19
