Don’t be too anxious about the new high FDV phenomenon in the market. They may only be the “blunt knife” of the future bear cycle~

First, let me say two conclusions🔻

(1) It is more practical to consider the share released by the current cycle

(2) Fake financing to push up the valuation level of the public market is the biggest original sin of the market

📍You can see a very simple data and objective fact. The period from Q1 of 21 to Q3 of 22 is exactly the craziest period of the market in the last cycle

The valuation of primary market institutions at this time is actually affected by market sentiment, almost done with feet

And the active funds and market upturn in the last round also gave birth to many new institutions in the market. I talked about this point of view in the topic about FDV a few days ago, so I won’t repeat it

The valuation level from the primary market to the secondary market will increase, which is also a very reasonable thing. We can use the Rootdata data website to retrieve the valuation level of the agreement in this stage (21.03-22.10). There are already many valuations of tens of millions in the seed round

This provides a relatively high valuation reference for subsequent financing

So it is difficult for us to put the original problem Because it is directly pushed to the exchange, it is not something that the exchange can unilaterally suppress (no matter which one it is)🔻

🗝️Early valuations were hundreds of millions or billions, and it is normal to have a FDV of several billion when the second-level is launched, and there is no need to raise the previous round. Just take a few examples this year👇🏻

(1) Farcaster's first-level valuation has recently reached 1 billion, and the user trend of the product is not bad, but based on the current basic market, it is estimated at 1 billion, and it has reached the A round. I am very surprised

(2) Wordcoin's competitor, a protocol that focuses on palm print verification of real people, The founder's previous project did not succeed, but he has institutional resources and is now valued at 1 billion. Currently, no profit model has been disclosed.

(3) A modular liquidity protocol starting with E has inexplicably reached a valuation of nearly 1 billion (800 million) in the B round. Where can I go to talk about it?

This market is so magical that it can raise two or three rounds of financing before it is even operational. It is completely a zero-sum game with institutional participation. Valuation depends entirely on the "market dream rate"

However, we have to take into account the design of locking institutional shares. It is difficult for us to judge who will be the final winner of the market this week.

Of course, there are definitely projects and rounds that make false financing information, just to push up market expectations in the open market. The market's greater original sin is actually this type of project, because the actual cost of the institution will be lower and lower🔺

📍According to my speculation, at least one of the three cases I cited above is fake financing, because of the other party's previous record, it is hard to believe that this valuation level can be achieved before going online

How can we avoid it? Unless you do not participate in the market, don't care too much about the reference given to you by the FDV indicator

Market value is calculated based on circulation. We list the future release of new coins in this cycle. What are the projects that can release more than 40% within two years? I believe it won't be much, and the specific data can wait for me to collect them.

Then it is enough to take the actual maximum average circulation of this cycle as the long-term goal of this cycle. Many people are overly anxious about FDV.

In fact, according to past experience, in the downward market at the end of this cycle, the VC shares that have not entered the market circulation will be more uncomfortable. At this time, their actual holding value will fall after a period of upward market, which will be the "blunt knife" that prolongs the bear market cycle.

Note: The data material comes from BinanceResearch's previous market research report on FDV and low circulation