Author: Flood Capital
Compiled by: TechFlow
My favorite altcoin is $BANANA. I first wrote an in-depth tweet about it about 4 months ago when the price was $23, and since then, BTC is up +35%, while Banana is up over 100%, making it one of the few altcoins currently outperforming BTC.
Below are the latest investment cases.
For those unfamiliar with @BananaGunBot, it is often considered the best TG trading bot and is currently ranked#7by 1-day volume. But more importantly, they are building order flow and infrastructure to compete with DeFi giants like the Uniswap frontend and 1inch.
Despite being just a TG bot last week, they completed the fourth most trades and second most trades through the Ethereum DeFi frontend!
This is where things get interesting, BG is developing a full-fledged trading terminal web application which will massively expand their addressable market.
With >7% market share through Telegram alone, I expect Banana Gun to start surpassing Cowswap and even 1inch once their web app launches.
The web app will cater to a whole new group of users who want to transact through wallets like Metamask, offering them a host of new features.
Last week, Banana’s trading volume exceeded $365 million, and it collected $2.3 million in fees. The annualized fees are as follows:
$19 billion in trading volume
$120 million in fees
40% of fees will be returned to $BANANA holders, making it one of the most profitable applications in all of DeFi and directly adding value to the token.
$BANANA currently has a 35% APR, which means roughly 3x the distribution earnings! Even if you apply that to a 5-6 million FDV coin, it would only be trading at 5-6x. The market is telling us it doesn’t believe these revenues will grow or repeat in the long term, but I disagree.
I actually believe that Banana’s earnings and market share will grow. Over time, I think the market will revalue them to the same or even higher price point than leading DeFi companies like 1inch and Uniswap.
Let me explain why.
First, BG has an extremely strong moat on Ethereum. They dominate in sniping new token releases and are at the top of the block about 90% of the time.
Once again strengthened dynamics:
More users use Banana for sniping
Larger bundle/tip sizes
Win more first batch bundles
More users use Banana
Therefore, as long as new tokens launched on Ethereum continue to increase, Banana will be in a very good position. They also conduct all trades through their own private RPC, which makes their order flow extremely valuable.
This results in Banana having a 40-60% market share compared to all TG bots on Ethereum and 7% of total frontend volume on Ethereum.
With the launch of the web app, I think this will take this a step further, giving Metamask users a full on-chain trading terminal with great execution.
Banana has won Ethereum and is starting to focus more on Solana in addition to web applications. Currently, Banana only has about 2.5% market share among TG robots on Solana, but it is about to launch a new SOL product.
Banana is hoping to replicate the success they have had with Ethereum, and if they can get their market share to level X, we saw last week how much more revenue that would add:
10% = +821,000
20% = +1.64 million
30% = +2.46M (will more than double income/revenue)
Banana Gun’s dominance on Ethereum, new Solana bots, and webapp make me excited for its future. It provides excellent exposure to memes (via sniping) and is slowly becoming a new class of protocols (aggregators) that trade at a high premium compared to TG bots.
For example - Banana Gun vs 1Inch
Market value = 105 million vs 530 million
FDV* = 260 million vs 670 million
Ethereum market share = 7.3% vs 17.6%
30D annualized income = 67 million vs 180,000
Banana's current Full Distribution Value (FDV) is 8.9 million tokens, but 5.5 million of those tokens are in their treasury and they continue to burn tokens that are not unlocked from the treasury. I think it is reasonable to estimate the true FDV to be 5-6 million tokens.
** Information is difficult to find, only 30-day annualized data was obtained from @tokenterminal.
All in all, I’m super excited about Banana Gun.
Growing user base, volume, and costs
Exciting new products
Forming a strong moat through ETH sniping
Risk-free investment and good supply structure
Direct value accumulation of tokens
As always, DYOR, this is not financial advice, just sharing my own opinion.
