Sorry.! What do you mean by this?
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Nope, not gonna happen.
They need to first justify that MC is the right matrix to value the project. when I can with 5K USD ruin the market cap by 20%.
The fairer valuation of stride should be based on The times-revenue method which determines the maximum value of a company as a multiple of its revenue for a set period of time. The multiple varies by industry and other factors but is typically one or two. In some industries, the multiple might be less than one. You can read more about the Model here
From the rough calculations, I have the figures ~7 million USD. Now the question is are the current STRD holders willing to do this?
Stride Upside Stride has a great Upside as a current winner among the LSDs, so their annualized revenue can increase from 700K USD (considering their numbers right). This factor should be included in the fair value calculation
Stride current value driven by Cosmso hub No one can deny that Stride has been a winner among the LSDs by acting fast, but we also know that Cosmos HUB has been a great help with the success. Hub has onboarded Stride on ICS and validators are running the chain free of cost, we have given them 450K Atom for bootstrapping. Currently, 80% of the Stride unlocked value consists of Atom. These all factors should be considered to value Stride.
Stride value= Valuation (Time reverse method) + Stride Upside - Stride current value driven by Cosmso hub
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The idea itself is ok, but we need the details (How, when, etc) of execution before making the comments.
view from strd holder:
If the core development team thinks that these two directions can be tried in the future, I will also be happy to give my answer and oppose the merger. stride needs to maintain its independence for the following reasons.
- Being deeply bound to the cosmos hub is not necessarily a good thing: a) The future of the cosmos community is not necessarily atom, but may be a chain that adopts the IBC protocol or uses the cosmos sdk. b) The merger with hub loses independence and impartiality, which is likely to affect the cooperation of other sovereign chains (such as osmo/dydx).
- At present, there is no merger and acquisition plan that has the best of both worlds for atom investors and stride investors. No one is willing to give up their own interests, and it is even more difficult considering the current very poor hub community pool.
- There is no data or examples to prove that the merger can greatly improve stride’s decentralization. stride has always been committed to decentralizing tokens and distributing tokens to active people. If the governance is changed to through atoms, then the previous efforts will be in vain. Right?
- The development costs and negotiation costs required for the merger are too high. If these resources are invested in other more meaningful work, the value generated may be higher. Don’t forget that stride is not perfect, there are still many Functions need to be optimized, such as decentralized distribution validators and so on.
Does this model take into account forward revenue projections? Imo this is highly relevant in the case of Stride, as current revenue is dramatically underrepresentative of Stride’s revenue potential in the near term (LSM literally just launched, stTIA and stDYDX expected).
Re: mcap, if you’re concerned about someone “wrecking the market cap with $5000,” a simple solution here is to use a 10, 14, 28 day rolling twap price for both assets, which is fairly common in situations like this to prevent manipulation of markets.
mcap (less tokens not in active circulation like strategic reserve, etc) is absolutely relevant here.
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I see a lot of noise in this entire thread.
Stride makes 700k anum? Stride is the definition of a distressed asset. i.e. Toxic
What is strides earnings once adjusted for EBIDTA?
700,000$/anum means nothing, if we do not see the rest of the balance sheet. Strides burn rate is 500k per month. In a distressed asset case, STRIDE would be worth maybe 100k USD. Its a bleeding ship, with a high burn rate, and almost no capital generation compared to the liabilities it has on its balance sheet. 70m valuation is a joke, only a crypto bro who LARPs as a Jpeg trader would fall for this. The big boys are here, and we going to discuss real valuations, as known in the real world.
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This guy is the only other adult in the room, and his valuation is ‘nice’ because it does not show the liabilities Stride has per month/ anum. In fact, in the adult world, this discussion would not even start with out the entity in question publishing their entire balance sheet according to GAAP.
Because they failed to disclose balance sheets according to GAAP, FASBA, and the real friends and family rate (FNF) that early funders got, it should be taken as an attempt for an unqualified team and venture capital bros to get an easy exit using the liquidity of others. The ability to build a product, is not the full scope of being a ‘great team’. The other 90% of the coin, is managing your balance sheet, which few teams seem to understand, or care about, or they know they can abuse uneducated speculators new to finance.
We all know ATOM is the real money in the Cosmos, as it is the only asset which can discharge debt compared to any other asset in the ecosystem. Thus their request for a golden parachute via the asset which can deliver that debt relief. Just ask Ethan about this, he refuses to say this about any project, but will discuss it in quiet when trying to dump his CoFi Grift on speculators. You can engage Ethan about this with his Mimbres school class.
A more mature valuation of Stride, as it meets the full definition of a distressed asset would place it under 2.5m$. Esp if the counter party considers the macro environment. It is clear STRIDE and the venture bros who funded it, built model based on cheap money and low interest rates; and is now stuck with the bag.
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For those in startups…
~100% of Silicon Valley and the tech ecosystem at large are a low interest rate phenomena in the last 15 years.
Most of the companies were socialized losses.
The adored tech companies were not productively profitable or moated for the amount of capital invested and time duration passed.
You could have bought the S&P500 and took a stock loan to buy real estate and outperformed the vast majority of them.
Gitlab, Palantir, Affirm, OpenDoor, Grubhub, Stripe, Airbnb, Uber, Lyft, Coinbase, etc… cannot suddenly turn on a viable* profitability switch.
The companies that may have been useful are not technology companies as much as glorified gov’t contractors – all of fintech.
Very hard to find real technology companies.
It is non existent. There was never a free market, just men in the casino and those cockroaches who attempt for the pickings.
*Viable referring to the time-value of money vs. a reasonable portfolio of S&P500 and stockloan to buy real esetate against it.)
Facebook, Figma, and Instagram seem to be the only viable ones in the last 15 years-ish.
Most of these startup mentors and advisors who have surfaced have no conspiracies around growth marketing or technology - and as such - their advice is worth nothing.
Go hard in the paint at the problem you seek to solve and you will discover fortunes.
Be unwavering in knowing the technology stacks of the world and vindictive about framing a problem more accurately than those prior founders before you within the context of those technologies.
The habits of those affinity scammers should be closely noted, on their profiles - do they closely tailor and tag all the previous socialized losses “ex-uber” - “Ex-openDoor” - etc…
-KUMAR
I like the spirit of this post and appreciate the hard work that many are doing towards AEZ Alignment. I also have a lot of respect for the Stride team and think their ability to execute is super valuable.
That said, taking this post at face value, it’s really hard to make sense of the numbers. I am attempting an analysis here, and maybe folks with more info and insight can help fill in some of the gaps.
Currently, Stride is trading at an ~88.5x net revenue multiple. Comparatively, Lido is trading at a 23.7x multiple (Defi Llama):
| Lido | Stride | |
|---|---|---|
| Market Cap | $1.374b | $62m |
| Net Revenue | $57.8m | $700k |
| Net Rev Multiple | 23.7x | 88.5x |
If we are to incorporate stTIA and stDYDX per @RoboMcGobo’s comments, which, is very hard to do without knowing the LST demand and inflation schedules for stDYDX/stTIA, the numbers improve but still seem a bit away:
| 20% LST, 8% Inflation | DYDX | TIA | Stride |
|---|---|---|---|
| FDV | $2,750,000,000 | ||
| Market Cap | $344,526,096 | $165,000,000 (6% genesis) | |
| stDYDX / stTIA (20%) | $68,905,219 | $33,000,000 | |
| Gross Rev (8% inflation) | $5,512,418 | $2,640,000 | |
| Net Rev (10%) | $551,242 | $264,000 | $1,515,242 |
| Rev Mult | 41.4x | ||
| Comp. Market Cap (23.7x) | $35,911,235 |
| 25% LST, 8% Inflation | DYDX | TIA | Stride |
|---|---|---|---|
| FDV | $2,750,000,000 | ||
| Market Cap | $344,526,096 | $165,000,000 (6% genesis) | |
| stDYDX / stTIA (25%) | $86,131,524 | $41,250,000 | |
| Gross Rev (8% inflation) | $6,890,522 | $3,300,000 | |
| Net Rev (10%) | $689,052 | $330,000 | $1,719,052 |
| Rev Mult | 36.4x | ||
| Comp. Market Cap (23.7x) | $40,741,532 |
I am curious to see this fleshed out more. Burning some portion of the 87.6m issued tokens seems like a necessary starter for further analysis of a full acquisition here.
Lastly, the “decentralization” claim here doesn’t seem to hold much water. As others have stated, the Hub goes from having a neutral LST provider to an enshrined one. Stride is also already an independent org contributing to the AEZ, and has more tools at its disposal with a native governance token and ownership of net revenue. It would be helpful to see evidence of “anxieties about the control of Stride”, as it seems this hasn’t really materialized.
I would also be curious to hear how the Stride team plans to contribute to the Hub outside of the Stride satellite chain, as I think that will help make a stronger case here. If the main focus is operating Stride, it seems like the Hub can get that benefit without spending $60m, as Stride’s business is heavily dependent on ATOM and the AEZ.
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I just have to say that it’s great to see some actual numbers being put up on the board after 72 posts haha. This is a well-reasoned and insightful analysis, and while I think there might be some disagreement on some of the forward-looking revenues (which, as you said, are pretty rough to calculate anyway), this represents significant progress already.
Also want to highlight that it’s pretty neat to see that we’ve collectively gotten this far without any input at all from anyone at Stride Labs or Informal Systems. Shows that this type of social coordination is possible if the community is passionate enough.
I’m going to be working with @Rarma to quantify this more exactly. He’s going to grab concrete numbers on the number of STRD tokens in all of these varied token pools that are wholly protocol owned. In theory all of these could be burned with no corresponding ATOM minted, subject to any premium that governance may vote to assign.
Though the tentative “finger in the wind” numbers based on Stride’s emission chart show that this could be as much as 48% of the max supply of STRD. Would be very interested to see your numbers adjusted for that reduction in supply.
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Show the liability side of the balance sheet please, and stick to GAAP.
There is no volume, any penetration depth of liquidity can tell you these valuations are inflated. Less than 0.1% of the supply can drop the asset value by hundreds to thousands of basis points.
Fair market value, must be defined by back testing and pen testing real available liquidity.
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If you want to buy a company or use tradify methods, you buy the total market cap + premium when you OPA a company. Not a single shareholder would admit to sell at a loss in normal conditions.
You deciede if is cheap or not according your models, multiple, NVP or wathever fancy method you want in order to get an intrinsic value, but you DON’T use the model in order to set the buy price price, you use it just to check it current price is worth for you to acquire.
Again, stride community will never accept anything below current market cap. Minimum we want a HUGE premium to compensate the loss of what this gem is.
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Asking for some input from folks on the ATOM end of this. I’m struggling to understand the argument that STRD should be valued less because it doesn’t have sufficient liquidity on the open market.
The Hub would be acquiring the entirety of the STRD supply on a quasi-OTC basis and then burning it, meaning inability to later sell that purchased STRD is irrelevant (it won’t exist anymore).
When traditional companies merge, nobody evaluates the depth of the company’s stock on various brokers’ orderbooks as part of the measurements of that company’s value. They don’t need to. No shares of that company’s stock are being sold on the open market. You look at various other objective metrics (revenue / projections, debt, price / book, etc), and issue shares of the acquirer to shareholders of the acquisition target according to the mutually agreed upon valuation.
Can someone explain to me why this should be any different in Stride’s case?
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It shouldn’t and there is no other explanation than they want to steal us.
Clearly being diluted to buy current Stride is a prop that wouldn’t pass in Atom governance since they believe it should worth way less (just because they don’t have that much money to spend).
And on the other side, Stride dont want to be bought, and that is the main point of discussion. Why even bother to talk about acquisitios when we dont want to be acquired.
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Nah
STride is not worth 70m Because its burn rate per month is far higher than any cash it produces.
GAAP is standard. Its why your going to be stuck bag holding assets like this, and will fail to understand the mark up / mark down accounting rule which is applied to bitcoin now, and allows pensions and firms to entertain a position with out inheriting downside risk and volatitly of the asset class. Your tax authority uses GAAP. So should you.
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Appreciate the attempt to try to find a logical valuation on this @0xpatrick. It is disappointing that the ones that proposed this aren’t commenting on it and letting everyone else sort it out. It tells me that either none of them sorted it out beforehand or/and they have no idea how to sort it out after seeing all this comments.
I also want to highlight here @RoboMcGobo @moonz and @Kam for their fantastic responses and questions, that sadly have been ignored by the proposers of this plan.
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Don’t confuse value and price.
Value if a subjetive meassure that vary from person to person, model, future estimations, and incredible sensitive to any input you use based on YOUR beliefs.
Price is what the total market deciede a stock or token worth, and is what anyone have to pay if they want to acquire it at the present time.
You can’t produce a valuation until there is a clear published and audited balance sheet. STRIDES burn rate per month is way higher than any rev they produce. It is a distressed asset, and is why they seek 70m USD in exit liquidity, via the asset which can handle the ability to discharge the debt. That happens to be Atom in this eco system.
Where in your world, does anyone even entertain valuation, M&A with out seeing an audited and published balance sheet?
To be fair to them, from what I understand they’re holding on to aggregate feedback first. They do fully intend on stepping in and working on this with us, AFAIK.
It’s a polarizing proposal though, so I think the laissez-faire approach makes sense at least initially. They want to listen before they speak.
Edit: Appreciate the shoutout as well, Luis 
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You can ignore GAAP all you want. You are just a grypto bro if you do, and look very silly in the eyes of professionals. Fine with me, just makes the other side of the trade much easier to hedge for us.
There is no where in the world, where you even begin discussions of M&A with out an audited balance sheet. Again strides burn rate is > then the cash they produce. Its a liability as defined by GAAP
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