INTRODUCTION

A month ago, I started creating Google Sheets dashboards to track various narratives I was bullish on. Some of them started to gain traction on Twitter, so I thought it would be interesting to do a small report on every dashboard I have created, so here we are.

The cryptoasset market has grown exponentially in recent years, making it essential for investors to stay up-to-date with the latest developments in the space. To help investors make informed decisions, I have created a Bridge Token Dashboard that offers a complete view of protocols such as $ACX, $HOP, $SYN, $STG, $CELR, and $MULTI.

This report provides a walkthrough of the Bridge Token Dashboard and highlights some of the most important KPIs and fundamental metrics any investor should look at. I will also explain how the metrics were chosen and what insights can be gained from them. Whether you're a seasoned investor or just getting started in the cryptocurrency space, this dashboard will provide valuable insights that can help you make better decisions.

The report concludes that Across and Hop are among the highest potential protocols due to their capital-efficient design. I argue that, in addition to volume, capital efficiency is a more accurate measure of bridge usage and asset utilization, rather than TVL.

1. THE DASHBOARD

As you can see, the dashboard is divided into two main sections:

1. Market Data, Seed & Multiples: This section shows current prices of tokens, market cap, FDV, investor seed allocation, and vesting schedule. It also includes the multiples at which these tokens are currently trading. This is a crucial part of the dashboard as it aggregates information from the two categories and may highlight undervalued opportunities.

2. Fundamental Data: the second section focuses on KPIs that are specific to bridges, such as TVL, Bridge Volume, Capital Efficiency ratio, DAU, Revenue, and Token Incentives.

Let´s now explain each section separately, and look at some interesting data.

Market Data, Seed & Multiples

a) Price, Market Cap, FDV

The first key factor to consider here is the FDV of each project and the ratio of Market Cap / FDV. Generally, a lower FDV indicates less potential for a significant price drop. However, this information should only be the starting point for our analysis and should not be the only data we rely on. Although the crypto market is quite inefficient, there may be a reason why some protocols trade at a higher FDV than others (which we will examine in the Fundamental Data section).

Regarding Market Cap / FDV, except for $CELR and $SYN, every other token currently has a ratio below 20%. This suggests that supply inflation is likely to occur in the future (historical inflation data is provided at the end of the dashboard and in the next section).

b) Seed Investors

Now, let's take a closer look at the Seed Investors and briefly outline how their allocations were determined, as well as when future unlocks might occur that could affect token prices. While each Seed Investor received private funding, their terms, and characteristics varied, including:

• Across: On November 23, 2022, (before TGE) they announced a Strategic Partnership with Placeholder, Blockchain Capital, and Hack VC, which consisted of a $10M investment in exchange for 50M $ACX + 50M Success Tokens, vested until June 30, 2025. They invested at a FDV of $200M, implying a $0.2 seed price.

• Hop: On TGE, Hop announced its tokenomics, where they disclosed a 6.25% allocation to SeedInvestors, with a 1y cliff and a 2y linear vesting schedule, ending on June 10, 2025. The seed price was not disclosed.

• Celer: they disclosed on a blog post 3 different token sale rounds: 1) Seed sale on April 2018, for 11.5% of the total supply, at $0.0065; 2) Private sale on August 2018, for 15.5% of the total supply, at $0.015; 3) Binance Launchpad on March 2019, for 6% of the total supply. They are all fully unlocked and in circulation, so it´s not that relevant.

• Synapse: $SYN was originally distributed in Q3 2021 to $NRV tokenholders. The team states that there is no schedule nor locks left for private investors (if there were any), so it´s not that relevant, and in any case, it´s fully unlocked by now.

• Stargate: their docs state an investor allocation of 17.5%, with a 1y cliff and 2y linear vesting schedule, starting on March 18, 2022 (just 13 days at the time of writing this report).

• Multichain: it was rebranded from Anyswap, and they allocated 20% of their total supply to the shareholders of the Anyswap/Multichain company. I couldn´t find information on their token release schedule or seed price.

c) Comps Valuation Multiples

The purpose here is to have a quantifiable valuation screen to quickly view bridge tokens that may be undervalued in comparison to their peers. There is a multiple for every fundamental KPI.

Fundamental Data

To begin this section, it´s important to state that crypto is one of the least efficient markets that exists right now. This is attractive but should be noted that what drives price appreciation doesn´t always have to be fundamentals. This dashboard focuses on a fundamental valuation thesis, but one should never base their decision of investing solely on this. It helps for high-conviction plays, but in the end, price appreciation occurs when there are more people buying a token than selling it, and there are many variables (apart from fundamentals) that can lead investors or degens to buy a token.

As an example, other drivers include:

• Supply shocks in a token (a protocol suddenly decides to burn 90% of its supply).

• Narrative-driven thesis (dependent on catalysts, like the LSDs narrative and them becoming predictable CF assets with the ETH Shanghai upgrade).

• Community-driven meme tokens (70-90% of the token allocation to retail via an airdrop).

• VC Treasury Management Deals (LIDO did various of these and the announcements were followed by big price rallies because they normally involve large vesting schedules, and help to align incentives).

a) TVL, Bridge Volume, Capital Efficiency Ratio

It’s commonly assumed that Bridge Volume and TVL are the top metrics when looking at bridges, where higher TVL is thought to be indicative of growth. However, I believe that in addition to volume, a more accurate measure of bridge usage and asset utilization is capital efficiency, rather than TVL. Fundamentally, the better bridge is the one that requires relatively low capital to do a lot of bridge volume. This brings a lot of advantages:

• Lower user fees: Since capital has a cost, protocols that require more liquidity to process the same volume must pay higher fees to liquidity providers (LPs). These costs are ultimately borne by the user. In contrast, a bridge that requires less capital can offer lower fees to users.

• Increased LP yields: A bridge that achieves a high volume of transactions with a lower TVL can generate substantial yields for LPs. For example, a bridge with 50% of its TVL utilized daily can offer an APY of approximately 20% (at 0.1% LP fees), while one with 15% utilization has an APY of less than 6%. You can charge lower fees to the bridge user but pay higher fees to the LPs because due to requiring less capital, the total amount of fees coming from bridge volume gets distributed among lesser capital. This enables the ability to retain capital organically (without liquidity token incentives).

• Less security risk: even though LPs still have security risk, the total amount of TVL that is risked for hackers to get is less, as there is less capital at risk. In terms of centralization risk, Hop and Across are both optimistically designed bridges, while in other bridges like Synapse, withdrawals (or “bridge transfers”) are validated by an EOA, which is more centralized by design (L2BEAT).

b) DAU, Revenue, Token Incentives / Inflation

2. THE GRAPHS

CONCLUSION

In summary, this report provides an overview of the Bridge Token Dashboard, which facilitates investor insights into various protocols such as $ACX, $HOP, $SYN, $STG, $CELR, and $MULTI. The dashboard is designed to update automatically on a daily basis, allowing users to monitor any changes in fundamentals that could potentially result in overvalued projects.

Based on the analysis presented, I believe that the protocol that emerges as the most capital efficient in the bridge/cross-chain messaging space will ultimately be the winner. This is because such a protocol would be the most cost-effective for users while also providing organic returns for LPs. Across and Hop are the clear winners here, with Hop showing a higher average annual Capital Efficiency ratio in 2022 and Across exhibiting a higher peak utilization ratio, indicating that it is best suited for high-stress conditions. I think this can serve as a long-term strategic advantage that can help both protocols grow market-share and attract bridge volume and TVL.

Additionally, Synapse is also interesting as they announced the launch of the Synapse Chain, which will create a cross-chain interoperable ecosystem, secured by $SYN, connecting all chains, but that´s still in the works. Furthermore, their analytics page is also noteworthy.

Finally, I would like to express my gratitude to everyone who has taken the time to read and appreciate this report. Thank you!