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Crypto Thesis
Initial coin offerings (ICOs) are much hyped. As with most hype, we are left asking what’s justified and what’s not.

On the one hand, an ICO is a novel funding mechanic that can advance the development of innovative software. It also takes the funding process out of the hands of venture capitalists. And the coins that trade after an ICO enable and can incentivize the adoption of new decentralized models and services. All of which is interesting.

But then there’s the question of whether a decentralized approach to certain categories is differentiated and compelling or ultimately a solution looking for a problem. And on top of that there’s the fact that speculation in crypto assets inflates prices and distracts from the key question of how best to build a sustainable decentralized service ecosystem.

With this Playlist, we ask a consistent set of questions across various decentralized app (dApp) sectors:

First, what are the dApps competing to become the dominant provider in a given category? Second, what is the size of the opportunity they are competing for? Third, is the sector ripe for decentralization? Fourth, what based on the Quantity Theory of Money can we estimate to be the fundamentally derived value per token of a given coin? And relatedly what do current market prices imply about investor expectations for the future?

We started with the Decentralized File Storage sector for a number of reasons. We believe it is a category in which the logic of decentralization is readily explored, in which the largest ICO to-date has taken place, and in which some of the largest venture capitalists in the world have placed bets. We explored those in depth in a Rad.Weekly note titled What case are Sequoia, A16Z, USV and others underwriting by buying the FileCoin ICO pre-sale at $0.75 per coin?. Most of all, however, we believe Decentralized File Storage sets the table for a conversation that we will explore every month with new coverage and with updates to our existing analyses.

"This kind of analysis is sorely missing from the ICO conversation. More of this plz."
Jake Levine