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Protocol Value Model

Understand how value is created, exchanged, and where it settles and why.

Objectives​

Focus on understanding how value is created, aggregated, and distributed over tokenomics and charts

  • Attempt to evaluate protocols as you would traditional software or marketplace businesses
  • Look for sustainable revenue streams and paths to profitability
  • Consider the protocol's ability to create and capture value in its target market
  • Assess the long-term viability and adaptability of the business model

Overview Checklist​

Revenue generation

  • How does the protocol generate sustainable revenue?
  • Are there multiple revenue streams?
  • Is the revenue model tied to real economic activity or value creation?

Market creation and facilitation

  • Does the protocol create or facilitate a new market?
  • How does it connect supply and demand sides?
  • What unique value does it provide to participants?

Economic moat and competitive advantage

  • What gives the protocol a sustainable edge over competitors?
  • Are there network effects or other barriers to entry?

Scalability and growth potential

  • Can the protocol's business model scale efficiently?
  • Is there a clear path for user and revenue growth?

Cost structure and profitability

  • What are the protocol's main costs?
  • Is there a path to profitability or self-sustainability?

Adaptability and innovation

  • Can the protocol evolve to meet changing market needs?
  • Is there a mechanism for continuous improvement?

User acquisition and retention

  • How does the protocol attract and retain users?
  • Are there strong incentives for long-term participation?

Regulatory considerations

  • How resilient is the business model to potential regulatory changes?
  • Are there compliance measures in place?

Team and governance

  • Does the team have the necessary skills to execute the business model?
  • Is there a governance structure that allows for effective decision-making?

Token utility within the business model

  • How does the token facilitate or enhance the core business functions?
  • Is token value tied to the protocol's success in a meaningful way?

Value​

How does value flow? Where and how does value settle and accrue?

  • What are the key drivers of value?
  • How does the protocol attract, capture and grow value?
  • What are the key risks to the protocol's value proposition?

Leadership​

  1. Clear intentions and reasoning why
  2. Validated pain points to navigate
  3. Consistent communication of intent
  4. Consistent alignment of actions with intentions
tip

Honest and driven to deliver on their potential to contribute to a greater good

Business Development​

Business Development in the crypto industry involves identifying, pursuing, and capitalizing on new business opportunities to drive growth and revenue. Here are the key aspects:

  • Identifying Opportunities: Researching new markets, partnerships, and products that can expand the company's reach and revenue streams.
  • Strategic Planning: Developing and implementing strategies to capture these opportunities, often involving market research, trend analysis, and competitor analysis.
  • Networking and Relationship Building: Building and maintaining relationships with key stakeholders, including clients, partners, and industry influencers. This is crucial for generating leads and closing deals.
  • Collaboration: Working closely with other departments such as sales, marketing, and product development to align business development strategies and ensure successful implementation.
  • Market Research and Analysis: Staying updated on industry trends, regulatory changes, and technological advancements to inform business decisions.
  • Negotiation and Deal Closure: Negotiating and closing partnership deals, contracts, and other business agreements

Attachments​