How to invest in DeFi: A first principles approach

Using a data-driven framework to evaluate Crypto projects

Evaluating Web3 projects in DeFi, especially if they are early is challenging. Having invested in ~30 projects, I realized that while a lot of the core fundamentals of traditional framework remain intact - a lot more additional data-driven analysis is needed for each project type.

In this post, we will go through:

1. Traditional/Web2 investment framework

2. Evaluating a Crypto project (data-driven checklist for Web3 projects)

   1. Case Study 1: Unit economics of a DEX

   2. Case Study 2: Comparative metrics for DeFi tokens

   3. Case Study 3: L1/L2 ecosystem comps

   4. Case Study 4: DeFi business models