Delphi Digital


Joo is specialized in DeFi with his strong finance background. He delved into crypto in 2016 and DeFi in 2020. He combines fundamental and trend analysis to identify opportunities. As a Research Associate, he provides clear insights into DeFi fundamentals.

Yeah, it's definitely an Aptos beta play here. I like their close connections with the Aptos Team, which I think will benefit them in the long term.

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"which rose from $1.2B in 2021 to $2.6B in 2022 (117% increase)"

I think a lot of the industry's growth can be attributed to Covid which quickened the adoption of tech as a new way of doing business. Casinos were basically empty during covid, so Stake was positioned well to serve gamblers stuck at home. Also, the ease of access is a plus point; no need to travel down to gamble, and gamblers can bet anytime they want.

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"Rollbit does not possess a specific license to operate a futures exchange"

They operate without a license but can be accessed by most users. It's just the casino and sports betting has certain restrictions.

I think their TAM is huge; they do 2-4% of total futures volume for BTC and ETH on a day-to-day basis. But based on the legality of it, they will definitely attract some regulatory attention if their volume share is larger.

Despite that, they're still primed to grow their futures volume with a solid trading product and high leverage that's not offered elsewhere.

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It's dependent on the country's law, where if it is banned, it cannot be offered. Certain European countries and USA are restricted and/or blacklisted. Do check out the list below. (Do a ctrl+f on "RESTRICTED REGIONS AND TERRITORIES"

Appreciate the feedback. That's definitely important to consider for stakers, especially in countries that have similar taxation schemes.

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"However, if interest rate cuts begin, the SBE will likely not sustain its current levels of buybacks."

It could become a risky play for them. Firstly, they'd need to hold longer-dated U.S. T-bills.

This likely reduces their interest earnings as U.S. 10Y T-notes are ~4.5% vs 5.4% U.S. 1M T-bills. This implies a -16.67% opportunity cost without accounting for hedging costs yet. Also, hedging for short-dated T-bills is not impactful due to their shorter duration. They'd also need to consider and 'guess' when the rate cuts might happen.

Hence, I think the risks, costs, and complexities of hedging outweigh their current strategy to simply farm T-bills.

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"This deepens the liquidity available while ensuring a steady buy pressure on MKR"

Yeah its just buying MKR using DAI from the UniV2 DAI-MKR LP, and adding liquidity with additional DAI.

They've improved their gas expenditure by increasing swap size from $5K to $20K and are actively evaluating the SBE performance. You can take a read at these forum posts.

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"Examining the normalized price performance since RLB’s announcement, we observe an initial surge for RLB post-announcement."

I agree with your points. I was trying to highlight that post-announcement for projects doing buybacks can be a positive signal. MKR and RLB have had highly positive returns since their announcements.

100% on RLB up and MKR down as well. Since 67% of MKR's revenue derives from RWAs a.k.a majority T-bills, IR cuts are terrible for MKR. It will significantly affect their SBE buyback rates.

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"Revenue Share"

They distribute it to $UNIBOT holders. Just by holding $UNIBOT, you're eligible for the rewards.

Here's the exact quote from their website "Holders receive 1% of token swap fees (2% for those who migrated on-time), 40% of transaction fees, and 25% of referral fees as rewards. Rewards are proportional to the amount of $UNIBOT held."

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"RLB Performs Well After Buyback and Burn Announcement"

The chart is static, not a live chart.

  1. My question is, as crypto/defi matures, are we likely to see projects settle into 'value' vs 'growth' projects?

Rather than putting projects into those buckets, I would evaluate them on a fundamental basis, such as revenue quality, its bull case perspective, is or will be PMF, and risks of failure.

  1. Is the P/S metric on Tokenterminal a productive way to value the tokens of project that have a return to token holder strategy?  

I don't use their P/S metric as each project can be viewed differently depending on how that project returns value to token holders.

E.g. Lido's P/S is 31.5x, but if we consider P/E its 63x as they only share 50% of yield profits with node operators. For GMX, P/S and P/E are both 23.82, since Revenue = Earnings.

Your last suggestion is interesting. I will look into it :)

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"However, if interest rate cuts begin, the SBE will likely not sustain its current levels of buybacks."

Firstly, it's anticipated that the Dai Savings Rate (DSR) will decrease from the current Enhanced DSR (EDSR) of 5% in line with a potential downturn in U.S. interest rates, to avoid a mismatch in interest yields. As the DSR declines, demand for DAI may wane as holders look for higher yields elsewhere.

Moreover, Maker's principal revenue stream stems from Real World Assets (RWAs), predominantly invested in U.S. Treasury bills. A drop in yields would substantially diminish Maker's revenue prospects, consequently slowing down the Smart Burn Engine due to reduced protocol surplus.

As the revenue-generating capacity of RWAs faces pressure, it's probable that Maker will pivot towards focusing on-chain leverage. In scenarios favoring risk-on investments, Maker could potentially offer more competitive borrowing rates compared to traditional money markets like Aave and Compound.

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I don't have an exact number for you, but according to Arkham, their cold wallet holds 7.64% of supply currently. But this is likely not the full picture, they do have BNB on the BEP20 chain. 

The address that they burn from can be seen here.

I'm unsure whether they will return to purchasing off secondary markets. So the question will be will BNB total supply hit 50% first, or Binance's treasury runs out of BNB. I'm personally leaning towards the first outcome.

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"Gossiping transactions to other validators."

Yes, gossip actions are the same.
The full node participates in gossips alongside validators, but do not participate in the consensus.

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"The liquidated dNFT will have its collateral and debt socialized among other dNFT holders within that pool"

Yes you're right. :)
The pool will receive the liquidated collateral and debt on a pro-rata basis. And the pool benefits as they're essentially purchasing cheap collateral thru receipt of debt.

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"his transfers the natural yield of stETH towards holders of the stablecoin, generating a base APY of ~7.7%"

I think you mean 7.7%?

so 1 stETH generates ~4% currently. But they're only allowed to mint up to 150% collateralization ratio of eUSD.

For example. $10M of stETH earns $400K of yield annually.

But, only $6.667M of eUSD max is allowed to be minted. $400K/$6.667M returns ~6% to the stablecoin.

Numbers are lower now as staked ETH yields are reduced.

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Yes, each SubDAO will have their own governance token. They will be paired with MKR for LP as a SubElixir (aka LP) token.

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"$84M/year to currently $19M/year."

The $36M will be from various stability fees (or in simpler terms borrowing interest) charged to collateral e.g. using ETH to loan DAI.

Even though they're paying out 5%, partially, some of them are funded by more loans too.
You can check the fee breakdown here.

On the annual profits part, i think you're missing out on the EDSR interest cost, which is also an expense.

Using the 2nd green highlighted part as an example, $165 - 63M - 45M = $57M

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"tail-end default"

There has been a proposal to offboard certain legacy loans.

Also, i think its tough for Maker to close out those loans immediately. These riskier loans are usually given out to small companies. Closing out the loans prematurely and demanding immediate recourse is unlikely and can financially impact those companies and hence the loan.

The best course of action is to keep the financing as it is, until payment is due.

Joo has not authored any research reports yet.