Trader Eugene: Long-term Investment in Utility/DeFi Tokens Requires Consideration of Three Elements

BlockBeats News, March 9th, Trader Eugene shared his investment philosophy on his personal channel:

「There has always been some debate about which practical/DeFi tokens are worth buying from a long-term value investment (HTF value) perspective. From a value investment perspective, you need to see the following three elements before investing:

1. It is absolutely certain that the token holders are the team's top priority (or at least on par with equity holders). As long as equity holders enjoy benefits that token holders cannot obtain, I will not blindly support a token for its value. This does not necessarily mean that token holders need to immediately receive direct token utility (such as buyback, dividends, etc.), but it is absolutely necessary to receive a clear and consistent signal from the team that the token holders are the ultimate beneficiaries.

2. The business model does not directly rely on the speculative nature of cryptocurrency known as the 「Ouroboros Cycle.」 This is where many so-called 「fundamental investors」 easily fall into a trap, because in a bear market, trading volume may drop by 90%, and then drop by another 90%, making any valuation based on a price-to-earnings (PE) ratio or a price-to-sales (PS) ratio meaningless. In addition, when the protocol's market share and momentum are at an all-time high, annualizing based on just one month's 「good」 revenue data for the protocol is the most foolish behavior.

3. Trust in the management's execution ability. Like any company, you need to do your due diligence and believe that the team behind the protocol has the ability to realize its vision, beat competitors through technological barriers, or superior execution.

So far, I believe that only a few protocols meet these standards, and I will buy these tokens at the right time. But for the other 99.9% of tokens, they can only be classified as part of the 「concentration camp.」」