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SBF
@SBF_FTX
2) a) Say that you make $5b and have $5b of one-off expenses. Earnings: $0. b) Now say your mkt cap goes up from $1b to $50b. Earnings: $0. c) Now say you issue $10b of equity at a $50b valuation. Earnings: $0.
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SBF
@SBF_FTX
3) d) Say you also issue a token and own all the tokens. Earnings: $0. e) Now that token increases from $1b to $50b mkt cap. Earnings: $0, but $49b of unrealized gain. f) Now say you sold $10b of the token @ $50b val. Earnings: $10b!
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SBF
@SBF_FTX
4) But (f) and (c) are really similar! Also: (a), (b), and (e) are all really similar. But you get unrealized gains, or equity gains, by issuing equity or tokens that people already knew would go up!
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SBF
@SBF_FTX
5) What you've done is taken the expectation of future gains, and turned them into something with a market price. So you sorta-kinda-maybe realize all your future gains now.
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SBF
@SBF_FTX
6) So, for instance: who's made more in 2021 so far, OKEx or Coinbase? Well, I'm not sure. I'd guess Coinbase had higher revenue, though--maybe $1b to $500m. So maybe the answer is Coinbase. BUT -- OKB is up about $3b in market cap this year! And $3b > $500m.
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SBF
@SBF_FTX
7) But this is kinda weird. OKB is measuring _future_ performance, but Coinbase earnings are _current_ performance. OKEx gets to add all of its future performance as an (unrealized?) gain because it's made explicit with OKB. So, ok, maybe the answer is OKEx?
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SBF
@SBF_FTX
9) So, to get back to the original question: Which had a better year: Coinbase, or Chainlink? Coinbase made waaaay more revenue. But... LINK is up about $18b in FDV. If Chainlink still has ~50% of the tokens, that's a ~$9B gain, way more than Coinbase's earnings.
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