Decred On-Chain: Strongest Hand Market Cap + Ratio

A Tool for Tracking Implied Value Over Shorter Timeframes

DCR STRONG HAND

Previous Work + Takeaways

Decred’s on-chain data is wide-ranging and increasingly well documented. If the reader finds any issues understanding the discussion covering “The Strongest Hand Market Cap + Ratio”, it might be helpful to backtrack and digest other available pieces on relevant subject matter.

However, the abbreviated version of research and conclusions within the “Decred On-Chain” domain includes the following:

(1) Decred On-Chain: A Look at Block Subsidies

Public ledgers are digital entities that leverage block rewards to incentivize / bootstrap growth

Block rewards are fundamental to network valuation

(2) Decred On-Chain: The Ticket Pool VWAP

Cost basis that flows within the proof of stake ticketing system impacts user behavior and ultimately reflects itself in short / long term price action

(3) Decred On-Chain: HODLer Conversion Rates

DCR flows dominated by HODLers, marginal buyers, and marginal sellers reflects itself in short / long term price action

(4) Decred On-Chain: Ticket Funding Rates

User sentiment is reflected in ticket price fluctuations and their corresponding returns

This piece will aim to prove a few simple points:

The largest instances of Decred ticket purchases establish the maximum willingness to hold for network participants, and this threshold can provide users with an on-chain implied valuation for the network. Further — this on-chain implied valuation can at times differ greatly from the market-traded network valuation, leaving room for corrections back to a “fairer price”.

The journey to this conclusion goes as follows:

(1) Valuation Models in Crypto

(2) Decred Ticket Volumes = Demand Surplus

(3) Defining Valuation Using Tickets

(4) Calculating Strongest Hand Market Cap & Ratio

(5) Charts, Explanations & Takeaways

(6) Additional Considerations

(7) Conclusion