Asymmetry Finance: A Community Member Review
Community Member Review: Discover why Asymmetry Finance is a no brainer according to one of our community members!
What Is Asymmetry Finance?
Asymmetry finance (ASF) is a staking & synthetic dollar protocol — pioneering solutions that achieve the highest sustainable yield in their respective markets. Simply put ASF is a DeFi protocol that uses staked assets to generate more yield by reusing the staked assets as either collateral and/or to facilitate lending.
Thus, compounding or multiplying the earnings potential of otherwise unused/unutilised assets. Think of it as the process of owning a rental, then using the property as collateral to borrow money to invest in another asset like a treasury bond, multiplying the yield.
What Is the Opportunity?
Ethereum (Eth) has a market capitalisation (mcap) of c. $430bn and is producing a native yield of c. 5% (c. 4% natively, and c. 5.7% with MEV Boost)[1]. And thus, the asset produces an annual real yield/APR of just staking Eth of c. $21.5bn.
Restaking tends to add a multiplier to native yield through rehypothecation i.e. the staked Eth can be used as collateral for lending, other DeFi use cases, and economic security across other chains (as we’re seeing with Eigen Layer). Simply put, when Eth is staked, it can be made more productive, meaning it can earn more money on top of the yield from just staking it. And so, let’s assume the additional yield is another 5%.
This means in total the Eth staking/restaking opportunity has a potential annual real yield of c. 10% or $43bn. Think of it this way, based on today’s Eth price of c. $3,600 and market cap of c. $430bn, there’s potentially $43bn of economic value to be extracted from the asset. This return is c. 2x higher than the yield on traditional finance (TradFi) comparable ‘safe’ products like money market funds, which are currently achieving a c. 4% — 5.3% yield[2].
Typically, Wall Street and TradFi value a company/market opportunity based on future cash flows/yield/returns, so let’s say we price the Eth staking/restaking or LSTfi (Liquid Staked Token Finance) / LRTfi (Liquid Restaking Token Finance) — as the term is often abbreviated — opportunity at a c. 10x price/earnings ratio. This basically means, the perceived true actual value/market cap of the company/asset/market today is 10x its current earnings.
That means as a conservative minimum the mcap of the Eth staking/restaking opportunity is c. $430bn.
Let’s say Eigen Layer is the dominantly player and will take c. 50% of the market share, as much of restaking, as we know it today, is built on top of or utilises the Eigen Layer protocol, and thus a c. $215bn Fully Diluted Value (FDV) mcap; that means there’s c. $215bn of potential mcap to compete for in the Eth LRTfi/LSTfi space among the other derivative protocols.
Think of it this way, that means there’s enough room here for 10 projects/protocols to reach a c. $20bn FDV mcap, or 20 @ c. $10b FDV mcap or c. 40 @ c. $5bn FDV mcap.
Basically, this space is ripe to produce billion-dollar valuation protocols i.e. up to 40 $5bn winners.
Right now, most LSTfi/LRTfi protocols are launching at c. $50m — $60m FDV mcap (as seen with ASF). So just doing some basic maths, there could be an abundance of potential 100x opportunities in this category.
So far there’s less than 10 notable LRTfi/LSTfi protocols in the market.
What Could This Opportunity Look Like in A BULL Market?
What if Eth goes to $10k, or $20k? What could the value of the LRTfi/LSTfi space be when the onchain ecosystem is natively producing $100bn a year of revenue? Now that’s food for thought!
And to complete the analysis of why we think ASF could achieve a sizable mcap. If we look at Ethena, a similar restaking/synthetic asset/dollar protocol and a competitor to ASF, they peaked at $20bn FDV mcap, and are now at a c. $12bn FDV mcap. ASF can arguably compete on the same level. However, if ASF just achieved half the current FDV mcap of Ethena i.e. a $6bn FDV mcap, that is already a 100x.
And Why Do I Believe This Team Can Execute, and Deliver on the Opportunity?
Justin Garland — Co-Founder
Previously Head of Product & Engineering at Silo Finance & ShapeShift. CompSci Degree.
Hannah JoJo — Co-Founder
Former Senior DeFi Specialist at Genesis Global Trading, Chief Strategist & Tokenomics Lead at Steer Finance. Actuarial & Mathematics Degree.
The two co-founders are absolute giga-brains in the DeFi space. They know how to deliver! Justin has had a pivotal leadership position at a very influential $billion dollar crypto company already, and so has Hannah. Thus, the founders have proven that they already know how to execute at the highest level and create billions in value for ecosystem participants. They have helped projects/businesses achieve the type of FDV mcap that ASF is targeting. They’ve done this countless times already, and we’re banking on them delivering again with ASF.
And did I mention that they are backed by some of the best VCs in the space?
Disclaimer: Nothing written here should be construed as financial advice, it’s merely the opinion of the author.
🌟 There you have it! Don’t just take our word for it — trust our community members. Join the launch of Asymmetry Finance and be part of this exciting journey!
