👀 The most undervalued crypto

GM everyone. This is 2036.

What do all the world’s top crypto VC funds have in common?

They tend to invest in tokens of crypto projects that generate cash flow.

Most of them aren't fans of memecoins - which have no utility, road map, or revenues.

Instead, they like MRR (monthly recurring revenue), ARR (annual recurring revenue), 24-hour fees, multiples of future expected revenue, etc.

In the words of crypto VC Chris Dixon, these are ‘productive blockchain-based innovations that truly make a difference,’ i.e., businesses.

And like all businesses, they need dinero 💸

Investors judge their potential based on their expected future revenue.

You can see this focus on earnings in how these VC funds raise money. Here is an actual screenshot of my email inbox from a crypto angel fund:

It’s all about Millions of $ of revenue.

In fact, the more future cash flows they can buy today, the better.

Now - in all transparency, I’m not always a fan of buying cash-flow-generating tokens.

That’s because of how they fundraise: venture capitalists invest in early-stage tokens before launch - with a lock-up period of 2 to 3 years.

This means that after the token is live and trading on the market, VCs will dump their tokens on a regular basis for years, creating enormous selling pressure.

This is good for VCs, but bad if you buy tokens on the open market like most people.

Memecoins are the opposite. The entire coin supply is distributed at launch, and any early developers sell their tokens for the token to get credibility. You know there are no early-stage investors dumping on you for the next three years.

That said, however, some of these cash-flowing tokens are hard to ignore because they actually have really awesome businesses.

One of these is Maker ($MKR).

Maker is the creator of the stablecoin DAI— and if there's one thing crypto got right, it's stablecoins.

Today, stablecoins are crypto’s biggest use case:

They represent 55% of all on-chain activity and handle more than $3 TRILLION in monthly volume (nearly 3 times as much as Visa)

Bear markets don't seem to phase them either:

Maker makes a lot of money from its stablecoin being used in DeFi on Ethereum: ∼$400 million per year.

Not a shabby business.

Despite this, the token is trading at just 2X estimated 2025 earnings.

For all intents and purposes, that’s cheap.

Of course, it could be cheap for a reason.

But if you’re like crypto OG Dan Morehead at Pantera Capital or Arthur Hayes— and you love buying businesses that generate cash flow - it would make sense to put Maker on your radar.

With the current plunge in crypto prices, $MKR is down -21% in the last 30 days.

Looking better by the day.

If you’re interested, here’s a great full thesis on Maker.

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DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.