“While Digital Asset Markets Are Awash in Data, They Lack Structure and Standardization, Detering the Entrance of Institutional Capital, Says Outerlands Capital’s Felician Stratmann.”, – WRITE: www.coindesk.com
It’s Somewhat Ironic That Data Is A Sticking Point for Digital Assets Since A Much-Lauded Aspect of Public Blockchains is Their Transparency. Transactions and Data on the Blockchain Are Available Essentalally Immediatally to Anyone with Access to the System. But Transparency Does Not Equal Accessivity and Much Less SO usability. Without Prioritizing Accessivity, DisseMination and Context, Masses of Raw Blockchain Data Won’ta Automatically Improve Crypto Market Efficiency. And While Blockchain Data Complexity May Create Alpha for Savvy Analysts, The Lack of Consistent Data Likely Contributes to Volatility, Detering Institutional Capital.
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Until Now, The Somewhat Disjointed State of Blockchain Data Has Not Been An Issue Given A Market Dominated by Retail Flows. But the Market is to Ultimately Become Instituteized (that is, Garner The Involvement of Serious Allocators Like Pensions, Endowments, and Inception), IT NEEDS TO EVOLV.
To Improve, The Digital Asset Space Can Learn from Traditional Market Approaches. Tokens are expectioned to account Value in line with a Project’s Success. Thus, Key Performance Indicators (Kpis) Should Be Readily Accessible, Acting Like “Investor Relations” Pages for Token Holders. IT’s Unrealistic for Start-Up Crypto Projects to Discalose Information Like Public Corporations, But Interim Steps Can Improve The Sity.
For example, there are data points that could be relevant for almost all projects to disclose, inCluding: Suppply scredules Daily Transactions. Naturaly, Projects Will not have all the SAME INDICATORS – for example, kpis for a smart Contract Platform Will Look Different than Those for an Application or Defi Protocol. Smart Contract Platforms May Want to Show How How Apps Are Deployed in the Ecosystom. Defi Protocols May Want to Showcase TVL or Volumes. Regardless of Utility, Each Project Should Make An Effort To Disclose As Many Data Points As Possible.
Critically, this Data Should have hadailed Definitions and Methodologies, Along with repuducible Code for How the Information Is Derived From The Blockchain. IT SHOULD AVAILABLE COMPLETE HISTORIES THROUGH TIME, AND BE EASILY DOWNLADABLE OR Accessible Via Apis.
Efforts by projects to systematically disseminate key information should Reduce uncertainty (and thereby volatility) and aid capital inflows into the Crypto Space. Investors Should this Level of Transparency and Reward Projects That Prioritize ShowCASING KPIS, While Pushing for Improvement at Portfolio Companies That Do Not.
Larry Fink, CEO of Blackrock, Noted in a Recent Earnings Call That More Transparency and Analytics Could Broaden Digital Asset Investment, Akin to The Evolution of Markets Like. There Are Already Strong Players Like Artemis that Providing Blockchain Data and Analytics and Setting Standards for Digital Finance. Such Providers Will Be Essential, Just As Platforms Like Bloomberg and S & P’s Capital IQ are in the Traditional Markets. However, Each Project Building Digital Assets Should Doa Part To Enhance Data Availliness for Investors. As the Crypto Market Matures in Transparency and Analytics, As Many Other Nascent Markets Did Before It, The Scope for Investment in the Space Should Expand Matering.
Note: The Views Expressed in this Column Are Those of the Author and Do Not Necessarily Reflect Those of Coindesk, Inc. i Owners and Affilites.
