Econteric started because the quality of research out there can do better with better analytics tools. We want to turn tacit information into measurable data because we know how painful it is to not understand what’s really going on in the space. We want to help investors to make more grounded decisions based on facts, and, valuable projects to grow more easily by spreading useful data about their protocol to incencivize growth and good governance.
The esoteric nature of the DeFi space is both fascinating and confusing. Using fundamental economic analysis, we bridge the knowledge gap between capital market and DeFi market.
Econteric is a platform that demystify the complex market of DeFi. We focus on the economic mechanisms and incentives in the primary market (inside the protocol), with analytics from the secondary market to support empirical analysis.
If mechanical physics is the rules that we all play by on earth (e.g. gravity and air resistance), economic mechanisms are the rules we all play by in a token-based ecosystem.
Using the economic mechanisms as rules, we measure
- How robust the primary market design is
- The intrinsic value accrual in a token-based economy
Check out the research book for how we make sense of the economics mechanisms.
Traditional finance has great research. Using business operations and processes, it generates value that accrues to the investors. There, we also analyse and measure the value flow inside the ecosystem.
In token-based ecosystems, we have these operations and processes in code or as incentive mechanisms. Thus, we can measure robustness and value accrual from the primary market and understand how the system works. Will be provided here some meaningful, easy to interpret data instead of simple balance sheet that is published by the company. All the transactions and mechanisms are publicly available and codified in smart contracts.
The main difference is a better way of measuring and quantifying the robustness of primary market design. The data we provide is not easily accessible to investors, but this is what leads to secondary market price activities.
TLDR: better governance. Resilient ecosystems. Win-win for investors/protocols.
Distribution is just the tip of the iceberg, towards creating a more equitable future. The challenge is to coordinate between the distributed agents and work together to govern this economy.
With measurable insights towards the inputs, mechanisms, design and outcome of the economics design, we can better governance a system and coordinate towards certain decisions. This is to build more resilient ecosystems, taking into account both quantitative and qualitative design.
Whilst the idea of low barrier to entry is propagated, the reality is that this space requires a good understanding of economics, finance, technology, math and business operations.
The space is also evolving quickly and it can get very confusing. As time pass within the crypto ecosystem, more project grows, more concepts to understand, we have more data to analyze. It quickly becomes overwhelming, and leads to disinformation and bad decisions. For projects, and investors. We want to make it easy for people to make sense of the space and to enter the DeFi market with educated research, not speculative biased information.
Using the economics design framework created by Lisa JY Tan, we are able to creat a general standardised framework to analyse the various DeFi protocols.
Each pillar and variable is further customised towards the segment in finance. We deconstruct the economics design of these token and incentive mechanisms to measure its robustness. Since markets are social-based, we also provide analysis to the social sentiments which help understanding the traction that a new project is attracting.
Lastly, we analyse the financial trends and metrics. But this is not key, because without the economics mechanisms understood, the narrative of the financial analysis can be misleading.
Crypto includes all types of tokens in the space — like layer 1, layer 2 and NFTs. We are focused on only DeFi tokens.
Layer 1 is the settlement layer like Bitcoin, Ethereum, Polkadot.
Layer 2 is the scaling layer like Polygon, Optimism.
NFTs are like social tokens, art tokens, creator tokens.