The future of finance? Multicoin explains why it continuously invests in Dune

On August 12, 2021, Dune Analytics, an encrypted data analysis platform, announced the completion of US$8 million in Series A financing, led by Union Square Ventures, with participation from Redpoint Ventures, Multicoin Capital, Dragonfly and others.

Among them, Multicoin Capital invested in Dune Analytics in the seed round. On the same day, Multicoin Capital also issued an article explaining in detail why it continues to be optimistic about Dune. The detailed text is as follows:

People rarely have the opportunity to invest in the things they use every day.

Dune’s power

Dune is an all-in-one product for querying, visualizing, sharing and exploring smart contract data from public blockchains. They decoded the Ethereum smart contract data so that they can use simple SQL queries to powerfully visualize real-time data. Users can visualize query results in dynamic charts that are updated in real time, and create a comprehensive dashboard that displays KPIs of any encryption protocol. All charts are configurable, modular, and can be embedded in third-party services on the network.

Hedge funds, venture capitalists, developers, researchers, protocol teams and CeFi companies, everyone in the crypto community can use Dune to create and share usage charts and dashboards (mainly used in DeFi and NFT smart contract systems). People now publish more than 40,000 analyses on Dune, anyone can view, remix and fork (remix and fork will be discussed in detail below).

We read every day third-party research generated by sell-side analysts, news organizations, developers, venture funds, and other market participants. If it is about DeFi or NFT research that includes charts, then the probability that the data source is Dune or Dune charts directly embedded in it is more than 50%. This product is very popular in the encryption field.

It is so widely used that it is now becoming part of the open source collaboration structure. It is also the gold standard data tool for AAVE financial reporting (treasury reporting). This is a good example provided by the Llama team, which created a Dune dashboard to monitor Aave’s financial activities:

LMyQmkXZY8WO9Z4n4RXO87gaTqBJqJDffKUb2D7I.pngSource:  Aave Financial Analysis by Llama-Dune Analytics

Since the initial investment in Dune in September 2020, the Dune team has been rapidly launching new products. In the past 12 months, they have launched:

Address Labels — For example, address A might be labeled as “large DEX trader, Compound core development team, and Uniswap whale”

Project Dashboards-a list of dashboards for some specific projects

Some chain integrations (Chain Integrations) — xDai, Polygon and Optimism are now online

Dune V2-Completely upgraded the query editor and execution engine, providing a higher performance and usable version. This ensures 1) reliable query execution and scalable settings (previous applications simply couldn’t handle demand), 2) a unified beautiful UI throughout the Dune experience, and 3) improved settings/stacks for rapid iteration.

In addition, the company has grown from only 2 co-founders to a team of 15 people, and they are still actively recruiting.

Mixable and combinable analysis

The traditional financial market data provider industry is a mature industry, with revenue of 33 billion U.S. dollars in 2019. Therefore, a large number of teams are eager to build data platforms for various fields of the crypto market. These teams include but are not limited to: 1) the compliance team of the CeFi exchange, 2) institutional investors, 3) retail investors, and 4) developers.

Many major encrypted data providers have one thing in common: they are closed platforms. That is, they generate pre-configured indicators and data packages, and then sell them to investors. In doing so, they secretly tell investors and researchers which indicators are the most important. This data is usually hidden behind extremely expensive paywalls and is reserved for more sophisticated market participants who have large amounts of funds and can afford to pay.

Dune takes the opposite approach: it is a user-driven community. The magic of Dune is that its product itself abstracts all the underlying technical complexity, making it trivial for anyone (even those who are just beginning to learn SQL) to configure complex visualizations. It also enables other users to build on these visualizations and remix them. The Dune team will not tell investors or developers which indicators they should care about. Instead, they provide these researchers with the tools needed to build the visualizations and queries they need.

Dune benefits from self-reinforcing network effects based on community participation: 1) community creates queries; 2) has a rich query library; 3) makes the community bigger by sharing embedded images; 4) new users discover Dune .

6iO64Ff0XFaPVxvvWhWGfgdG4xB8avBHfBUDVaFm.png

The future of financial reporting and market-driven research

We believe that one of the most powerful applications of encryption is DeFi. The foundation of all finance is liquidity and trading. By providing non-custodial, permission-free and censorship-resistant financial contracts for billions of people on the blockchain, DeFi can provide financial solutions that significantly improve global financial inclusion, while reducing management costs and expenses for existing market participants. This is the prospect behind our big theme of open finance.

Gary Gensler, chairman of the US Securities and Exchange Commission, recently gave a speech in which he discussed investor protection and transparency and how it applies to encryption and DeFi. One of the basic pillars of becoming a listed company is to provide transparency about the nature of the business and its finances. The costs associated with this transparency and reporting are onerous (which is why companies remain private for longer). The US Securities and Exchange Commission estimates that listed companies spend an average of US$1.5 million on compliance costs each year.

In addition, the transparency of financial markets is usually once every 90 days, with a lag of 2-3 weeks. The entire industry has sell-side analysts from different organizations who adjust very detailed financial models to better predict future earnings. These models support their buy and sell recommendations, which in turn affect investors’ positions in capital allocation.

Big money therefore turned to alternative data sources to gain a deeper understanding of the company within 90 days. This covers satellite data of parking lots, in-store visits/channel checks, network traffic, credit card data, etc. Only those who can find it and can afford it can access this information. Many things may happen in the 90-day period, both good and bad, but during this time, the understanding of the company is limited.

What if analysts do not have to wait three months but can follow up to understand the company’s performance in real time? Analysts do not need to find alternative data sources to access management dashboards that track revenue, users, and other KPIs for free and in real time.

Let’s take MakerDAO as an example. MakerDAO is a decentralized credit tool built on Ethereum, which enables users to: 1) use crypto assets as collateral to obtain loans without trust, 2) immediately increase leverage to their investment portfolio, and 3) produce one A stable crypto asset named Dai. With Dune, anyone with an Internet connection can track MakerDAO’s user activities, income, outstanding loans, facility balance sheets, Dai usage, and the system’s global mortgage rate 24/7 in real time. This is the future.

PWzuehUB3Iei472HlgeXF2kyHz54aqUTWPoDeNW6.png

Source: @SebVentures/MakerDAO-Dune Analysis Dashboard

The road to the future

As the first edition of Dune wrote, “The revolution will not happen every quarter.” Open finance and blockchain technology will undoubtedly have a lasting impact on the way financial reporting. Once users and analysts experience real-time financial statements 24/7, they will never look back.

Dune is the only company that encrypts native data. They build everything in an open, composable, accessible, social and community-centric way. They are the main data visualization tools for DeFi and NFT analysis, and they are rapidly adopting new chains and building more powerful analysis products, and have achieved a huge lead in the market.

We believe that the future of finance will be driven by transparent, real-time research, and Dune is leading this movement.

Original link: The Future of Finance is Real-Time Reporting

Disclaimer: Golden Finance is a blockchain information platform, and the content of articles published is for information reference only, not as actual investment advice. Please establish a correct investment philosophy and be sure to increase risk awareness.

 

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