Fact Sheet - Liquid Meta Capital Holdings Ltd. (LIQD:NEO,$0.35|N/R) Discount to NAV and Blue-Sky Upside
We believe that Liquid Meta is trading at a heavily discounted valuation relative to its cryptocurrency holdings and earnings potential. LIQD has a net asset value of $0.50/share and we expect this to generate US$2.6M in EBITDA next year from liquidity mining and staking. This equates to 5.5x EBITDA, which is a discount to traditional financial service firms that trade at 8.0x.
Liquid Meta aims to bridge the gap between decentralized finance (DeFi) and traditional finance (TradFi) markets, by loaning and staking its capital on a diversified set of decentralized exchanges (DEXs). For providing liquidity, Liquid Meta receives a pro-rata share of transaction fees collected on the DEX and token rewards. The aggregate fees and rewards collected is the “yield” LIQD receives for being a liquidity provider. The Company receives these rewards from decentralized lending/borrowing platforms and by contributing staked capital to more mature layer 1 blockchains. The Company is also currently developing proprietary technologies including the Meta Bridge, which would allow it to deploy outside capital to yield strategies and generate fee income.
LIQD currently has US$20M+ in staked assets, which equates to $0.50/share (30% discount). While volatile on a monthly basis, we are estimating that these assets can generate 20-25% APYs in transaction fees and token rewards via providing liquidity to various DEX’s and liquidity pools (LPs). LIQD does this through a diversified base of 8 different blockchains, 15 dapps, and 20 LPs. The largest portion is in stable pairings, which we estimate can yield 10-15% annually. The team runs very lean; we are estimating it only costs US$3M annually to run the business. The business has tremendous operating leverage given that it can reinvest compounded returns and newly raised capital without ramping expenses.
Liquid Meta’s core team includes two highly experienced engineers, both of which focus on developing high-throughput trading applications and DeFi ecosystems. LIQD’s CTO (Daniel Opperman) has 25+ years of experience developing low-latency & high-throughput systems, specifically for start-up and early-stage companies. The Company’s Senior Engineer (Carlos Camogli) also has 15+ years in electronic security development and risk management. As of now, the Company uses unique trading strategies and security infrastructure to manage its investments in DeFi protocols. LIQD is also currently developing proprietary software and strategies that can boost profitability and reduce risk across the portfolio.