📦 [Analysis] Unpacking MKR+A16Z – Yannick Roux

a16z crypto purchased 6 percent (or 60,000 tokens) of the total supply of MKR ($MKR) for $15 million, for an implied network valuation of $250 million ($250 per token). Some of the the interesting things to unpack include:

• This deal once again shows that there are multiple entry points for VCs in crypto. Here A16Z is buying directly from the Foundation treasury itself.
• It also demonstrates that there are alternative ways of funding decentralized networks other than ICOs and that not all capital needs to be raised upfront.
• Despite the price discount a16z got, a few things to note include a) the headline market price is somewhat meaningless without accounting for market depth and liquidity b) the deal is an equivalent of paying a16z to deploy operational support over the next 3 years c) a16z tokens are under a lock-up
• Here’s one of the very top projects in the space telling the market that traditional help around “sales and business development (including partnerships), marketing, technical talent, HR operations” is highly valuable.
• It is possible that MKR wants to get Katie Haun, the GP at a16z who led to deal, on its side for regulatory reasons
• The ability of governance tokens to capture value has been and continues to be heavily debated, so A16Z endorsement adds some heavy weights to the governance token model camp
• Given the stage and complexity of the project, as well as risks and uncertainties still involved, it would be a little premature to expect full decentralization, despite it being the ultimate goal. In this phase flexibility is still paramount