Arthur Hayes, the founder of BitMEX, recently shared his insights on choosing promising crypto protocols. He’s looking for specific characteristics that he believes indicate strong investment potential.
Two Key Features Hayes Looks For
Hayes focuses on two main things when evaluating crypto protocols:
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Real User Spending: He wants to see evidence that users are actively spending their own money (stablecoins or other crypto) to use the protocol’s services, not just relying on token emissions. He uses Hyperliquid (HYPE) as a positive example, highlighting its user growth and trading volume.
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Token Holder Rewards: Hayes emphasizes the importance of clear mechanisms for rewarding token holders. He wants to understand how the protocol generates returns for investors, whether through buybacks, emissions, or other methods. He stresses the need for a clear return on investment (ROI) that allows for financial analysis.
A Critical Look at Uniswap
Hayes criticizes Uniswap (UNI), calling it a well-designed protocol but one that fails to offer any direct rewards to its token holders. This lack of incentive is a key factor in his assessment.