Investor Relations in the Onchain Era

Michael Ippolito, co-founder of Blockworks, discusses the launch of Blockworks Investor Relations (IR) and the evolving expectations of investors in the crypto market. With increasing institutional capital entering the space, there is a growing demand for transparency, standardization, and professionalism in investor relations. Ippolito emphasizes that crypto investor relations should be more transparent and data-driven, addressing the challenge of crafting a credible narrative from real-time business data.

Blockworks IR aims to tackle these challenges by offering curated analytics, branded investor portals, and advisory support. The platform has attracted clients like BNB and Jito. Ippolito notes positive developments in the crypto market, such as stablecoins and institutional interest, but points out a disconnect between overall market growth and token performance. While the total crypto market cap appears strong, the altcoin market cap has shown less favorable trends, with the average market cap of tokens decreasing by about 50% since 2021.

The discussion reveals that the average price of tokens has dropped by approximately 80%, and while Bitcoin remains relatively strong, the overall market cap and average prices have declined since 2022. Ippolito highlights a historical correlation between on-chain revenue and token prices that has broken down, leading to a disconnect where strong revenue generation does not translate to increased token prices. Trust issues are prevalent in the market, stemming from fragmented liquidity and a lack of access to complete and reliable data about protocols. The absence of standardized reporting contributes to mistrust, as investors often lack the context needed to interpret data effectively.

To address these trust issues, Blockworks IR proposes enhancing data accessibility, providing services like quarterly reports and earnings calls, and offering a comprehensive IR platform for managing investor relations workflows. The platform aims to present information effectively to investors, featuring a front-facing website similar to public company investor relations pages and engagement analytics to help protocols understand investor behavior. Blockworks plans to introduce an agent service to provide insights and data management at a lower cost than traditional IR services, striving to improve market transparency and data quality in the crypto space.

The conversation highlights significant challenges faced by public companies, noting that the number of such companies in the U.S. has halved over the past two decades, while the costs associated with being public have quadrupled. The discussion introduces the potential of crypto and on-chain solutions to enhance public market structures rather than merely replicate them. Current investor relations practices are criticized for being outdated, with unengaging presentations and basic data. On-chain data offers a solution, providing 90% of a company's operating and financial history transparently, effectively communicating a company's narrative to investors.

Vlad Tenev emphasizes that if the presenter is bored, the audience will be too, pointing out that traditional investor relations often lack engagement. The vision for the future of investor relations includes a shift towards proactive and engaging experiences, aiming to increase the number of investors and token holders through real-time data, live events, and social media. Predictions suggest a move towards more dynamic interactions, drawing inspiration from successful models in other industries. The transformative potential of crypto is underscored, as it has already altered market operations, creating a 24/7 environment and challenging traditional finance practices. The speaker expresses optimism for the future of the crypto industry, highlighting its resilience and innovative vision.