The global financial and technology sectors are undergoing a massive shift. More and more companies are investing in cryptocurrencies and blockchain-based services. Surprisingly, public companies are also getting linked to the blockchain ecosystem. This is attracting investors who are particularly interested in the innovation blockchain offers.
One thing is clear: Investing in blockchain-related companies is different from investing in traditional businesses. So increased caution and consideration are required.
Not sure where to begin? We’ve got you covered. Here’s how investors evaluate public companies linked to blockchain:
Classification by Layer
Before you go into finances or operations, determine where the company sits in the “Ledge Landscape.” We’ll explain: The blockchain sector is divided into three layers:
The Infrastructure Layer
Also known as the “Picks and Shovels,” these companies provide the raw power and hardware required for the blockchain to exist. So how can investors evaluate them? Consider the efficiency ratios and compare them with mining costs. For instance, if the energy cost is $50,000 and the Bitcoin is at $95,000, the margin is healthy.
The Platform Layer
These are the Gatekeepers. These public companies provide a bridge between traditional finance and the blockchain. Investors can evaluate them through custodial assets, transaction volumes, and regulatory compliance.
The Application Layer
These are the Value Builders. These public firms implement blockchain for enterprise solutions.
Knowing the role of a public company in the blockchain ecosystem will help you make informed investment decisions.
For instance, the Helius Medical Technologies (HSDT) stock is a great option for investors. The HSDT Stock lists on NASDAQ. Most investors know it as the Solana Company.
Revenue Model Assessment
Most blockchain companies earn revenue through two means:
- On-chain revenue. This consists of transaction fees, staking commissions, and protocol fees
- Off-chain revenue. This includes enterprise subscriptions, API licensing, and consulting services.
Many early-stage blockchain public companies have negligible off-chain revenue, which isn’t always a good sign. Therefore, carefully assess a company’s preferred revenue model before making a decision.
User Adoption and Network Metrics
While there is no one-size-fits-all approach to evaluating blockchain companies, there are some on-chain metrics investors must consider. This includes:
- Monthly Active Wallets (MAW) – represent the adoption rate of a decentralized network.
- Daily Active Users (DAU) – indicates engagement rates.
- Transaction volume and frequency
- Validator participation rate – shows community confidence and trust.
- GitHub activity – shows active contributors.
Asset Valuation
When investors evaluate large digital asset companies, they use two primary metrics:
Market-to-Net-Asset-Value (mNAV) – It compares the market cap to the market value of held crypto reserves. Generally speaking, a ratio below 1.0 might indicate the market is discounting the treasury due to risk.
Satoshi Per Share – It involves calculating how much Bitcoin or other crypto is held per outstanding share.
Risks and Red Flags
Lastly, investors assess potential risks and red flags. Some examples include:
- Vague ownership structure
- Use of excessive technical words in white papers and documentation
- Rapid, cross-border transactions
- Sudden changes in protocols and management processes
Mudsr 
Mariah