NEOPIN Valuation Outlook: a Crypto Piece for the Korean Gaming Giant, Exploring the Optimal Solution for DeFi + CeFi

TL;DR

1. NEOPIN is a “Licensed DeFi Protocol” under the Korean gaming giant Neowiz, offering the advantages of both CeFi and DeFi. NEOPIN is dedicated to bridging the gap between traditional finance and DeFi protocols within a compliant framework.
2. Selected for the Abu Dhabi Investment Office’s Innovation Program and working with local government agencies to develop a regulatory framework for DeFi, NEOPIN is one of the very few DeFi service providers to have received regulatory approval, and has embraced regulation to ensure its long-term growth is not limited.
3. NEOPIN is the only DeFi protocol that supports both the Klaytn and Finschia networks, and is an obvious beneficiary of the Klaytn and Finschia merger, and could become the DeFi paradigm for the “blockchain merger” concept in the future.
4. NEOPIN offers an RWA-based DeFi product, and entering the RWA market with a compliance framework will help it to reap the dividends of the explosive growth of the RWA market.
5. Based on comparable analysis and valuation, we expect the $NPT token price to reach $3.10 to $8.39 USD by the end of the first quarter of 2025, which is a significant upside potential compared to its current token price.
6. Backed by a giant, operating in compliance with DeFi, and benefiting from the historic merger of two major public chains, NEOPIN has a good chance to win more trust from the community in the future wave of blockchain mergers; as a highly inclusive DeFi protocol, NEOPIN’s efforts to bring real-world assets to the chain are also more likely to be recognized by users, and it has a chance to win the loyalty of a large number of web2 and web3 users. As an inclusive DeFi protocol, NEOPIN’s efforts to bring real-world assets onto the chain will be more easily recognized by users, giving it a chance to win the loyalty of a large number of web2 and web3 users.

1. Introduction to NEOPIN

Founded in 2021, NEOPIN describes itself as “a one-stop, non-custodial, license-based protocol for the secure use of cryptocurrencies in a regulatory framework with the benefits of both CeFi and DeFi. Based on a stable security protocol and a regulated environment, NEOPIN aims to bridge the gap between traditional finance and the DeFi protocol for users.”

NEOPIN’s parent company is Neowiz, a leading South Korean gaming company (which publishes Crossfire, the FPS game that took Asia by storm and is distributed globally.) NEOPIN has now been selected for the Innovation Program of the Abu Dhabi Investment Office (ADIO), which operates the Sovereign Wealth Fund of the United Arab Emirates, attracting both direct and indirect investments. NEOPIN is working with the UAE government on the development of the DeFi regulatory framework and is expanding its services based on this framework globally.

NEOPIN’s official website describes its team members as coming from well-known companies in the web2 and web3 space, such as Binance, Samsung, Neowiz and Coupang. As you can see from the website, NEOPIN currently has no less than 30 employees, with the main team members coming from South Korea, which is a notable talent pool within the Web3 startup scene.

2. Business Model and Products

NEOPIN believes that centralized exchanges, represented by CeFi, have generated numerous problems due to unclear customer fund management and ethical issues, resulting in a large number of victims. Similarly, DeFi faces a series of risks, including Oracle risks and protocol flaws, leading to significant disasters. Therefore, NEOPIN proposes the new concept of “licensed DeFi”.

NEOPIN has established a licensed DeFi protocol that strives to provide a stable, secure and compliant platform while maintaining a high level of transparency, innovation and flexibility.

In terms of regulatory compliance, NEOPIN has become the first DeFi protocol to develop and integrate a regulatory framework in partnership with the Abu Dhabi Global Market (ADGM) in the UAE.

In terms of the functionality of the DeFi protocol itself, the NEOPIN ecosystem also connects various crypto-financial services such as P2E, S2E, M2E, NFT, etc., with users and liquidity providers benefiting from the eco-token $NPT.

And with NEOPIN’s product updates, it’s hard not to get our attention with the NEOPIN Wallet, the crucial unmanaged wallet in its ecosystem.

For starters, its not just a simple cryptocurrency wallet, it represents a comprehensive blockchain ecosystem. This is reflected in the fact that it offers users a seamless experience from basic wallet functionality to advanced financial services. Its ecosystem is designed to allow users to explore DeFi, NFT, and other innovative blockchain-based products and services, thus going beyond traditional asset management.

More importantly, the NEOPIN App is designed with a focus on user experience, with an intuitive interface and a clean flow of operations that makes managing crypto assets incredibly easy, even for cryptocurrency newcomers.

NEOPIN’s compliance is also evident in its wallet app, which requires a simple KYC verification process after creating or importing a wallet, and its well-documented KYC verification process simplifies the authentication process for users. With simple steps and clear instructions, users can quickly complete authentication and enjoy a wider range of services and features.

3. Project Highlights

How does NEOPIN differ from other DeFi protocols on the market? Why is NEOPIN likely to create a high level of user loyalty? In our opinion, NEOPIN stands out for at least three reasons:

3.1 NEOPIN is the first DeFi protocol to benefit from the concept of “blockchain convergence”:

To understand this, the following background information is needed:

On February 15th of this year, the Klaytn public chain and the Finschia public chain agreed to merge in order to build Project Dragon, Asia’s largest Web3 ecosystem covering over 250 million Asian wallet users.

Klaytn and Finschia both have very strong backgrounds: Klaytn is a public chain developed by Ground X, a subsidiary of South Korean Internet giant Kakao.

Kakao Talk is Korea’s favorite instant messenger (the Korean equivalent of WeChat); Finschia is a public chain developed by Line Tech Plus, a subsidiary of Japanese Internet giant Line, and Line Messenger is Japan’s favorite instant messenger (the Japanese equivalent of WeChat).

The merger of the public chains of WeChat Korea and WeChat Japan is likely to be a landmark event in the blockchain industry, triggering a wave of “blockchain mergers” in the future.

In the world of Web3, blockchain “forks” are very common, while blockchain “mergers” are extremely rare. Taking the hard fork of BCH and BSV in 2017-2018 as an opportunity, the blockchain industry has set off a “forking frenzy”, and many project owners have forcibly created “community conflicts” and created a large number of fork coins (such as bitcoin gold BTG, bitcoin diamond BCD, etc.). Bitcoin Gold BTG, Bitcoin Diamond BCD, etc.). However, it has been proven that these forked coins have basically gone silent.

In contrast, blockchain “mergers” are rarely proposed or realized. But the obvious truth is that fragmentation will only lead to more and more fragmentation in the blockchain world, with each party operating on its own, and project owners repeatedly building wheels and issuing tokens of various kinds on different public chains, resulting in a fragmentation of the already small web3 world of assets.

The concept of blockchain merger is different: the merger of public chains implies the condensation of the community’s will and the establishment of a higher level of consensus. In addition, from the perspective of the traditional financial industry, “fork” is equivalent to “spin-off” and “merge” is equivalent to “merger and reorganization”, while in the traditional financial industry, “fork” is equivalent to “spin-off” and “merge” is equivalent to “merger and reorganization”. “The latter occurs much more frequently than the former in traditional financial markets. Most spin-offs can only bring temporary hype, while mergers and acquisitions are an important means for enterprises to become bigger and stronger.

Therefore, we firmly believe that the blockchain “forks” that have been occurring in abundance are just an interlude in the development of the web3 world, and that in the long run, blockchain “mergers” represent the future of the web3 world.

So what does this merger have to do with NEOPIN?

—Because NEOPIN is the only DeFi protocol and governance board member that supports both the Klaytn and Finschia networks.

A great deal of prior work has been done by NEOPIN to assist in this historic blockchain merger (e.g. NEOPIN launched the first cross-chain bridge between Klaytn and Finschia, which supports bi-directional cross-chaining between Klaytn and Finschia).

As the only DeFi protocol that supports both Klaytn and Finschia networks, NEOPIN’s every move has been scrutinized by the market, and each new feature it introduces is expected to be an important example of how DeFi protocols are responding to blockchain mergers. Each new feature is expected to be an important example of how the DeFi protocol is responding to the blockchain merger.

If NEOPIN performs well in this merger, then NEOPIN, as the first DeFi protocol, will have the opportunity to play a bigger role in more blockchain mergers in the future.

3.2 NEOPIN proactively embraces regulation, being the first to propose the concept of “licensed DeFi” protocol.

In recent years, with the continuous expansion of the crypto market, regulatory agencies worldwide have intensified their investigations and oversight of projects in the Web3 domain. More and more projects are being brought under regulatory frameworks, indicating a growing trend. However, issues such as lack of transparency, susceptibility to hacking attacks, and compliance risks are significant obstacles limiting the long-term development of DeFi projects.

NEOPIN, as the first protocol to propose “licensed DeFi”, has chosen to embrace regulation, which is a very bold and long term move.

By choosing to work with a regulator early in the project, it has helped build a platform for cryptocurrency use that is both compliant with the regulatory framework and fully utilizes the strengths of DeFi and CeFi, and by partnering with the UAE government to develop the regulatory framework for DeFi and expanding services based on it globally, it has also put itself in a favorable position to compete with others who may have to choose to accept the same regulatory framework, and may not be able to compete with the likes of NEOPIN. The UAE government has also put itself in a competitive position where later entrants may have to choose to accept the same regulatory framework and cannot pose a threat to first movers like NEOPIN.

The KYC validation required before using NEOPIN’s services also prevents illicit funds from flowing into the DeFi protocol and causing unnecessary problems for users.

The birth of Web3 is not intended to create a lawless environment; its ultimate goal is to drive innovation in traditional fields in a different way. For long-term development, DeFi protocols, involving large capital flows and high risks, must inevitably integrate into existing regulatory frameworks. Therefore, for a DeFi project, achieving compliance is essential for laying the foundation for long-term healthy development.

We believe that actively accepting regulation and operating in compliance with the law in the early stages of a project is more conducive to its survival in the face of increasingly stringent regulatory trends in the future. A good reputation can also help attract more new users who are just starting to explore Web3. Attracting a large number of new users who have not yet encountered Web3 is a necessary condition for the growth of the entire industry.

3.3 NEOPIN’s foray into the RWA (Real World Assets) field is facilitated by its compliance framework, which helps pave the way for success.

On March 28th this year, NEOPIN officially announced the launch of its RWA-based DeFi product, entering the RWA market.

The RWA (Real World Assets) market is an important link between the on-chain world and the off-chain world. In recent years, the TVL in the RWA field has grown several times every year, and it is a golden track with high certainty of growth.

Top global organizations such as BCG have predicted that the RWA market will grow into a multi-trillion or even multi-trillion dollar market in the next few years. ONDO Finance, which is also in the RWA business, has seen its governance token $ONDO grow by more than 300% in the past 3 months.

NEOPIN launched NEOPIN BDLP, a multi-yield liquidity mining protocol based on RWA, which allows users to top up DAI, USDT, or USDC, while NEOPIN utilizes sDAI and USDe to provide users with lucrative yields (currently in the range of 13% to 30% annualized).

NEOPIN has even developed a proprietary AI algorithm to help users efficiently invest in complex DeFi derivatives by using their own preferences and on-chain data to determine how to allocate between assets in order to provide each user with an optimal asset management ratio.

In the process, NEOPIN has simplified the investment process by making it easy for users to explore and invest in a variety of DeFi without having to jump through multiple protocols, lowering the barrier to entry for users.

In the future, compliant RWA products will be the link between the web2 world and the web3 world. Only a compliant RWA platform will enable more web3 beginners to access quality real-world assets. Currently, the first movers in the RWA space have the opportunity to build a first mover advantage from both the product and user side and win the competition in the future.

4. Token Economy

4.1 Token Issuance

NEOPIN’s eco-token $NPT has been issued in a total of 1 billion units, with a current circulating supply chain of approximately 86.64 million units, representing a circulation rate of less than 10%. The distribution ratio of $NPT is as follows:

1. Ecosystem (50%): this includes liquidity pools (29.75%), pledge incentives (13.23%), service incentives (7.02%)
2. Partnerships (18%): for new partnerships, development of new services
3. Team Operations (15%): to incentivize project teams and allocate to individuals based on contribution to the ecosystem
4. Reserve pool (10%): to develop the ecosystem outside of the designed allocation
5. Marketing (5%): promote marketing, increase the number of ecosystem participants
6. Investors (2%): allocated to early investors
7. The exact timing of token unlocking will vary depending on the type of allocation.

4.2 Token Utility

1. The NPT Token plays a central role in the NEOPIN ecosystem, connecting various crypto-financial services, including P2E (Play to Earn), S2E (Stake to Earn), M2E (Move to Earn), and NFT (Non-Homogenized Token), through which users and liquidity providers can benefit from NPT.
2. The NPT economy is designed to reward users based on their contributions to the NEOPIN ecosystem. By building a sustainable token economy and distributing the majority of the rewards to users, NEOPIN strives to create a user-centric ecosystem.
3. The specific utilities of $NPT are as follows:
4. Liquidity Provision and Transaction Fee Rewards: Users can contribute to the growth of the NEOPIN ecosystem and the value of NPTs by depositing virtual assets or NPTs into the Liquidity Pool and generating fees for exchange transactions on NEOPIN.
5. Pledge and Lock-in Rewards: NPT offers pledge and lock-in products, with rewards proportional to the amount entrusted to the pledge, designed to be rewarded based on the user’s contribution to the ecosystem.
6. Liquidity Mining: Provides liquidity mining rewards that incentivize liquidity providers based on the interest rate of the liquidity pool and the fees generated by swap transactions.
7. Event and Service Participation Rewards: Users can earn rewards by participating in events promoting NEOPIN services, encouraging active usage within the ecosystem.
8. Automatic Repurchase and Supply Contraction (AutoRM): The NPT economic system adopts an automatic repurchase and supply contraction strategy. Through market repurchases of NPT and profit repurchases, it supports the stability of NPT value and the sustainable development of the ecosystem.
9. Ecosystem Service Support: Supporting various services such as cross-chain swaps, NFT markets, P2E, S2E, etc., encourages user participation through this cyclic structure. By collecting rewards through diversified services, it helps maintain stability within the ecosystem.

Source：Vision Paper

NPT’s token economy is designed to encourage spontaneous user participation and adjust the reward rate based on their contribution to the ecosystem. By stabilizing the NPT cycle and reward mechanism, NEOPIN aims to maintain the stability of the ecosystem and the liquidity pool, and at the same time expand the usage scenarios of NPT to ensure the long-term sustainability of the ecosystem by supporting multi-chain products, expanding the X2E service, and creating the initial liquidity pool, among other measures.

5. Project Valuation

Comparable analysis is a commonly used valuation methodology whereby comparisons are made with similar businesses in the same industry. The underlying assumption is that similar businesses should have similar valuation multiples. When conducting a comparability analysis, it is critical to select companies that are as similar as possible in terms of industry, business model, risk profile and market dynamics.

By ensuring comparability in these areas, the impact of external factors is reduced, allowing us to focus on the intrinsic value drivers of the analyzed businesses. Considering the diversity of NEOPIN’s business and the growth prospects of the public chain headline projects, we performed comparable valuation analyses of NEOPIN with four categories of projects whose primary businesses are DEX, Staking, Bridge and RWA, respectively.

In conducting the comparable valuation analysis of our project, we particularly noticed that there is a more than ten-fold difference between the project’s Fully Diluted Valuation (FDV) and its current Market Cap.

This significant difference may lead to unavoidable bias in the valuation using FDV. Therefore, in our valuation model, we choose to use current market cap rather than FDV for our analysis. Considering the importance of FDV data, we will only predict the price of $NPT tokens at the end of 2024 based on the available data under certain scenarios.

In the end, we will summarize the valuation results of each of NEOPIN’s four businesses - DEX, Staking, Bridge and RWA - and value the entire project according to a proportional weighting of 40%, 30%, 20% and 10%, respectively.

5.1 Comparable Analysis Valuation

5.1.1 DEX

For the DEX program, we selected SushiSwap, Osmosis, and QuickSwap for comparable analysis, and ended up with the following valuation ranges for NEOPIN, combining the three different assumptions:

By analyzing NEOPIN’s valuation on a comparable basis to the DEX project above, we believe that the NPT token price will reach $1.78 to $4.54 USD by the end of 2024.

5.1.2 Staking

For the Staking project, we selected Stride, BENQI and Ankr for comparable analysis, and ended up with the following valuation ranges for NEOPIN, combining the three different assumptions:

By analyzing NEOPIN’s valuation on a comparable basis to the Staking project above, we believe that the NPT token price will reach $3.45 to $5.47 USD by the end of 2024.

5.1.3 Bridge

In the Bridge project, we have selected Synapse, Across, and Connext Network for comparable analysis. Finally, combining three different assumptions, the valuation range for NEOPIN is as follows:

By analyzing NEOPIN’s valuation on a comparable basis to the Bridge project above, we believe that the NPT token price will reach $1.36 to $2.41 USD by the end of 2024.

5.1.4 RWA

In the RWA project, we have selected Synthetix, Ondo Finance, and Ribbon Finance for comparable analysis. Finally, combining three different assumptions, the valuation range for NEOPIN is as follows:

By analyzing NEOPIN’s valuation on a comparable basis to the above RWA projects, we believe that the NPT token price will reach $10.77 to $44.49 USD by the end of 2024.

5.2 Valuation Results

The final valuation results are shown below and valuation details can be found in detail through the valuation model.

The chart shows how DeFi projects are valued based on assumptions about circulating market capitalization and total value locked (TVL). By combining the valuation results of DEX, Stake, Bridge, and RWA with weights of 40%, 30%, 20%, and 10% respectively, we arrived at the final valuation. According to this analysis, by the end of 2024, NEOPIN’s Market Cap is estimated to be between $268 million and $727 million, with the price of NPT ranging from $3.10 to $8.39 USD.

6. Conclusion

1. To summarize, NEOPIN’s main highlights include:
2. The project is backed by South Korean gaming giant Neowiz, with a strong and sizable team, which indicates a strong willingness to actively build.
3. NEOPIN is the first DeFi protocol to benefit from the concept of “blockchain merger”, and if it can play an important role in the merger of Klaytn and Finschia, NEOPIN will have a good chance to gain more trust from the community in the future wave of blockchain mergers.
4. NEOPIN has proactively embraced regulation and was one of the first to propose a “licensed DeFi” protocol. As a highly inclusive DeFi protocol built on a compliance framework, the program is optimistic about long-term growth.
5. As NEOPIN enters the RWA space under a compliance framework, its efforts to bring real-world assets to the chain will be more easily recognized by both web2 and web3 users, and has a good chance of becoming an important bridge between the web2 and web3 worlds.
6. Using comparable analytical valuations, we expect the $NPT token price to reach $3.10 to $8.39 USD by the end of 2024, with significant upside potential compared to its current token price.
7. Therefore, we can fully open our imagination:

As a web3 user using multiple public chains, if you can use the same DeFi protocol to seamlessly transition between multiple public chains in the future wave of blockchain mergers; or as a former web2 user, if you find that you can use the same company’s webpage or APP in the process of purchasing various RWA assets using protocols from the web3 world (and not worrying about legal compliance issues). legal compliance issues). One can only imagine how loyal the user will be to this protocol.

Disclaimer:

1. This article is reprinted from [panewslab], with the original title “NEOPIN VALUATION OUTLOOK: South Korean Gaming Giant’s Crypto Piece Explores DeFi + CeFi’s Optimal Solution”, the copyright belongs to the original author [@yelsanwong, @longyeyouxin ], if you have any objection to the reproduction, please contact Gate Learn team, the team will deal with it as soon as possible according to the relevant process.

2. The views and opinions expressed in this article are solely those of the author and do not constitute any investment advice.

3. Articles in other languages are translated by the Gate Learn team and may not be reproduced, distributed or plagiarized from the translated articles without mentioning Gate.io.