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What is IPO-NFT?

Deeper's IPO-NFT is the first equity subscription NFT in human history, which has a very high collection value. Each IPO-NFT directly corresponds to Deeper’s stock subscription rights of $2,000 before listing, so it also has direct economic value that other NFT products do not have. This unique design has attracted much attention once the IPO-NFT is launched. It breaks the barriers between equity and currency rights, and provides endless imagination for the blockchain economy to break the circle.

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Today, when data privacy is becoming more and more important, network security has naturally become an important part of privacy protection. When it comes to network security, we naturally think of network hardware protection, which is why firewall devices have become more and more popular in recent years. , especially enterprise gateway equipment, has basically become a must-have product for medium and large enterprises.

In terms of scale, the global network security market will reach more than 120 billion US dollars in 2019. With the advent of the 5G era, massive data will lead to an exponential growth in the scale of data storage and data transmission equipment and the network security market. According to the research and analysis of Founder Research Institute, by 2024, the global network security market will reach about 400 billion US dollars, and the future direction of network security will be cloud security, network security SaaS, equipment integration, and miniaturization.

With the promotion of 5G technology, independent networking has become the mainstream, and independent networking has higher requirements for the miniaturization and integration of security equipment. Data security and network security will also become mainstream demands, which is why the independent security device (VPN, Virtual Private Network) market is so hot this year.

When it comes to projects with network security protection and blockchain spirit, we have to mention Deeper Network, which has been popular overseas recently, as the "decentralized network infrastructure" of Polkadot ecology and even the Web3.0 world. Deeper has attracted much attention since its birth.

Deeper's vision is to provide the infrastructure of a decentralized communication network, and also provide an entrance to Web3.0. Let users use Deeper's device portal to easily use Dapps in the Web3.0 era, and bring more Web2.0 users into the Web3.0 ecosystem.

The development team behind Deeper is a star team in Silicon Valley. Its founding team is also well-known in the field of network security. Coupled with the addition of outstanding talents in the blockchain industry and the participation of executives from some traditional companies, the Deeper team has most of the areas. A "luxury lineup" that blockchain companies have never had.

While Deeper products continue to be iteratively updated, they have passed the high-risk stage of the start-up period and successfully completed the Pre-A equity financing. They are currently conducting the A-round equity financing, which is also rare in the encryption circle. After all, most of the projects are aimed at token exchanges, but Deeper is also favored in the traditional capital market because of its excellent hardware products and unique rigid-demand characteristics in terms of network transmission and network security.

Therefore, in order to balance the relationship between early equity investors and Token investors, and to allow the two to communicate with each other, the Deeper team officially launched the equity subscription agreement "IPO-NFT" after deliberating for a long time and combining the needs of traditional investors. This is unprecedented in the industry, so it has received a lot of attention once it was launched.

However, after combining the observation of fundamental news, we found that most people still do not understand what IPO-NFT is and what value lies behind it.

We all know that the IPO price of a company is often underestimated when it is listed (there are often many reasons for this underestimation, one is the objectivity of supervision, and the other is market demand, because the IPO price is lower than the normal market price, it will be underestimated. Arouse the enthusiasm of the market, a good increase is more likely to cause a positive reaction in the market than a trend that breaks after listing), taking US stocks as an example, the closing price of most companies on the day of listing is generally higher than the IPO price by about 60%-100% above. Therefore, we optimistically infer that Deeper's IPO-NFT model may become a new innovative model for blockchain companies in the capital market, bringing a bold innovation to blockchain companies.

Why I'm Bullish on Deeper's IPO-NFT

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1. The rigidity of the Deeper project

After years of development, the network we live in has evolved from the earliest read-only network Web1.0 (that is, we can only read the content provided to us by the network, such as search engines), to interactive network Web2.0 (users can Upload your own content and interact with others, such as Weibo), and develop into the Web3.0 that is currently being explored. Web3.0 is a new generation of network, which is characterized by decentralization, and everyone can control their own (digital) identity, assets and data. Therefore, blockchain will be an important infrastructure of Web3.0.

As we know, the basic communication protocol of the traditional centralized network is TCP/IP, and then a large number of Internet applications have been developed on the basis of TCP/IP, thus creating the current prosperous centralized Internet ecology. But for the Web3.0 next-generation Internet, if all its applications are still based on centralized communication protocols and infrastructure controlled by operators and Internet giants, then it is like building a skyscraper on the beach. Its foundations are evidently weak.

The decentralized private network DPN of Deeper Network can prevent the data from being stuck by the centralized subject during the transmission process. It is the next generation of TCP/IP in the Web3.0 ecology, and its just-needed status is beyond doubt. Based on the decentralized communication infrastructure of DPN, developers can easily re-implement existing traditional Internet applications in the DPN network, such as decentralized video sharing platforms, decentralized social media, and decentralized communication software, etc. Only when the foundation of decentralized communication infrastructure is solid, can the skyscrapers of Web3.0 be built steadily and tall.

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2. The product has strong competitiveness

The difference between Deeper Network and 99% of blockchain projects is that they have their own star product Deeper Connect. On Indiegogo, the largest overseas crowdfunding platform for black technology products, Deeper released a new generation of product Deeper Connect Mini, and its sales performance has successfully entered the top 100 in Indiegogo history (a total of more than one million projects have been released on this platform in history), Deeper Connect is also the only blockchain project among the top 100 projects.

Moreover, traditional platforms like Indiegogo are not allowed to use functions related to mining revenue as a selling point. The success of Deeper Connect on Indiegogo all comes from its practical functions and powerful performance. Let me ask, if other mining machine products on the market now have the value of Token generated by mining them to zero, will anyone still buy them with money or even a lot of money?

Therefore, Deeper's products not only have their own unique value in the Web3.0 ecosystem, but also have a strong ability to break the circle. Relying on its powerful functions and performance, it can attract a large number of traditional Web2.0 users, and then Drain these Web2.0 users to Web3.0 seamlessly.

So how can Deeper Connect, as a Web3.0 product, attract traditional Web2.0 users?

This is also a question that the Deeper team has been thinking about, and finally they found the answer. The Deeper team believes that 99% of Web2.0 users in the world still know nothing about Web3.0, but all traditional Internet users have the same pursuit of security, privacy and fairness.

The Deeper team combines network security technology, network sharing technology and blockchain technology, and firstly greatly enhances the user's Web2.0 access experience. After the user truly feels the powerful decentralized technology of Deeper Connect, Deeper Connect opens the door to Web3.0 for users, allowing them to step further into a brand new world.

Deeper Connect uses the following core technologies to enhance user experience:

(1) AtomOS network security operating system. AtomOS is the world's first lock-free multi-core network operating system. It can achieve network security functions and performance that can only be achieved by enterprise-level hardware on civilian processors. With AtomOS, all devices in the user’s family will receive the most comprehensive protection all the time, and at the same time, all kinds of flies and mosquitoes on the Internet such as phishing, third-party cookies, malicious URLs, and online advertisements will be filtered and killed.

(2) Plug and play, zero configuration. This is another highlight of Deeper products. All deployments can be completed in just one minute of operation. Deeper has created the IP multiplexing technology. Deeper Connect does not need to configure any IP at all. It just multiplexes the IPs of other devices in the network to communicate with the outside world. The advantage of this is that it is extremely simple to install and use, and will not cause any changes to the user's network topology.

(4) Deeper SoC. In addition to actively innovating in software, Deeper has also invested a lot of money in its own hardware research and development. Through the development of its own SoC processor, it can greatly improve network security and network sharing processing speed, and at the same time, it can greatly It greatly reduces the production cost of Deeper Connect and paves the way for Deeper Connect to enter the homes of billions of Internet users around the world.

The above-mentioned technologies are accumulated by the Deeper technical team for decades, and they are all original technologies. This is definitely not something that can be achieved simply by modifying an open source project. Such core competitiveness will allow Deeper to Both worlds, Web 2.0 and Web 3.0, are unique and well-versed.

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3. Excellent market and operation conditions

(1) Company profitability

(2) The sound and standardized operation of Deeper

As an important part of its network ecology, after more than two years of hard work, Deeper hardware products not only successfully shined at the 2020 CES conference, but also launched the fourth generation on Indiegogo, the most well-known technology hardware crowdfunding platform in the United States. The release of Deeper hardware products, Deeper Connect did not publicize its investment value in the blockchain field in this crowdfunding, but it was still sought after by American users, and finally exceeded the crowdfunding goal by 2500%. The crowdfunding users came from more than 120 Countries and regions, and has long been ranked among the top 100 sales results among the nearly one million online products on the platform.

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4. Fully prepared for IPO

It is a novelty in the entire blockchain industry that a blockchain-applied company should go public. We now know of real blockchain companies that have gone public, including Coinbase, a blockchain exchange that has just gone public. There are also Canaan Zhizhi, a mining machine production and operation company that was listed in the United States before, and Nineth City, which also got involved in blockchain mining, but Nineth City was listed before making mining machines.

So strictly speaking, companies that can really start from the blockchain and finally go public are very scarce. But we believe that with the large-scale application of the blockchain, more and more blockchain application-level companies that can really go out of the circle will embark on the road to listing.

At the beginning of the project, Deeper has already formulated a strategic path for listing on the capital market. Let's analyze Deeper's capital market road from the current situation of Deeper.

(1) Fully meet the listing requirements

The Nasdaq stock market is divided into three levels, from high to low are The Nasdaq Global Select Market (NASDAQ-GS), The Nasdaq Global Market (NASDAQ-GM) and The Nasdaq Capital Market (NASDAQ-CM), each Each level corresponds to different listing conditions, and there are 3 to 4 sets of listing conditions for each level, and only one of them can be met.

Judging from the company's latest financial data, it has met the listing conditions of Nasdaq, and the company will strive to meet the highest standards for listing in the future. According to the financial report disclosed by the company in 2020, the company sold 12,000 Deeper connect devices, achieving sales revenue of nearly 3 million US dollars.

According to the company's current plan, the sales volume in 2021 is 100,000 units. Based on the current market price, the sales revenue will be around 30 million US dollars; the total sales volume will reach 1 million units in 2023, and the sales revenue will be 300 million US dollars. Fully meet the listing standards of Nasdaq (CM-GM). Whether it meets and realizes the highest GS listing standards depends on the actual operation of the company. That is to say, the possibility of the company's listing is very high, and it is basically certain that it can be successfully listed. sexual conditions.

(2) The sponsoring institution is strong

(3) Fully prepared at present

According to the announcements disclosed by the company so far, the preparations for the company's public offering and listing are very meticulous, and a detailed capital market listing plan has been formulated. According to the specific listing time, corresponding detailed internal indicator guidelines have been formulated. The above indicators include technical indicators, market indicators, financial indicators, and indicators for the introduction of well-known investors.

How much can the IPO-NFT valuation reach?

After analyzing the listing possibility of Deeper, let’s analyze the value of Deeper’s IPO-NFT. Deeper's own products have both functional functions (firewall, DPN, DWeb, DCDN) and future network infrastructure functions (infrastructure mining machines), so the evaluation of IPO-NFT should be a combination of the two values.

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1. Future capital value of Deeper

To analyze the future capital market value of Deeper, there are two analysis methods that are recognized by the market as the most reliable: one is the price-to-sales ratio valuation method, that is, the PS valuation method; the other is the industry evaluation and comparison method; here The core of why we did not adopt the normal PE valuation method is that we do not know the actual profit of the Deeper project, and we cannot guarantee that the company will not make some whitewash on its financial statements in order to go public. Therefore, we adopt a more reliable and transparent valuation method to make a relatively reliable analysis of its future valuation.

According to Deeper's current development plan, the company will realize the sales and deployment of 1 million devices in 2023. According to the current market price of 299 US dollars per device, the company's sales revenue in 2023 will be about 300 million US dollars; if The company is successfully listed, and its PS multiple will be compared to Fortinet Inc's 33.5 (corresponding to sales revenue of 2.46 US dollars), Zscaler Inc's 45.92 (corresponding to sales revenue of 431 million US dollars), so we conservatively estimate the market situation and take PS=15 -20 times the value, the company's valuation is about 4.5-6 billion US dollars in market value.

If according to Deeper's plan, 100 million network devices will be installed in the next 5-10 years after listing, then the network effect of its links will give birth to an extremely large network ecological platform. We can imagine 100 million devices, even if a device only sells for 50 US dollars, it is still 5 billion US dollars in revenue. According to the valuation of the network ecological platform, its PS value of 30 is a completely conservative valuation idea, then the company's future It is very likely that it will join the camp of the 100 billion market value club.

This is also the core reason why we are optimistic about the future value of Deeper. It is precisely based on the estimation of the future value of Deeper that we are so optimistic about the IPO-NFT launched by Deeper, and we also expect it to bring us rich capital returns in the future.

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2. From the perspective of future network infrastructure, what is the value of IPO-NFT?

(1) Basic situation of future network infrastructure

Since the Prism Gate incident in 2013, we have become more and more aware of the importance of network decentralization. It is against this background that the concept of Web3.0 was born, and the blockchain with the characteristics of decentralization will inevitably It is an important infrastructure of Web3.0. Today, the blockchain technology, which has been developed for more than ten years, has gradually made more people understand it and participate in it. We can review the development of the existing blockchain and look forward to the future.

Now, the two most popular cryptocurrencies are Bitcoin and Ethereum. Bitcoin represents the largest consensus bookkeeping network, and Ethereum represents the largest computing network. They are the two most indispensable infrastructures at present. , but from a technical point of view, they rely more on a huge consensus as the core.

For the future Web3.0, it is difficult for Bitcoin and Ethereum to provide enough help in terms of functions. What is more important for Web3.0 is the decentralized network infrastructure at the hardware level, which mainly involves data storage. , network transmission, data calculation, etc. As a distributed storage, Filecoin is carrying the requirements of Web3.0 in terms of decentralized storage, while Deeper Network is carrying the requirements of Web3.0 in terms of decentralized network transmission as a decentralized private network.

(2) What benefits will these infrastructures bring?

As the largest consensus accounting network, Bitcoin’s huge value has also given birth to many listed companies and giant companies. There are mainly two types of them, one is the mining machine manufacturer, and the other is the mining party.

Bitmain, Canaan Creative, and Ebang International are companies that focus on mining machine production, and there are even more giants involved in mining. Canada’s listed mining company HiveBlockchain, the world’s oldest mining giant CoreScientific in the United States, and the UK listed The mining company Argo Blockchain, the Nasdaq-listed mining company Riot Blockchain, and the German-listed mining company Northern Data all entered the cryptocurrency mining industry sooner or later. It can be seen that behind the virtual decentralized network, large-scale enterprises that earn dividends around hardware will definitely be born in reality.

Thanks to the different operating mechanisms, Deeper hardware may be more scarce than expected, because Deeper hardware can go out of the circle. In addition to mining functions, it is also equivalent to an enterprise-level firewall hardware, hardware wallet, etc., that is to say , even without mining, these functions are very competitive in the market for this price.

Therefore, a product that is both useful and capable of mining, like Deeper hardware, will definitely become a bestseller both inside and outside the cryptocurrency circle, and quickly build a decentralized dedicated network, which in turn will generate network effects. The hardware company behind it is further empowered.

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3. Calculate the warrant price according to Black Scholes Pricing (BS model)

In view of the fact that Deeper is expected to become a great company comparable to Google, Tesla, and Apple, we deliberately selected Tencent, Tesla, Bilibili, and Hikvision according to the characteristics of the company's innovation, network security, and computing power dispersion. Equal to comparable listed companies, and compare their market capitalization at the time of IPO with their current market capitalization.

Assuming that you hold company warrants and exercise them immediately on the date of the company's IPO, the current market price of the stock is assumed to be comparable to the market value of the above-mentioned reference company, the exercise price is the price at the time of IPO, and the warrants are held for 3 and 5 years respectively. The market price calculation formula is as follows

C = Se-δtN(d1)-Xe-RTN(d2)

in:

d1 = (LN(S/X))+[R-δ+σ2/2]T/σ T

d2 = d1-σ T

Use Black Scholes Option Pricing (referred to as BS model) to calculate the warrant price, namely:

in:

S: the current price of the underlying stock

X: the strike price of the option

σ: stock volatility (stock price standard deviation)

δ: dividend yield

N(d): The probability that the deviation in the standard normal distribution is less than d

R: annual risk-free rate with continuous compounding

T: Time before option expiration (years)

If it is comparable to Tencent and Tesla, the value of each warrant (which can be subscribed for 2,000 US dollars) is approximately: 12,762,352.00 US dollars.

If it is comparable to Bilibili and Hikvision, the value of each warrant (which can be subscribed for 2,000 US dollars) is approximately: 257,669.00 US dollars.

Deeper's recent developments and future prospects

1. The research and development of Deeper SoC is progressing smoothly. It is planned to tape out at the end of the year and mass-produce at the beginning of next year.

As a chip specially designed for Web3.0 decentralized infrastructure, Deeper SoC has the advantages of high performance, low power consumption and low cost. Deeper's future goal is to deploy billions of nodes around the world to provide enough infrastructure for Web3.0 with sufficient performance. Deeper SoC is a key part of this ambitious goal.

2. The development of the Deeper Connect WiFi prototype is progressing smoothly, and all development work is expected to be completed in the third quarter.

Deeper Connect was originally designed as a wired mode, which enters the user's network through a wired connection with a home router. After the introduction of wireless functions, Deeper's upgraded product, Deeper Connect WiFi, has a major milestone:

(2) The introduction of the WiFi function enables Deeper Connect to have the function of a home router on the basis of the original network security, DPN and mining functions. Therefore, Deeper Connect can directly reduce the dimensionality of the home router market. This is like Apple released the iPod Touch before releasing the iPhone, and then waited until the iPod Touch matured to add 3G functions, thus transforming itself into an iPhone, and starting a dimensionality reduction blow to the mobile phone market.

*Blockchain Knight reminds readers to guard against investment risks. This article is for learning and understanding only, and does not constitute investment advice.