Pangolin (PNG) - Low Token Supply DEX

Pangolin (PNG) is an attractive small cap DEX play because of it’s low token supply and upside potential. The biggest question for the project is, how high can it run? Because we have reviewed multiple DEXs, it makes sense to ask, which DEX play is the best one to pick?

I think the answer depends on your goals and risk tolerance (aka not financial advice). Most likely, each of the DEX projects I reviewed will do well during the coming alt season - but some have more tailwinds than others. We attack that question in this post (it is the extra JUICY information that didn’t make it in the video!)

Age: 3yrs

Current Market Cap: $90,000,000

Total Supply: 230,000,000 (minor inflation - 1,000 PNG/mth)

Circulating Supply: 215,000,000 (94%)

Whale Holdings (> 5%): 7.4%

What is the project?

• DEX for the Avalanche chain

  • Avalanche is heavy gaming, I would expect PNG TVL to grow similar with crypto gaming

  • Expect later cycle growth

What is the product?

• Pangolin Elixir 

• BridgeSwap

Markets

• PNG is #2 DEX on the AVAX

  • Hendra

  • Songbird

  • Flare

• Avalanche network (# 10 globally)

• 17% of Avalanche DEX TVL

When we compare different DEX products, we need to consider how their Layer 1s compare because it will impact the amount of trading volume they will see. Base is #7, Avalanche is #10 & Optimism is #12 globally. All subject to change. I stay up to date on these rankings on DeFi Llama.

Revenue potential

• My estimate is up to $1 million /mth

  • Fee structure comes out similar to Uniswap’s (~0.29%)

• ~$100k /mth revenue (avg last 2 months)

  • Fees ~$500k /mth, (avg last 2 months)

• Liquidity pools

• DEX trading fees

Tokenomics

• Low supply and tiny inflation

  • supply was originally 538 million – DAO voted to burn 308 million tokens

• 93% circulating and no large team / backer allocations - Tokenomics are pretty

Team & Community

• Team is doxxed

  • Team has previous DEX experience in Crypto

  • Old team left in Feb 2024

• Telegram is good, a lot of FUD and some concern from outsiders on the team

  • seems to be good community support for the team

A note on the team - I know a lot of folks are confident in the team and I completely understand based on their prior leadership experience. My word of caution is - sometimes team changes are not a good, and it can be for a number of reasons that I will list. I am not saying that any of these is the case, I am just listing risk factors as I’ve experience (or heard about) during my corporate experience:

• Structural issues with the project that make it hard to succeed

• Cohesiveness of new team members, it can take a while to learn how to work together especially when a large number of new team members are added at once

• Knowledge drain, aka a lot of information is lost when a old team members leave. Could slow them down in their UI/UX development too, no indication of this since they released a BETA version of the new UI already

• Investor/community trust, again, does not appear to be the case here

Financial partners

• None

Catalysts

• Low token supply

• New UI/UX

• Marketing

Risks & Downsides

• Not leading AVAX DEX

• New team

• Indirect gaming play, late stage interest

• Questions around UI/UX development

Comparable Projects

Pangolin is a DEX, which makes it easy to compare to other projects. Honestly, it’s numbers aren’t great when you put it up against AERO… no surprise. But, it has a better market when compared to VELO. While VELO has better DEX technology, success comes down to usage. AVAX is a better network to be on compared to Optimism and PNG’s great tokenomics make it a hard project to pass up. It’s not as great of a bet as AERO at $200,000,000 market cap, but I like PNG at low market caps. It is almost altseason after all. Also, look at that price action.

Scores & Market Cap Predictions

Summary & Scores Commentary

It is easy to say the model is wrong about it’s 71% Speculative Potential score, but by taking the emotion out of PNG’s amazing Tokenomics, we can see the model is rightfully concerned about the new team’s ability to execute. I’ll be watching their marketing efforts and their progress on deploying the new UI… so far so good!

The bottom case is based on revenue potential of PNG, and I think it will be hit. The largest uncertainty is how hot the gaming niche will get this cycle (aka AVAX traffic). I am not a big gamer myself, but the niche surprised me last cycle so I think the gap in the justified. Excited to watch this play though alt season.

*Information is not intended to be financial advice to the reader.