According to @QCompounding, the post spotlights Gary Jain’s comparison of ROI vs ROE and highlights why the two measures inform different trading decisions (source: @QCompounding on X). ROI measures profit relative to the amount invested and is commonly calculated as net gain divided by cost, making it useful for project-level return screening and capital allocation (source: Investopedia). ROE captures net income per unit of shareholders’ equity and can be magnified by financial leverage, so traders should decompose ROE via the DuPont framework to separate operating efficiency from balance-sheet effects (source: CFA Institute). For crypto-related equities, earnings and book equity are highly sensitive to digital-asset price volatility, which can swing ROE materially quarter to quarter, so normalize ROE versus leverage and cross-check with ROIC for signal quality (source: Coinbase 2023 Form 10-K; Riot Platforms 2023 Form 10-K). Value creation is more defensible when ROE sustainably exceeds the cost of equity and aligns with strong ROIC, reducing the risk that leverage alone inflates equity returns (source: Aswath Damodaran Corporate Finance; McKinsey Valuation).