# Restake Finance Moon Math

**Published by:** [Cookies Research](https://paragraph.com/@cookies-research/)
**Published on:** 2024-01-10
**URL:** https://paragraph.com/@cookies-research/restake-finance-moon-math

## Content

Restake Finance is a liquid restaking token (LRT) protocol, serving as a front-end of EigenLayer to allow for ease of restaking. To learn more about Restake Finance, refer to this tweet here, and to understand the basis of EigenLayer and restaking, refer to this. In this article, I bring you through the framework I used to value the FDV of Restake Finance ($RSTK). Disclosure: Author holds $RSTK. Nothing expressed in this article is considered as financial advise. These are just the author’s thoughts and personal views.FrameworkNote: Calculations in AppendixProject the growth in LST TVL over the year of 2024Calculate the current LRT TVL / LST TVL ratio - 3 scenarios This ratio is taken as the bear case for the TVL that LRT protocols can achieve The neutral and bull case are taken as 5% and 10% respectively - Speculating that the proportion of staked ETH that gets restaked will increase over timeCalculate the potential market share that Restake Finance can have - 3 scenarios The current LRT market share distribution is taken as the bear case for Restake Finance’s market share - Calculated by taking mainnet and testnet figures The neutral and bull case are taken as 5% and 15% respectively - Speculating that Restake Finance will be able to attract a higher volume of staked ETH compared to other LRT protocolsCalculate Restake Finance’s revenue in each of the cases Revenue = 5% x EigenLayer Yield x Restake Finance’s Market Share Note: 5% is the revenue cut that Restake Finance takes from the yield to users There will be 9 distinct annualized revenueCalculate weighted revenue for various Restake Finance market share scenariosCalculate weighted revenue for various LRT / LST ratio scenarios Once this step has been completed, there will be 1 single annualized revenueFind industry P/S ratio Using the LST market as a proxy Industry P/S ratio = Avg weighted (individual LST protocol P/S ratio x market share)Find Restake Finance valuation Industry P/S ratio x Restake Finance’s annualized revenueConclusionThe eventual valuation I calculated for Restake Finance = $310,346,354 Current Restake Finance FDV = $220,000,000 (as of 11 January, 2024) This projected FDV corresponds to a price of $3.24. Hence, it can be argued that there is still growth potential for $RSTK. It should also be noted that the valuation for Restake Finance can be even higher should we factor in additional yields, as it would increase its revenue. For example, AVS might incentivize restakers on Restake Finance to secure their protocol by offering extra yields to a particular vault (something similar to Curve wars). In addition, the calculations were done over a 1-year period. Extrapolating it over a longer period of time will likely yield much higher annualized revenue. To meme it, we apply a 3x multiple because of: (a) 1st liquid restaking token to be launched (b) Hype from the launch of AVS And that would be a price of $9.72. NFA. I’m a Cookie that can’t count.AppendixProjecting Total LRT TVLProjecting Restake Finance's Revenue for Various LRT / LST % ScenariosRestake Finance Price Projection

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