# DeFi Blue Chip valuation

By [Unda Rada ](https://paragraph.com/@mentori) · 2022-02-18

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This articles is from [@Block49Capital](https://twitter.com/Block49Capital/status/1392583778795720707) which contains a lot of infor, If you like the post please give them a visit.

1\. Market Cap/TVL
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Measures the value of each $ locked in the protocol. Protocols that trade at higher multiples are not necessarily overvalued, as they often generate more revenue per $ of TVL

[$UNI](https://twitter.com/search?q=%24UNI&src=cashtag_click) [$AAVE](https://twitter.com/search?q=%24AAVE&src=cashtag_click) [$MKR](https://twitter.com/search?q=%24MKR&src=cashtag_click) [$COMP](https://twitter.com/search?q=%24COMP&src=cashtag_click)

![](https://storage.googleapis.com/papyrus_images/f33c279288bd8484469a2e0847863eb6a2ea2aeeb95b619b33f2960c7880a0db.png)

2\. FDV/TVL
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Similar to the previous metric except now we are looking at the fully diluted value (if all coins were in circulation).

[$UNI](https://twitter.com/search?q=%24UNI&src=cashtag_click) [$AAVE](https://twitter.com/search?q=%24AAVE&src=cashtag_click) [$MKR](https://twitter.com/search?q=%24MKR&src=cashtag_click) [$COMP](https://twitter.com/search?q=%24COMP&src=cashtag_click) [$SNX](https://twitter.com/search?q=%24SNX&src=cashtag_click) [$SUSHI](https://twitter.com/search?q=%24SUSHI&src=cashtag_click) [$YFI](https://twitter.com/search?q=%24YFI&src=cashtag_click) [$CRV](https://twitter.com/search?q=%24CRV&src=cashtag_click)

![](https://storage.googleapis.com/papyrus_images/7be8584e6d4099d54b6108c0a72f92e79098cb6dc69011fc5c20fda7ac5faf09.png)

3\. Annual Revenue / TVL
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This shows how much each $ locked generates in revenue. This metric helps explain the MKT/TVL ratio as it is clear the market assigns a premium for protocols that are more capital efficient.

[$UNI](https://twitter.com/search?q=%24UNI&src=cashtag_click) [$AAVE](https://twitter.com/search?q=%24AAVE&src=cashtag_click) [$MKR](https://twitter.com/search?q=%24MKR&src=cashtag_click) [$COMP](https://twitter.com/search?q=%24COMP&src=cashtag_click) [$SNX](https://twitter.com/search?q=%24SNX&src=cashtag_click) [$SUSHI](https://twitter.com/search?q=%24SUSHI&src=cashtag_click) [$YFI](https://twitter.com/search?q=%24YFI&src=cashtag_click) [$CRV](https://twitter.com/search?q=%24CRV&src=cashtag_click)

![](https://storage.googleapis.com/papyrus_images/1c351e1111b49c2b669aad6cd62666bca0b29f3321ba58c5b4929a80d861e4a2.png)

4\. Market Cap / Annualized Revenue
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This metric compares how much each protocol is worth relative to its earnings. A high MKT/REV could either indicate an overvalued protocol or could indicate a high growth multiple priced in by the market.

[$UNI](https://twitter.com/search?q=%24UNI&src=cashtag_click) [$MKR](https://twitter.com/search?q=%24MKR&src=cashtag_click) [$AAVE](https://twitter.com/search?q=%24AAVE&src=cashtag_click) [$COMP](https://twitter.com/search?q=%24COMP&src=cashtag_click) [$SNX](https://twitter.com/search?q=%24SNX&src=cashtag_click) [$SUSHI](https://twitter.com/search?q=%24SUSHI&src=cashtag_click)

![](https://storage.googleapis.com/papyrus_images/ad879d8ab99e7b81967f0477867e535eb60e32df081f42f5ffec9aec6d1dd742.png)

5\. Market Cap / # of Users
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This effectively shows how much each user of the protocol is worth. A high MKT/User ratio can either indicate an overvalued protocol or that each individual user provides a lot of value. Again these metrics often require more than one to compare.

![](https://storage.googleapis.com/papyrus_images/7ea42fad5e2dd8c7fbc5a28672aa2c2dd90c0552675a49d28ef59647a139e71a.png)

6\. Revenue / # of Users
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This paints a bit clearer picture than metric 5. We can see that [$AAVE](https://twitter.com/search?q=%24AAVE&src=cashtag_click)'s high MKT/User is likely due to its high revenue per user whereas [$SNX](https://twitter.com/search?q=%24SNX&src=cashtag_click) might be overvalued given that it's Rev/User does not match up with its MKT/User.

![](https://storage.googleapis.com/papyrus_images/70ce2a37c0bd78ced39ca4d407e3fc85bc1fe3e12c022d0c9b030bb45c4487a5.png)

[$COMP](https://twitter.com/search?q=%24COMP&src=cashtag_click) [$SUSHI](https://twitter.com/search?q=%24SUSHI&src=cashtag_click) [$YFI](https://twitter.com/search?q=%24YFI&src=cashtag_click) [$MKR](https://twitter.com/search?q=%24MKR&src=cashtag_click) [$UNI](https://twitter.com/search?q=%24UNI&src=cashtag_click)

7\. Closing thoughts
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A reminder that any sole metric does give an accurate representation of whether a protocol is under or overvalued. However, by looking across a number of metrics and making comparisons we can get a better idea of a protocol's true valuation.

[#DeFi](https://twitter.com/hashtag/DeFi?src=hashtag_click) [$ETH](https://twitter.com/search?q=%24ETH&src=cashtag_click)

This articles is from [@Block49Capital](https://twitter.com/Block49Capital/status/1392583778795720707) which contains a lot of infor, If you like the post please give them a visit.

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*Originally published on [Unda Rada ](https://paragraph.com/@mentori/defi-blue-chip-valuation)*