# DeFi Blue Chip valuation

**Published by:** [Unda Rada ](https://paragraph.com/@mentori/)
**Published on:** 2022-02-18
**URL:** https://paragraph.com/@mentori/defi-blue-chip-valuation

## Content

This articles is from @Block49Capital which contains a lot of infor, If you like the post please give them a visit. 1. Market Cap/TVL 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 $AAVE $MKR $COMP 2. FDV/TVL Similar to the previous metric except now we are looking at the fully diluted value (if all coins were in circulation). $UNI $AAVE $MKR $COMP $SNX $SUSHI $YFI $CRV 3. Annual Revenue / TVL 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 $AAVE $MKR $COMP $SNX $SUSHI $YFI $CRV 4. Market Cap / Annualized Revenue 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 $MKR $AAVE $COMP $SNX $SUSHI 5. Market Cap / # of Users 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. 6. Revenue / # of Users This paints a bit clearer picture than metric 5. We can see that $AAVE's high MKT/User is likely due to its high revenue per user whereas $SNX might be overvalued given that it's Rev/User does not match up with its MKT/User. $COMP $SUSHI $YFI $MKR $UNI 7. Closing thoughts 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 $ETH This articles is from @Block49Capital which contains a lot of infor, If you like the post please give them a visit.

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