How Do Comparables Analysis (Comps) Work in the Crypto Market?

Comps analysis involves comparing a target token's valuation metrics (like Price-to-Earnings, Market Cap-to-TVL, or Fully Diluted Valuation) to those of similar, publicly traded tokens in the same sector or with similar utility. The goal is to establish a relative valuation range.

Adjustments must be made for differences in growth stage, network effects, and tokenomics. This method is often preferred for early-stage projects where cash flows are too speculative for DCF.