What Are the Key Valuation Multiples Used in Crypto Comps Analysis?
Key valuation multiples include Market Cap to Total Value Locked (MC/TVL), Price to Sales (P/S) or Price to Protocol Revenue, and Fully Diluted Valuation (FDV) to Protocol Revenue. The MC/TVL is dominant in DeFi.
P/S is adapted to use the protocol's fee revenue as the "sales" metric. These multiples are compared across similar projects to establish a relative valuation range, allowing analysts to identify potentially undervalued or overvalued assets.
Glossar
Valuation Multiples
Multiple ⎊ Valuation Multiples are standardized ratios used in fundamental analysis to estimate a cryptocurrency's intrinsic value by comparing its market capitalization to a key on-chain or financial metric.
Fully Diluted Valuation
Calculation ⎊ Fully Diluted Valuation in cryptocurrency, options, and derivatives represents the theoretical price of an asset assuming all potential convertible securities are exercised.
Market Cap to Total Value Locked
Ratio ⎊ The Market Cap to Total Value Locked (TVL) ratio represents a comparative assessment of a cryptocurrency project's market capitalization relative to the total value of assets deposited within its decentralized applications (dApps).