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What Are the Limitations of Comparing a Layer 1 Blockchain to a DeFi Protocol Using the Same Multiples?

L1s and DeFi protocols have different value drivers (security vs. revenue); L1s need to be compared using metrics like Total Value Secured (TVS).
Greeks.Live17.11.25

What Are the Limitations of Comparing a Layer 1 Blockchain to a DeFi Protocol Using the Same Multiples?

Comparing a Layer 1 (L1) blockchain to a DeFi protocol using the same multiples (e.g. MC/TVL) is limited because their value drivers are fundamentally different.

L1s derive value from security, decentralization, and developer adoption (TVS), while DeFi protocols derive value from financial utility and revenue generation (TVL/Fees). A direct comparison is flawed; L1s should be compared based on metrics like Total Value Secured (TVS) or transaction volume, not just locked liquidity.

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