What Are the Limitations of Using Only Transaction Volume as a Proxy for Network Services Value?

Transaction volume alone is a limited proxy because it does not distinguish between high-value, meaningful economic transfers and low-value, automated, or spam transactions. A high volume of small, repeated transactions can artificially inflate the metric without representing true economic value.

Furthermore, transaction volume does not account for off-chain activity or the value of non-transfer services, such as smart contract execution or data storage.