Thread by @asiahodl

@UniswapProtocol and DEXs are off to a roaring start with volumes to smash Sept-20 highs.
But how valuable are DEXs actually? We price the largest in the world, $UNI.

Thread👇🏻👇🏻

AMMs have quickly become the most successful DeFi protocols. #Uniswap 's exchange volumes have grown to rival Centralized Exchanges.
$UNI is a governance token, tho it has a fee switch, which allocates 0.05% in fees to holders.

What are these fees worth?
messari.io/article/valuin…

1️⃣Dividend Distribution Model: this is the 1st of 4 methods. It is mostly used to value equities whose core feature is to payout a dividend (once @UniswapProtocol 's fee switch is on).

Below is $UNI's Sept-21E price based on various growth rates and cost of equity

2️⃣Discounted Cash Flow (DCF) analysis: determines the value of $UNI based on future cash flows.

Below is the valuation for the years ahead:
messari.io/article/valuin…

3️⃣Price / Sales and Dividend Yield: We look at global listed exchanges as a set of comparables for UNI.

Below are the comparables and resulting $UNI valuation:
messari.io/article/valuin…

4️⃣Governance Value? We don't assign any until the community can exercise influence on @UniswapProtocol 's directtion .@AndreCronjeTech showed how hard it was getting 10million votes to be a delegate.

https://twitter.com/AndreCronjeTech/status/1307236337276407808?s=20

5️⃣ Risks?
This is the most competitive area of DeFi, especially from .@SushiSwap which was reinvented itself and emerged as a serious competitor in leadership, more contributors, new features & merger with .@iearnfinance (in $YFI 's new network)

messari.io/article/valuin…

6️⃣/6️⃣ There are high expecations for Uniswap v3 (Q1'21E) for major improvements on capital efficiency, slippage & speed.
This could scale $UNI by *orders of magnitude*.

Valuing @UniswapProtocol will provide a benchmark for the entire DEX sector:

messari.io/article/valuin…