While the P/E ratio is a great starting point for cryptoasset valuation, it should not be used in isolation.

- What's driving 'E'? Token incentives / organic adoption?
- What does the rev. composition look like? One or multiple sources?
- Is the revenue share % sustainable?
- What's driving 'E'? Token incentives / organic adoption?

Example: @compoundfinance

Currently, there's more $ paid out in token incentives vs. what's coming in as protocol revenue.

Nothing unusual for an early-stage startup, but worth being aware of.
- What does the rev. composition look like? One or multiple sources?

Example: @Uniswap

The long-tail of assets (other category) is driving the majority of Uniswap's (LP) revenue.

Diversity > concentration
- Is the revenue share % sustainable?

Example: @MakerDAO

Currently, all interest payments go to the protocol (MKR holders).

Will Maker eventually have to share this revenue with CDP creators / depositors?

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More from @tokenterminal

23 Jul
1/ A thread on why we're building Token Terminal 🧵👇 Image
2/ What is Token Terminal?

A data analytics platform for crypto assets. Image
3/ Why should you care? Image
Read 23 tweets
21 Jul
1/ Introducing percentage or market share views! 🚨

With a few simple clicks, users of Token Terminal can now switch between

- 7d, 30d, 90d, 365d, max
- cumulative / daily / monthly
- absolute / percentage views

Let’s work through a few examples! 👇🧵
2/ Looking at the Protocol Revenue dashboard:

- The rise of @AxieInfinity is clearly visible
- Also the rapid emergence of @PancakeSwap
- @synthetix_io relative share has gone down (launch on Optimism might reverse this?)
3/ Looking at the Total Revenue (supply-side + protocol) dashboard:

- @ethereum's share of total fees has gone down
- Even here, @AxieInfinity's recent growth is clearly visible
- We can also see that even @binance smart chain has to charge its users meaningful tx fees 😄
Read 10 tweets
7 Jul
1/ Introducing the price to earnings (P/E) ratio!

A natural next step after the price to sales (P/S) ratio.

A thread 👇

2/ The 'E' in the P/E ratio will initially be based on protocol revenue, i.e. money generated from the protocol’s business & subsequently allocated to its treasury or distributed to its token holders.

*In the beginning, the P/E ratio won't take into account a protocol's costs.
3/ How should I use the P/S and P/E ratios when analyzing a protocol?

We’ll go through 3 different scenarios, which highlight the possible revenue distributions of a protocol, and how the distribution affects the two ratios.
Read 7 tweets
5 Jul
1/ New to Token Terminal?

Here’s a thread with tips & tricks that will help you get started using the platform! 👇
2/ Website layout 🎨

• Landing page: protocol revenue chart + customisable data table
• Metrics dashboards: total revenue, protocol revenue, P/S ratio, TVL
• Markets dashboards: exchange, lending, blockchain, DeFi
• Project dashboards: choose your favourite!
3/ Landing page 🛬

• Protocol revenue chart shows you which protocols are generating money for their token holders.
• With the toggle, you'll get similar charts for Total Revenue & Price to sales ratio.
• The customisable data table lets you choose metrics & sort the results.
Read 13 tweets
16 Jun
A few examples of crypto businesses (marketplaces) listed on Token Terminal:

- Supply-side: lenders
- Protocol: $AAVE holders
- Demand-side: borrowers

Revenue = interest paid by borrowers
- Supply-side: lenders
- Protocol: $COMP holders
- Demand-side: borrowers

Revenue = interest paid by borrowers
Read 5 tweets
13 Dec 20
1/ Why the price to sales ratio (P/S) is a useful tool for crypto investors 👇

The price to sales ratio compares a protocol’s market cap to its revenues. A low ratio could imply that the protocol is undervalued and vice versa.
2/ The P/S ratio is an ideal valuation method for early-stage protocols, which often have little or no net income.

Instead, the P/S ratio focuses on the usage of a protocol, by tracking the total fees paid (revenue) by the users of its service. More info: tokenterminal.com/faq
3/ We’re in a historically unique position, with early-stage & high-growth startups operating transparently on-chain.

This transparency makes it possible to find protocols with high usage relative to market cap.
Read 21 tweets

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