Thread by @CRPTO_33

Is @OlympusDAO $OHM overvalued or undervalued?... that's the question I am trying to answer... a thread.

#1/15 Note: this is not financial advice... and yes, I have a whole lot of $ohm.... that's why I dedicate so much time to understanding it

#2/15 $OHM valuation is not easy to tackle... as a novel protocol, there's so much to be learned yet

#3/15 Here I try to shed some light on the relative valuation of $OHM compared to other protocols

#4/15 Of course I recognize that I may be comparing apples to oranges, as all these protocols are different in their goals and inner workings

#5/15 But here is my hypothesis... and I recognize this is a back-of-the-envelope approach: most assets are valued discounting its future cash flows at a given discount rate

#6/15 Doing a DCF analysis on multiple different protocols is complex, so I decided to simplify the exercise and calculate the ratio of Market Cap to Protocol Revenues.

#7/15 Market Cap reflects the current value of the protocol... I took that number from @coingecko

#8/15 Protocol revenues are a proxy to cash flows (in the case of $OHM, revenues and cash flow are close, as @OlympusDAO has really low expenses)... I took the 7-day protocol revenue from cryptofees.info and multiplied it by 365 to get a proxy to annualized revenues

#9/15 The results are startling... @OlympusDAO Market Cap / Revenue multiple is a fraction of that of other protocols (and I made this calculation before the last days $OHM DIP, now the difference might be even greater)

#10/15 That does mean @OlympusDAO and $OHM are undervalued? Maybe

#11/15 or maybe the market is assigning a much higher "discount rate" to $OHM future cash flows, or expect $OHM future cash flows to go down... that is also a possibility

#12/15 ... or maybe $OHM, as an unpegged reserve currency, should be valued in a totally different way

#13/15 But it's a fact that @OlympusDAO built one of the largest revenue generating machines in the metaverse (@OlympusDAO was generating the third largest 7-day revenues at the time of the analysis)

#14/15 I just do not understand why the market is valuing @OlympusDAO revenues so low... maybe I am not seeing something

#15/15 While I continue the search for an answer, and just in case, I will continue buying all the $OHM I can.

I hope this thread prompts some interesting discussion around how to value $OHM. Shoot!