Valuation Model Discussion: What should the reasonable market value of Lorenzo Protocol (BANK) be?

To reasonably value #LorenzoProtocol ($BANK ), it cannot rely solely on market sentiment but must be based on its core business fundamentals and industry comparable benchmarks. Currently, two main models are commonly used for estimation: Price-to-Sales (P/S) model and Fully Diluted Valuation (FDV) to Total Value Locked (TVL) ratio model.

1. Price-to-Sales (P/S) Model Based on Protocol Revenue

The core of this model is to treat the protocol as a company whose value should reflect its profitability. The valuation logic is: reasonable market value ≈ annual protocol revenue × reasonable P/S multiple.

• Protocol Revenue: Mainly includes revenue sharing from LBTC staking, interest cuts from CDP lending, etc. This portion of revenue is directly related to the value of Bitcoin locked in the protocol (TVL).

• P/S Multiple: Can refer to the valuation levels of mature DeFi protocols (such as Lido, Aave, etc.). Given the greater growth potential of the Bitcoin DeFi track that Lorenzo is in, the market may assign a higher growth premium (i.e., a higher P/S multiple).

2. FDV/TVL Ratio Model Based on TVL

This model is more intuitive in the DeFi field, measuring the ratio of the protocol's market value to the size of the assets it manages.

• Logic: The more assets (TVL) a protocol manages, the stronger its ability to generate revenue and its competitive moat should warrant a higher valuation.

• Comparable Analysis: By comparing with other mainstream LSD protocols (such as Lido's FDV/TVL ratio), and considering Lorenzo's first-mover advantage and technical uniqueness in the Bitcoin space, a relatively reasonable FDV range can be derived. If Lorenzo's TVL reaches $1 billion, then its FDV reaching 0.5 to 1 times the TVL (i.e., $5 billion to $10 billion) may be a range worth discussing.@Lorenzo Protocol

Conclusion: Overall, the reasonable market value of Lorenzo Protocol is not a fixed number but a dynamic range, with the core driving factors being the growth rate of TVL and the protocol's revenue capture capability. As the Bitcoin ecosystem explodes, its valuation ceiling will continue to be unlocked.