Investors no longer buy based on slogans and hype. We are now using real financial metrics similar to those used in evaluating company stocks.
1. The profit multiple for crypto (P/F Ratio)
In stocks, we use (P/E) and in crypto, we use Price-to-Fees Ratio:
The equation: market value of the currency ÷ the fees generated by the protocol annually.
Meaning: if the number is low, it means that the currency is cheap compared to the profits it generates. (Buying opportunity 🟢).
2. Total Value Locked (TVL)
This indicator is the bank's treasury in the DeFi world:
It represents the total funds that users have put into the protocol.
If the market cap is less than the TVL, this often indicates that the currency is undervalued.
3. Real Yield Analysis (Real Yield)
Investors are looking for currencies that provide them with profits from usage fees rather than through printing new coins (inflation).
. Token Burn Model (Buyback & Burn)
Some projects use their profits to buy back their coin from the market and burn it (like Binance does with BNB).
Financially: this reduces supply and increases each investor's share of the remaining value, similar to a stock buyback in major companies.
