Viewpoint: The price-earnings ratio of DeFi ranges from 27 to 5476, with a large span and many bubbles
Editor's Note: This article comes fromChatting with Xiaozha (ID: xiaonazha88), reprinted by Odaily with authorization.
Editor's Note: This article comes from
Chatting with Xiaozha (ID: xiaonazha88)
Chatting with Xiaozha (ID: xiaonazha88)
, reprinted by Odaily with authorization.
The valuation of cryptocurrencies may be a bit metaphysical, and many valuation methods in the stock market are not applicable.
At present, projects that can have cash flow in the encryption field: centralized exchanges, mainstream public chains, mining pools, and DeFi projects.
Effective valuation methods can be used to find value depressions. For DeFi projects, how to evaluate to find value depressions?
However, after some searching, I found two points: 1. The current DeFi valuation is relatively high and the risk factor is high; 2. DeFi is popular, but the flow of funds is regular, which can be used for the next ambush.
Let's go into details.
1. DeFi valuation method, choose the tallest among the short ones
DeFi has cash flow, and the traditional financial price-earnings ratio calculation method can give DeFi tokens a valuation?
This answer can be said that there must be a problem, because the price-earnings ratio cannot accurately value centralized exchanges such as BNB, HT, and OKB.
However, there is currently no better way to value it, but it may become a way to help understand the value of the DeFi protocol now.
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2. DeFi valuation, apply price-earnings ratio
A price-to-earnings (PE) ratio means that the market is willing to pay $100 for every $1 a company generates, such as the PE ratio of Netflix High Tech Growth stock is 84.2, which means that the market is willing to pay $84 for every $1 that Netflix makes.
DeFi emerged on Ethereum, a new currency protocol that generates cash flows by charging small usage fees, which are used to: 1) distribute them directly to ecosystem participants 2) burn native tokens to drive scarcity.
3. DeFi products, low yield, high price-earnings ratio
1. Mortgage lending (leverage)
2. Decentralized Exchange Tokens
3. Derivatives (options and futures market)
1. Mortgage lending (leverage)
1. Mortgage loan
2. Decentralized Exchange Tokens
The following three categories, take 1~2 examples, to see how they make profits through usage.
2. Decentralized Exchange Tokens
1. Mortgage loan
Aave: The fees incurred for lending are split between the lender and the protocol. The protocol's fees are used to burn LEND tokens.
3. Derivatives
2. Decentralized Exchange Tokens
Kyber Network: KNC tokens are used to pay token transaction fees, a part of KNC is destroyed and permanently removed from the circulating supply, and the remaining part is allocated to the reserve manager who pledged KNC.
3. Derivatives
Synthetix: It is a synthetic asset issuance protocol where SNX holders can pledge tokens and earn fees generated by trading synthetic assets.
After a brief understanding of the profit method, let's see the profitability of the above-mentioned DeFi products.
According to tokenterminal data, 7 products in the DeFi series have been sorted out, and the profitability is as follows:
Data source: tokenterminal
From the perspective of profitability, in the DeFi track, the profitability of decentralized exchanges is still strong, the profitability of mortgage lending is relatively weak, and the profitability of derivatives is relatively bright.
The above is cash flow, so what is the price-earnings ratio of these DeFi tokens?
According to tokenterminal data, organize as follows:
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Data source: tokenterminal
Combining the price-earnings ratio and profitability, in the DeFi track:
1. Decentralized exchanges: strong profitability, lowest price-earnings ratio;
3. Derivatives: good profitability, moderate price-earnings ratio.
From the perspective of DeFi's price-earnings ratio, it seems that it is not obvious enough for us to buy tokens.
Then, regarding the centralized exchanges, from the perspective of currency price increase, price-earnings ratio, and time, see if there is a certain pattern between them.
Why compare it with centralized exchanges? Because DeFi mortgage lending, decentralized exchanges, and derivatives have corresponding products in centralized exchanges.
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4. Comparison between DeFi and centralized exchanges
For comparison, we compiled a comparison of gains among mainstream currencies (BTC, ETH), centralized exchanges (BNB, HT, OKB), and DeFi tokens (KNC, LRC, BNT, etc.).
It mainly focuses on the increase of tokens and the price-earnings ratio since March 12. According to the data of Aicoin and tokenterminal, the following figure is organized.
In terms of growth rate, from March 12 to June 14, the overall growth rate of DeFi series tokens is relatively large.
From the perspective of price-earnings ratio, the price-earnings ratio of DeFi series tokens far exceeds that of exchanges and mainstream currencies, reaching an outrageous state, which means that it is very dangerous now.
What is the relationship between the rise of DeFi series tokens and the rise of exchange tokens in time? So the K-line diagrams of KNC, LRC, LEND, and BNB were intercepted.<->Comparing the K-line chart, it is found that the BNB trend has entered a period of sideways volatility after coming out of the trough on March 12. During this period, DeFi series tokens began to rise sharply.
Let’s revisit the five modes of DeFi capital flow:<->1. Unlimited Quantitative Easing (QE) -> BTC/ETH
2. ETH growth<->ERC20 growth
3. ETH growth<->DeFi gets growth
4. DeFi gains growth
