DeFi Relative Valuations

With the help of explicit "earnings data" within DeFi protocols — visible via smart contracts on public blockchain networks — today's DAOs provide real-time earnings data. A true analyst dream.

As covered in last week's Summer of DeFi report, the outsized growth in volumes and capital flow (usage) of DeFi protocols has pushed protocol "revenue" (as defined and calculated by Token Terminal) to go parabolic this summer. Through the first two weeks of September, total DeFi protocol revenue has already surpassed $80 million (source: Token Terminal), more than the entire cumulative volume from Jan 2018 - July 2020! For some protocols with a governance token, these protocol fees may already be partially accruing to token holders through various attempts to distribute and capture protocol value (Refer to: Tokens are equity in Internet-native businesses, Honkasalo. July 2020).