Abstract
Vigor protocol, PIZZA and Maker Dao were top performing projects with the market cap to total value locked ratio of 0.15, 0.13 and 0.28 respectively. Equilibrium and BZX were most overvalued projects with the ratio above 20 which is far above the benchmark of 1. It is important to look on additional value and performance metrics beyond Price (market cap) to Sales (total value locked) ratio before making investment decision. This analysis was for research and academic purpose only, hence is not be taken as an investment advice.
1. Introduction
The recent interest of DEFI has attracted a lot of attention from investors, policy makers and academicians. The industry grew from a very small base last year to over 12 Billion dollars at the time of writing. In this article we are interested to rank the performance of the top lending DEFI projects across different block chains.
2. Methodology
The data used were sourced from DEFI Pulse, EOSPAYOUT, and Coin Market Cap. In our analysis we only considered the lending DEFI projects. We used the latest reported data as of October 24, 2020. In all the projects we used fully diluted market cap except PIZZA which has substantial token locked. Instead we used the reported market cap of PIZZA from Coin market Cap.
3. Results and Discussion
Our results shows three highly undervalued project and somewhat highly over valued projects. Vigor Protocol, PIZZA and Maker Dao had a score below 0.3 which is far below the threshold of 1 indicating undervalued status. On other side Equilibrium, DMM and BZX had higher score beyond one which shows that they are overvalued.
4. Conclusion
While the empirical findings in this article shades some light on the project valuation, it is important to look on any value and performance metrics beyond Price Sales ratio before making investment decision. This analysis was for research and academic purpose is not meant to be investment advice.
References
Defi Pulse. (2020). Defi Pulse Data Platform. Available publically at https://defipulse.com/
Coinmarket Cap. (2020). Coin Market Cap Data Platform. Available publically at https://coinmarketcap.com/
EOSPAYOUT.(2020). EOS Payout Data Platform. Available publically at http://www.eospayout.com/defi/
