Hello everyone, today I will show you how to value projects using fundamental analysis. Oke today we will come to the topic of pricing current prominent Layer 2 projects and guide how to value a project in the Crypto market. * Normally, the project valuation process of a newcomer to the market, as I see it, usually has 3 stages. – Valuation according to Token price: at this stage, Newbie often compares the token price of projects with each other to value a project – Valuation according to Marketcap (Capitalization of the project) is usually this valuation step that you I see a lot of people valuing by comparing the Marketcap of projects with each other – And the best way to value a project for me, we need many factors to know if a project is right for its value Is it true or is the project overvalued? and the first thing we need to pay attention to is: Fully diluted market cap (fully diluted market cap) called FDV for short (2nd FORM) * Formula to calculate FDV = token price X Total Supply (Max Supply) you have You can quickly check FDV parameters of projects through websites like CoinmarrketCap or Coingecko and to be more sure we can recalculate because sometimes these platforms also miscalculate FDV due to incorrect information about total supply. corpse. To check the total supply, please go to the project’s contract to check. * To price an accurate project, let’s compare the FDV of projects in the same array, for example Layer 2 on ETH. For example, here I compare OP with Arb, I will compare OP with (estimated). The project with the highest FDV in the same Layer 2 Optimistic Rollups array) is Arb. * Currently, Arb’s FDV is 9.3B$ and OP’s is: 4.6B$ (Arb valuation is X2 compared to OP) * Ok now let’s check some basic information like TVL (total locked assets) on the network) and TPS (transaction speed / s) * First to compare TVL and Use of projects, please use (https://defillama.com/chains)(https:// l.facebook.com/l.php?u=https%3A%2F%2Fdefillama.com%2Fchains%3Ffbclid%3DIwAR1ePdnRSJJO2YOVK6MwPsys8gP1fY7B3O6AFP6oVmckChzTsGQf_bXB10y7QZ8DXF1VIfuy7Z8DXF1V IMemOvaK7_B_qjLpWYJ77qCJvkU96jQwUwiOZidWgydaUkAm3sKqFzK2Y-dUI2EgUXCggSrPSTELOJ5j3vdm5oD_vPZpuV3qnPLRzicKhIs3Mhwuwh2VDYHHGFr6hr2MGWyHH 9M5VE40i6YvX47j4bXhE50qMVeR9GvTFh7RAowPbxPt_zUknKV7EQ&__tn__=-UK-R&c(0)=AT33a_7GCXQOGbKz8-HQnmS_UlhIfSHlNXkIApcm3-2FvZhJXJO6QK84WXJO6Q GAxbjnrxU_Ar1MFJH12fQRoRrzFVuwsD-TurYbdEh9_3wvxranqkAHZMjUx7xIExhF_4WmqSg6xvMVyfot7hY7unYGl4lQ) => go to the chain item like FIGURE 3, here we can check the important parameters of the project. Regarding the number of Protocols active on the chain, ARB has 361 projects and OP is 141 projects respectively (ARB is more than X2 OP). Next is the Active Users parameter (the number of wallets that have interacted on the network) on Arb is 178k and OP has 143k Users (Arb is still better) in the next 3 columns we can also check the % change TVL of projects in timelines. * TVL and Stablecoins on Arb are: 1.99B$ and 1.82B$ respectively, and OP is: 772M$ and 622M$ respectively (most of the cash flows on these 2 chains are Stablecoins) => from that infer the information If the basic numbers on the Arb network are showing up compared to OP, a valuation of X2 times OP is reasonable. * Coming to the important part, are Arb and OP being bullied? Let’s come to the 4th FIGURE this is the TPS parameter of Layer 2 projects (https://l2beat.com/scaling/activity)(https://l.facebook.com/l.php?u=https %3A%2F%2Fl2beat.com%2Fscaling%2Factivity%3Ffbclid%3DIwAR31jUunby33X4YnFIU_h346AnVeUXdSqITEnNI5g3Sp8qlLc3ufq7vOgXw&h=AT0zXic2qfvpHUVEVIKFegF25BjjopHUVVLKFegF25Bjjop bUunSAKa8-iGpsNizT13nxKCCOBn-GBsZGEL546hWEtSKkFAzNCWIC01uSlvfqxVHIxgXibz7Z6xN640W64Oew9LRtsOz8qM8qDQLx_XaDrrqlYQ7dvoEUIV2ZBM7ThpPHR5OMe q7pMLfhBD3_KQFSPDl4AMA&__tn__=-UK-R&c(0)=AT33a_7GCXQOGbKz8-HQnmS_UlhIfSHlNXkIApcm3-2FvWXJO6QK84hJxpzjZne4vu6CXOQX-GAxbJdTRxU 9_3wvxranqkAHZMjUx7xIExhF_4WmqSg6xvMVyfot7hY7unYGl4lQ) * We all know the strengths of Layer 2 is transaction speed but looking back at the average TPS per day, Layer 2 is even lower than Ethereum. All-time high TPS, Arb is also only slightly above Ethereum 31.64/S vs 22.37/S. As for TPS with other L1s like Solana which is 4k2/S, the challenge of Layer 2 is still quite big. Currently, Arb’s FDV is even higher than Solana at 9.3B compared to 8B while Solana is an ecosystem that has built products for a long time with its success in the previous Bull Run season. The product is smooth (sometimes crashing) TPS is superior, Layer 1 is full of Defi pieces, the community is as large as an army… * Summarizing with Arb’s 9.3B $ valuation, the Can you answer the question if Arb is overvalued? After answering this question, you will also be able to answer the same question as OP. Above are my experiences on how to value a project and I have also analyzed for you the current valuation of the top Layer 2 like ARB and OP. In my personal opinion a newly launched Layer 2 has a higher valuation than one of the leading L1s on the market, this valuation is very high in my opinion a reasonable valuation at the moment for Arb is 6B and OP is 3B with the current fomo of the community, it takes some big enough FUD news for the L2s to return to their true value.
Source: Collector
