CRYPTO PROTOCOLS EARNINGS & REVENUES
Earnings & revenues of different dApp & Blockchains in the Cryptoverse
What are dApp & Blockchain Earnings?
This chart shows the Top dApps (Decentralized Applications) & Blockchain protocols based on daily cumulative earnings. There is an option to toggle between 7D, 30D, 90D, 180D, 365D & historical all-time data
Earnings are calculated by taking the revenue minus token incentives.
The revenue is the share of fees that goes to the protocol’s treasury or directly to its tokenholders through e.g. a burn mechanism. The burn mechanism is similar to a stock buyback because it decreases the amount of tokens in circulation.
The token incentives refers to the token distribution within cryptocurrencies has come to be known as token economics, or, tokenomics for short. Depending on the token it may have a deflationary token model. In this model, there is a set number of tokens to be created, with that limit never being adjusted upward. Or it may follow and inflationary token model. An inflationary token will continuously be printed over time (provided to miners or stakers), with no capped limit of tokens that can ever be created.
How to use dApp & Blockchain Earnings?
This can be used to see which protocols are on course to become sound businesses and generating positive earnings.
Emitting tokens is of course an inherently unsustainable strategy. Money is not infinite, and liquidity mining programs are highly reflexive, losing their potency and effectiveness the longer they persist due to the perpetual sell-pressure they place on the token being emitted. Furthermore, the sell-pressure from token emissions often robs a protocol of the ability to capitalize itself, since DAO treasuries are often denominated in a protocol’s native token.
Every business has to produce profits eventually. The next era of Crypto will see winners in which protocols earnings flip from red to green, where their earnings outweigh their cost
DeFi Revenue by dApp Protocol
DeFi protocols’ revenues show amounts of money protocols generated for its users and token holders. This chart shows the annualized revenue of each protocol. We use the last 30 days to annualize. Revenues collected on Ethereum, Polygon, Avalanche, Arbitrum and Fantom are incorporated. The revenues are multiplied by a distribution coefficient to estimate the revenues accrued by the supply-side versus by the protocol.
Note revenues will be higher than earnings as they do not take into account the cost of token emissions as earnings do, however they do help show the potential of a given protocol.
How to use DeFi Revenue
Supply side revenue is revenue for liquidity providers on the DeFi platform and shows which DeFi project is used the most.
Protocol revenue is revenue for the protocol and thus the token holders.
At present most fees go to the supply side & little is accrued to the protocol, there is speculation DeFi DAOs turn on the “fee-switch” in which the DAO could earn between 10-25% of LP fees for the pools in which it is turned on.
It is unclear what impact the fee switch would have on the protocols liquidity, as cutting into fees for liquidity providers could cause them to migrate to other platforms. This could worsen trade execution and therefore decrease volumes in the fiercely competitive DEX sector.
Defi MarketCap/Annualised Revenue Ratio
MarketCap/Revenue ratio compares DeFi protocols’ token marketcaps to its revenues. Annualized revenue is calculated based on the last month. Revenues collected on Ethereum, Polygon, Avalanche, Arbitrum and Fantom are incorporated.
How to use the Defi MarketCap/Annualised Revenue Ratio
This ratio factors in a protocol’s token price relative to its revenue to value companies and help determine whether they are overvalued or undervalued. It is essentially the same as the PS Ratio in stocks
PS ratio = Market cap/12 months sales (revenue)
Valuing a PS ratio – look at PS ratio compared to other tokens in DeFi.
The lower the ratio – token may be undervalued
The higher the ratio – token may be overpriced