REV and F/R Multipliers: A New Perspective on Public Chain Valuation

REV is an indicator that measures the total fees users incur on the public blockchain, similar to corporate revenue. It includes transaction fees within the protocol, tips outside the protocol, and MEV.

The calculation formula for REV is: REV = Total fees within the protocol + Total tips outside the protocol + Total MEV

Recent features of REV:

• ETH dominated from 2020 to 2023
• SOL will start to lead in 2024
• The REV of TRON is also impressive and continuously growing.

Advantages of REV:

• Harder to manipulate
• Reflect retail investor activity

Disadvantages of REV:

• Has lag
• Cannot fully reflect the overall picture of the public chain
• There is still a possibility of being manipulated
• There is a deviation
• Some public chains may be relatively small

The F/R multiple is the ratio of FDV to REV, similar to the price-to-earnings ratio. The larger the F/R multiple, the greater the potential valuation bubble and the more optimistic the market expectations. The F/R multiple reflects the premium that the market is willing to pay for each unit of revenue.

The difference between MEV and REV:

• MEV is a micro indicator that measures network health and value distribution.
• REV is a macro indicator that focuses on the overall revenue premium of public chains.
• Can monitor ecosystem health by combining MEV/REV ratio.

Conclusion:

1. REV does not equal the value capture of the native token.
2. There are differences in the F/R multiples of different public chains.
3. Blockchain is not a company, tokens are not equity
4. Maximizing the long-term effects of REV is worth discussing.
5. REV can be combined with other indicators to build a comprehensive observation system.