REV and F/R Multipliers: A New Approach to Valuing Public Chains

REV( real economic value) is an indicator that measures the total fees paid by users to the public chain, similar to a company's revenue. REV includes on-chain transaction fees, off-chain tips, and MEV.

There is currently debate over whether REV should be maximized:

• REV supporters believe it can help reduce network marginal costs, expand the user base, and achieve sustainable growth.
• REV opponents believe this is a poor long-term value indicator, which will soar during speculative bubbles and is not applicable to blockchains where REV is close to zero.

Recent Features:

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

The main feature of REV is the significant increase in the weight of non-user-end revenue factors. For example, Solana's MEV has significantly enhanced its REV, thereby increasing the potential valuation space.

Advantages of REV:

• Difficult to manipulate
• Can reflect the historical activity of retail investors

Disadvantages:

• There is a lag.
• Cannot fully reflect the overall picture of public chains
• There is still a possibility of being manipulated.
• There may be deviations in certain cases.
• Chains with immature MEV infrastructure may be unfair.

The F/R multiplier is the ratio of FDV to REV, similar to the price-to-earnings ratio, reflecting the premium level of the market's valuation of the project. The larger the multiplier, the larger the potential bubble and the more optimistic the market expectations. The circulating market value can also be used to replace FDV to construct the M/R multiplier, which is more suitable for short-term valuation.

The difference between REV and MEV:

• MEV is a micro indicator that measures network health and value distribution.
• REV is more macro, focusing on the overall revenue premium of public chains.
• Can monitor ecological health with the MEV/REV ratio.

Conclusion:

1. REV is not equal to the value capture of the on-chain token.
2. The F/R ratio varies between different chains.
3. Blockchain is not a company, and tokens are not equity.
4. Maximizing the long-term value of REV is still controversial.
5. REV can be combined with other indicators to build a comprehensive observation system.

Reasonable use of these combined indicators can provide a more comprehensive reference for evaluating public chains.