The post Are Ethereum DeFi Titans Like Uniswap, Maker, And Lido Are Grossly Undervalued? appeared on BitcoinEthereumNews.com.

Ethereum is the home of decentralized finance (DeFi), looking at the over $100 billion in total value locked (TVL). Even though the figure fluctuates, mainly depending on the performance of ETH, it is clear that DeFi has proven revolutionary, opening up new use cases spanning multiple sectors, including finance and insurance. Are Ethereum DeFi Protocols Undervalued? Taking to X, one analyst is now convinced that a group of established DeFi protocols on Ethereum, including Uniswap and Aave, are highly likely to be grossly undervalued. Ethereum DeFi protocols overvalued | Source: @@JustDeauIt via X To put it in context, DeFiLlama data shows that Uniswap, a decentralized exchange, Aave–a decentralized money market, and Lido Finance–a liquidity staking platform, are among the largest by TVL. The analyst noted that these protocols’ price-to-fees ratio, a metric used to gauge financial health, is unusually high and way better than top traditional finance platforms listed on bourses across the United States. Of the identified, Uniswap has a price-to-fees ratio of 9.6x from the $807 million in fees collected over the past year. However, according to LinkedIn data, the DEX employs roughly 137 people. Meanwhile, Maker, a lending and borrowing platform and the issuer of the algorithmic stablecoin DAI, has a price-to-fee ratio of 6.9X. The protocol generated $252 million in fees last year from a team of roughly 100 employees. The same trend can be seen in Aave and Lido, where their price-to-fees ratio stood at 2.8X and 1.5X, respectively, though their team remains relatively small.   To understand the potential undervaluation of DeFi protocols, the analyst then compared these price-to-fee ratios with TradFi giants. The AI giant Nvidia has a price-to-sales ratio of 40X–higher than Uniswap’s. However, the Wall Street giant employs a larger workforce of approximately 32,000. The same trend can be seen in Robinhood.…

---

Filed under: News - @ June 21, 2024 4:14 am