Question 1

What is a crypto P/E ratio?

Accepted Answer

A crypto P/E (price-to-earnings) ratio measures a protocol's fully diluted valuation (FDV) divided by its annualized on-chain revenue. It helps investors assess whether a token is overvalued or undervalued relative to its earnings, similar to traditional stock P/E ratios.

Question 2

How is on-chain protocol revenue calculated?

Accepted Answer

On-chain protocol revenue is calculated using fee data from DefiLlama and Dune Analytics. The 30-day total fees are annualized (multiplied by 12) to estimate yearly revenue. This includes transaction fees, trading fees, and other protocol-generated income recorded on-chain.

Question 3

What is a good P/E ratio for a crypto protocol?

Accepted Answer

A P/E ratio below 10x is generally considered undervalued for crypto protocols. Between 10-30x is considered fair to growth-stage pricing. Above 30x indicates premium or speculative valuation. Currently, the lowest P/E tracked is 1.0x (Meteora) and the average across 5 protocols is 20.9x.

Question 4

Which crypto protocols have the lowest P/E ratio?

Accepted Answer

The protocols with the lowest P/E ratios are: Meteora (1.0x), Pump Fun (1.6x), Collaterize (3.4x). Lower P/E ratios may indicate undervaluation relative to revenue generated.