Overview of DeFi Market Development and Analysis of Evaluation Indicators

The DeFi market has shown a vigorous development trend in recent years, with its application scope expanding to multiple public chains and Layer 2 networks. Currently, the DeFi ecosystem mainly includes decentralized exchanges (DEX), lending platforms, staking services, derivatives trading, and diversified application scenarios such as cross-chain bridges. With continuous technological advancements, new DApps are constantly emerging, dedicated to optimizing user experience and driving the entire industry forward.

In the DeFi ecosystem, DEX, staking, and lending services are the most mature and clearly demanded application scenarios. Whenever a new blockchain ecosystem emerges, these three types of DeFi protocols are often the first to be deployed and adopted. This phenomenon reflects the ongoing demand for basic DeFi services in the market.

For investors and developers, DeFi projects in emerging ecosystems may contain potential opportunities. In particular, DeFi projects deployed on some alternative Layer 1 public chains or Layer 2 scaling solutions may attract users due to lower network congestion and fees, thereby gaining opportunities for rapid growth.

When evaluating DeFi protocols, the following key indicators can be considered:

1. Total Locked Value ( TVL ): Reflects the scale of funds attracted by the protocol.
2. User Count: Measure the level of adoption of the protocol.
3. Transaction Volume: Displays the activity level of the protocol.
4. Protocol Revenue: Indicates the profitability of the project.
5. Market Cap ( MV ): Reflects the market's overall valuation of the project.
6. Fully Diluted Valuation ( FDV ): Consider the long-term valuation of all potential token supply.
7. MV/TVL Ratio: Assessing the Reasonableness of Project Valuation Relative to Locked Funds
8. Price to Sales Ratio ( P/S ): A measure of valuation relative to revenue levels.
9. Price-to-Earnings Ratio ( P/E ): Reflects the multiple of valuation relative to earnings.
10. Innovation: Assessing the uniqueness of the project in terms of technology or business model.

By taking these indicators into comprehensive consideration, investors and analysts can more thoroughly assess the value and potential of DeFi protocols. However, it is important to note that the cryptocurrency market is highly volatile, and investment decisions should also integrate various factors such as market trends, team background, and technological strength for a comprehensive judgment.