REV and F/R Multipliers: A New Method for Valuing Public Blockchains

The real economic value of REV( is an indicator that measures the total fees paid by users to the public chain, similar to corporate revenue. It includes on-chain transaction fees, off-chain tips, and MEV.

Currently, there are two viewpoints on REV:

1. Maximizing REV can reduce the marginal cost of the network, expand the user base, and achieve sustainable growth.

2. REV is a poor long-term value indicator and should be minimized to reduce negative economic impacts.

Recent characteristics:

• ETH dominated in REV from 2020 to 2023, starting in 2024 SOL takes the lead.
• The REV of TRON is also impressive and continuously growing.
• The MEV of SOL has significantly enhanced its REV, increasing the potential valuation space.

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Advantages of REV:

• Difficult to manipulate
• Can reflect retail investor activity level

Disadvantages:

• There is a lag.
• Cannot be used in isolation
• There is a possibility of being manipulated
• There may be deviations in certain cases
• Unfavorable for chains with immature MEV infrastructure

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The F/R multiplier is the ratio of FDV to REV, similar to the price-to-earnings ratio:

• The larger the multiplier, the more likely there is a valuation bubble.
• The smaller the multiplier, the more reasonable the valuation may be.

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Difference from MEV:

• MEV is a micro indicator that measures the health of the network.
• REV is a macro indicator that focuses on overall income premium.
• The MEV/REV ratio can be used to monitor ecosystem health.

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Conclusion:

1. REV does not equal the value capture of the native token.
2. The FDV/REV ratio has inherent differences across different chains.
3. Blockchain is not a company, and tokens are not equity
4. Maximizing the long-term value of REV is worth discussing.
5. REV can be combined with other indicators to build a comprehensive observation system.

Reasonably and flexibly using these combined indicators can provide a relatively comprehensive assessment of public chains.

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