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Curve Finance is the most important and overlooked protocol in DeFi. It's not easy to understand. Many users of lending platforms or DEX aggregators indirectly use @CurveFinance without even realizing.
What do $CRV valuations looks like? How about vs. $UNI and $SUSHI?
1/ https://twitter.com/AndreCronjeTech/status/1297104678421962754
What do $CRV valuations looks like? How about vs. $UNI and $SUSHI?
1/ https://twitter.com/AndreCronjeTech/status/1297104678421962754
How is Curve different from other AMMs? @Uniswap and @SushiSwap enable token swaps, but Curve enables low slippage trades between price-stable assets in the same pool.
This helps arb traders and stablecoins maintain their correct peg.
2/
This helps arb traders and stablecoins maintain their correct peg.
2/
Curve has 35 different liquidity pools, each offering different returns to liquidity providers. When LPs deposit their tokens, they can receive 'dividends' as Curve charges traders 0.04% for each swap.
Take a look at our model for their fee generation
3/
https://messari.io/article/valuation-of-curve-finance-the-most-overlooked-protocol
Take a look at our model for their fee generation
3/
https://messari.io/article/valuation-of-curve-finance-the-most-overlooked-protocol
So growth needs to compensate for this. Growth has been erratic and trending about +30% compounded monthly.
In the model, we quickly bring the forecasted monthly compounding growth rate from 30% to 2%.
5/12
In the model, we quickly bring the forecasted monthly compounding growth rate from 30% to 2%.
5/12
We look at global traditional finance and crypto-native companies as a set of comparables for CRV.
@CurveFinance is not only comparable to exchanges, but also to brokerage and banks
6/12
@CurveFinance is not only comparable to exchanges, but also to brokerage and banks
6/12
We value CRV using Price to Sales (P/S) multiples, P/S-to-Growth and Dividend Yield comparables. In our valuation, we apply bull, base, and bear cases to get a range of valuations.
You can edit the model to your own assumptions
7/12
https://messari.io/article/valuation-of-curve-finance-the-most-overlooked-protocol
You can edit the model to your own assumptions
7/12
https://messari.io/article/valuation-of-curve-finance-the-most-overlooked-protocol
How does $CRV compare to its DeFi peers though?
The chart below shows that CRV is trading at the highest P/S ratio but within the range of $UNI and $SUSHI for dividend yields:
8/12
The chart below shows that CRV is trading at the highest P/S ratio but within the range of $UNI and $SUSHI for dividend yields:
8/12
Why might $CRV trade at a premium to DeFi peers? It has one of the most loyal community, strongest network effects and high transparency with good availability to data.
$CRV holders also benefit from air drops like STAX and Ellipsis
9/12
$CRV holders also benefit from air drops like STAX and Ellipsis
9/12
What are the risks to valuations?
$CRV has high inflation and competition from @Uniswap V3. Voting seems to also be controlled by the team and @iearnfinance.
10/12
$CRV has high inflation and competition from @Uniswap V3. Voting seems to also be controlled by the team and @iearnfinance.
10/12
Curve is a fundamental building block in the DeFi ecosystem. While it doesn’t receive much recognition, it powers many of the largest platforms with liquidity on the back-end.
CRV has strong potential due to increased attention to the importance of stablecoins.
11/12
CRV has strong potential due to increased attention to the importance of stablecoins.
11/12
Read an indepth overview here and edit the model to your assumptions
12/12 https://messari.io/article/valuation-of-curve-finance-the-most-overlooked-protocol
12/12 https://messari.io/article/valuation-of-curve-finance-the-most-overlooked-protocol
