300 into 2: An Experiment in Valuation of Real Protocol Revenues

A rigorous screening process left only Jupiter and Orca.

Written by: Edgy

Compiled by: Chopper, Foresight News

I am looking for cryptocurrencies with valuation advantages. I set three screening criteria for the top 300 tokens by market capitalization: revenue growth, valuation below industry peers, and token prices that have not yet caught up with fundamental improvements.

In the end, only two projects met all the criteria, both sharing common characteristics; the projects that were filtered out may deserve further investigation. Here are the conclusions from this research.

Screening Criteria Explanation

The goal of this screening is to identify projects that meet all three conditions:

• Lower valuation compared to competitors in the same sector
• Revenue growth outpacing market averages
• Token price has not yet reflected positive fundamentals

Using CoinGecko's prices and DeFiLlama's revenue as benchmarks, I compared data from the past 30 days with the previous 60 days. Then I asked Claude to help me analyze.

A key adjustment was made in this analysis: the ranking is based on the actual retained revenue of the protocol, rather than total fees. Fees are the total costs paid by users, while revenue is the actual profit retained by the protocol.

For example, with Jito: for every $100 in fees generated, the protocol retains only about $6, with the majority distributed as MEV rewards to validators.

If we calculate valuation based on total fees, Jito's price-to-earnings ratio is only 4.5 times, which seems very cost-effective; however, when calculated based on the protocol's actual retained revenue, the valuation skyrockets to 73 times.

Lido also retains only about 6% of fees, while Uniswap retains 8%.

If you simply use fees as a judgment standard, the "undervalued opportunities" you find may not be real.

How 300 Tokens Were Reduced to Only 2

In the first round of initial screening, 38 tokens with valid statistical data were identified:

• Initial sample: 300 tokens
• Of which DeFiLlama has revenue data for: 117 tokens
• Excluding public chain projects and those with too small a scale, 38 projects remain that can retain earnings

Projects like Morpho, Ondo, Celestia, The Graph, and EigenCloud were all excluded. Although these projects generate fees, the earnings do not flow back to the tokens themselves.

Subsequently, three screening thresholds were executed in sequence, comparing each project with the fully diluted valuation (FDV) median of its own sector (trading, lending, staking, and others):

• Valuation below peers → 18 remaining
• Revenue growth higher than sector median → 9 remaining
• Token price increase lagging behind sector median → 3 remaining

Adding pressure tests, we eliminated projects with anomalous revenue spikes in a single day, leaving only 2.

The industry median level shows an average revenue increase of 18%, with an average token price increase of 25%. Projects must have revenue growth exceeding 18% while the token price increase is below 25% to meet the criteria.

The Bias Introduced by Fully Diluted Valuation (FDV)

Using FDV instead of circulating market cap directly eliminated many fundamentally strong projects. Hyperliquid is a typical example: calculated by circulating market cap, the revenue multiple is 28 times; however, using FDV, the valuation reaches 120 times, because the token's circulating supply is only a quarter of the total supply.

This judgment standard may not be fair to HYPE, but this screening uniformly adopts this set of rules.

Results

Cheap valuation, business growth, but prices have fully reflected value.

Pump remains the strongest business model in this screening. With 30 days of revenue at $57 million and a valuation of less than 6 times; revenue increased by 80%, and the token price rose by 61%. The market has fully priced this in, and there are no undervalued opportunities. The market pricing of such tokens is efficient and reasonable.

Low valuation, but the market does not favor it, and the business itself is no longer growing.

In the value trap zone, low prices do not equal undervaluation. Collector Crypt has a revenue multiple of only 2.4 times, the lowest valuation among the top 300 tokens, but its revenue has declined by one-third.

Business growth, low market attention, but valuation is not cheap.

Revenue continues to rise, while token prices stagnate or even decline, which superficially appears to be an excellent investment opportunity. However, in comparison with competitors, their valuations are actually high.

If we only look at fee data, Jito can easily mislead investors: revenue increased by 44%, while the token price fell by 13%, leading to a fee-based valuation of only 4.5 times. It seems like an excellent opportunity, but when converted to actual retained revenue, the valuation reaches 73 times.

Bonk has another issue. After excluding the explosive data from the last three days, 57% of revenue growth directly turned into a negative growth of 17%, indicating that this growth is likely just a short-term pulse effect brought about by the Solana market.

Simultaneously meeting all three conditions.

Aethir failed the revenue stability pressure test, with 65% of its monthly revenue concentrated in a single day spike. The underlying causes have yet to be deeply investigated, but preliminary data suggests a high risk.

Ultimately, only Orca and Jupiter remain, both of which belong to the decentralized exchanges in the Solana ecosystem.

Objective Variables from the Solana Market

It is necessary to objectively state the background: during the month, SOL surged by 42%, and part of the exchange's revenue growth comes from the lagging effect of the Solana bull market, but there are also independent fundamental drivers. Both projects' revenue growth outpaced SOL itself, while their token price increases lagged significantly behind the public chain.

Jupiter's business model is more mature:

• 30 days of revenue at $6.4 million, with a revenue growth rate of 44%
• Fee retention ratio of 34%, demonstrating outstanding profitability quality in this screening sample
• Token price increase of 22%, with the sector median at 25%, barely meeting the "price lag" screening condition by a slight margin

Orca has a lower valuation and a smaller project size:

• Monthly revenue of $700,000, ranked 293rd by market cap
• Revenue doubled, and it was spread throughout the month rather than concentrated in a single night, indicating genuine growth, though the downside is the project's smaller scale.

Meteora is worth mentioning. It missed the growth target by just 0.04 percentage points. Revenue grew by 18.33%, with a target value of 18.37%, and a price-to-earnings ratio of 7.9 times.

The Positioning and Limitations of This Screening List

The content of this article does not constitute any buy recommendations. I will use another complete evaluation system to deeply explore truly undervalued targets, and further research will need to incorporate more dimensions.

This screening selected projects with at least 60 days of revenue records, so tokens from Robinhood Chain, which have a shorter launch time, are not included in the statistics.

The core significance of this list is to filter out crypto projects that have achieved business growth but whose token prices have not yet reflected their potential for upward movement.