Meme Insider
In the ever-volatile world of cryptocurrency, where prices often swing based on hype and speculation, Simon Kim, CEO and Managing Partner at Hashed, is pushing for a more grounded approach. In a recent tweet, Kim shared his latest project: a comprehensive dashboard designed to evaluate Ethereum's (ETH) intrinsic value using eight different models. This tool, available at ethval.com, aims to shift the conversation from mere price guessing to fundamental analysis—something the crypto industry desperately needs.
Kim's dashboard isn't just a fancy spreadsheet; it's a thoughtful compilation of valuation methods borrowed from traditional finance and adapted for the unique aspects of blockchain. At the time of the tweet, the composite fair value sat at around $4,723, suggesting ETH was undervalued by about 56% compared to its market price of $3,022. That's a hefty upside potential that could excite any investor looking beyond the memes and moonshots.
Let's break down what makes this dashboard tick. It starts with real-time market data, like ETH's current price, market cap ($365 billion), and 24-hour volume ($22.5 billion). But the real meat is in the on-chain metrics—think total value locked (TVL) at $68.9 billion, staked ETH amounting to 32 million tokens, and daily transactions across Ethereum and its Layer 2 solutions hitting 12.1 million. These numbers paint a picture of a bustling network that's far more than just a speculative asset.
The heart of the dashboard lies in its eight valuation models, each with its own reliability rating and assumptions. Here's a quick rundown to help you grasp how they work without getting lost in the jargon:
TVL Multiple (Medium Reliability): This one multiplies the TVL by 7 and divides by the ETH supply, landing at $3,998—implying a 32% undervaluation. TVL represents the total assets locked in DeFi protocols on Ethereum, but it can be inflated by things like leverage.
Staking Scarcity (Low Reliability): Factoring in how staking locks up supply, this model uses a square root formula to suggest $3,525, or 17% undervalued. It's a crypto-native take, emphasizing how Proof-of-Stake reduces available ETH.
MC/TVL Fair Value (High Reliability): Aiming for a historical average ratio of 6x market cap to TVL, it values ETH at $3,423, pretty close to fair value. This is great for comparing Ethereum to other chains.
Metcalfe's Law (High Reliability): Based on the idea that a network's value grows with the square of its users (here proxied by TVL), this optimistic model pegs ETH at $9,483—a whopping 214% undervalued.
DCF (Staking) (Medium Reliability): Treating staking rewards like perpetual cash flows, discounted at 10% with 3% growth, it arrives at $9,067 (200% undervalued). DCF stands for Discounted Cash Flow, a staple in traditional investing.
L2 Ecosystem (Low Reliability): Giving extra weight to Layer 2 TVL (like Arbitrum or Optimism), this values ETH at $4,603 (52% undervalued), highlighting Ethereum's scaling solutions.
P/E Ratio (25x) (High Reliability): Viewing transaction fees as "earnings," multiplied by 25 (like growth stocks), it suggests $899—indicating overvaluation by 70%. P/E is Price-to-Earnings, adapted here for network fees.
Revenue Yield (High Reliability): Treating ETH like a bond with a 2.5% yield target, based on annual revenue, it comes in at $1,439 (52% overvalued).
The composite weighs these (higher reliability gets more say) to that $4,723 fair value, with five "buy" signals out of eight. Kim openly admits it's not perfect—models have assumptions, like growth rates or multiples, that could shift with market changes. He's inviting feedback, which shows a collaborative spirit in an often cutthroat space.
For those in the meme token world, this matters because Ethereum is the backbone for countless memes and DeFi plays. A stronger, fairly valued ETH could mean more stable launches, better liquidity, and fewer rug pulls. If you're building or trading on Ethereum, tools like this help you see the forest for the trees, beyond the latest pump.
Kim's initiative at ethval.com is a breath of fresh air, reminding us that crypto's future lies in fundamentals, not just FOMO. If this sparks your interest, head over, tinker with the models, and maybe even share your thoughts in the thread. Who knows? It might just change how we all think about ETH's worth.
