Current Status of the DeFi Market and Assessment Methods

The DeFi market is experiencing vigorous growth, with its application scope continuously expanding, covering multiple public chains and Layer 2 networks. Currently, various DeFi application scenarios have emerged in the market, including decentralized exchanges (DEX), lending platforms, staking services, derivatives trading, and cross-chain bridges. These applications are continuously innovating, aiming to optimize user experience and attract more participants.

Among all DeFi applications, DEX, staking, and lending services are the three most popular and mature categories. Whenever a new blockchain ecosystem is born, these three types of DeFi protocols are often the first to be developed and deployed, becoming the infrastructure of the ecosystem.

For those looking for investment opportunities, the emerging blockchain ecosystem may hold potential. In particular, DeFi projects running on some alternative Layer 1 public chains or Layer 2 scaling solutions may attract attention due to lower competitive pressure and potential high growth space.

When evaluating DeFi protocols, several key indicators can be considered:

1. Total Value Locked (TVL)
2. Active Users
3. Trading Volume
4. Protocol Revenue
5. Market Value (MV)
6. Fully Diluted Valuation (FDV)
7. Market Capitalization to Total Value Locked Ratio (MV/TVL)
8. Price to Sales Ratio (P/S)
9. Price-to-Earnings Ratio (P/E)
10. Innovation

These indicators can comprehensively reflect the operational status, market recognition, and future potential of a Decentralized Finance protocol. Investors and analysts can use these indicators, combined with the specific circumstances of the project and the market environment, to conduct a more comprehensive and in-depth evaluation of the DeFi protocol.