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Valuation Metrics

Definition

Valuation metrics are numerical assessments employed to determine the economic value or capability of an asset or entity. For digital assets, these measures extend beyond conventional financial ratios to incorporate on-chain information, network operations, and developer involvement. Instances include market capitalization, fully diluted valuation, transaction volume, active user addresses, and total value secured in decentralized finance systems. These instruments aid investors and analysts in forming well-informed decisions about an asset’s proper value and future possibilities.