《Is ETH overvalued?》

During this period, the community has been talking about Eth going badly.

But few people have recalculated whether ETH's valuation is reasonable based on the current fundamentals.

The value of ETH can be roughly determined by five parts:

1. Gas income. Currently, the annual gas income is 548M per year. If PS is calculated, it is 500. Analogously, the PS of Sol is 300. So ETH is seriously overvalued.

2. The current annual destruction value is 400M per year.

3. The annual additional issuance is 2220M per year.

4. After joining ETF, ETH has certain commodity attributes and a certain market value.

5. ETH's ecological moat. That is, layer2, defi, and the most powerful dev in the crypto circle.

Let's take a look at the analysis:

1. The current low gas income is mainly caused by layer2 almost not paying gas fees. What is layer2? It is a cunning and efficient way to use block space; Jiao鋶隇: xntm566 is eth's initiative to reduce its own income, but increase the ecological moat.

On the surface, PS is very ugly. But this is actually eth's choice to sell block space cheaply by sacrificing short-term interests and giving 80% discount for the sake of ecological moat.

From the internal perspective of the foundation, this choice is more advantageous than maintaining low PS. Therefore, the real profitability of ETH is far from being reflected in PS. From the perspective of mc/volume, ETH does not have a premium over Visa.

2. Whether it is the cost of additional issuance or the income from destruction, it does not affect the overall interests of the holders who hold the currency as a whole.

Therefore, destruction and additional issuance do not have a significant impact on ETH's valuation.

3. How much is the ecological moat worth?

Considering it together with PS, it means that ETH's concessions can withstand higher PS. The ecological moat is the most complete and is the best target for selling block space.

4. At this time, ETH is far from looking overvalued. But there is still a certain degree of overvaluation.

The market expects that on-chain activities can increase by 2-3 times to break even in terms of cash flow. The market also has the risk of losing patience. However, historically, once the market picks up, on-chain activities can increase by 10 times or even dozens of times in a short period of time. In the future, ETH can take over the interest rate cuts and balance sheet expansion. It is reasonable that ETH has some premium at this time.

Conclusion:

The price of ETH at this time is moderate, and there is no obvious overvaluation, but it is not very cost-effective at this moment.