I truly believe that the valuation of crypto assets is full of misconceptions.

A common pattern is the judgment that "annual fees are $500 million, which is five times the market cap, so it's cheap."
But both the numerator and denominator are wrong.
Considering the actual income that ends up in your pocket, that multiple could be as high as 20 times.

This cannot be solved by traditional financial metrics like the PER (Price-to-Earnings Ratio).
That's why the enterprise value multiple (EV/EBITDA) was created.
But in the case of tokens, it doesn't work straightforwardly.
Most assets on the balance sheet lack legal claims, and most of the revenue generated by protocols doesn't reach the holders.

The reason early Bitcoin buyers could increase their assets was because the revenue structure was clear.
But today's protocols are complex.
That's why an accurate valuation framework is necessary.

The core metric is "Enterprise Value / Holder Income."
This isn't simply "market cap divided by fees," but shows how much you're actually paying per dollar of final income you receive.
To calculate enterprise value, add token debt to the market cap and subtract the treasury assets that can be withdrawn.
This is crucial—it's not about what's in the treasury, but whether holders can actually withdraw it.

Some well-known protocols hold $700 million in stablecoins but lack governance mechanisms, and holders can't withdraw anything.
In this case, withdrawable assets are zero.
The enterprise value equals the market cap.
On the other hand, for active DAOs with a history of distributions, a 25% discount is applied to treasury assets.

Next, understanding the difference between "Holder Income" and "Protocol Income" is really important.
When considering the fees generated by protocols as a "three-tier waterfall,"
first, there's the total fees paid by users.
From that, subtract LP fees and validator rewards to get protocol income.
Finally, the portion that reaches holders through buybacks and distributions is holder income.
Some protocols have a large gap between these, others have a small one.

One protocol might have 90% of fees reaching holders, while another only 3%.
Comparing both using "EV / Protocol Income" results in a huge difference.
Therefore, the denominator must always be "Holder Income."

The term "dilution" is also misused in the industry.
Team incentives are operating costs and should be included in valuation multiples.
New tokens entering the market are essentially like salaries.
Meanwhile, investor lock-up releases and sales are market events, not operating costs.
Early Bitcoin buyers also considered such dilution pressures when making investment decisions.

Practically, you should look at the following indicators:
Enterprise value / Holder Income (core metric),
the multiple adjusted for costs,
and the total token holder tax (token costs + investor selling pressure divided by holder income).
This last metric shows how much new supply is pushed into the market for every dollar of income a holder earns.

Looking at real examples, one major protocol appears to be the cheapest at a surface level with a 2.4x multiple, but it can't withdraw from the treasury, and a large token unlock is scheduled for August 2026.
After cost adjustments, the multiple rises to 4.2x, and the total token holder tax exceeds 60%.
Another protocol has the maximum cumulative discount, with a 14.5x multiple based on protocol revenue, but a 57.7x multiple based on holder income.
The choice of denominator greatly influences valuation.

This framework isn't perfect.
The discount rate for treasury claims is subjective, and data sources can be noisy.
But using the "EV / Holder Income" approach allows us to accurately measure the gap between protocol-generated revenue and what holders actually receive.
This is currently the biggest fundamental mismatch in the market.

The industry is also starting to change.
Fee switches are turning on, buybacks are replacing inflation staking, and governance votes determine incentive halts.
The transparency of value creation that early Bitcoin buyers saw is now demanded of current protocols.
Having tools to measure this precisely will be key to future investment decisions.