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Onchain Economics
Valuation

Earnings Quality

Assessment of how sustainable, recurring, and manipulation-resistant a protocol's reported revenue is.

In-Depth Explanation

High-quality earnings are: recurring (not one-time), organic (not self-dealing or wash trading), and sustainable (not dependent on unsustainable incentives). Low-quality earnings inflate metrics temporarily. Always dig into revenue sources—not all protocol revenue is created equal.

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Protocol Earnings Quality

Related Terms

Protocol Revenue

Fees collected by a protocol that accrue to the protocol itself or its tokenholders, rather than to liquidity providers or other participants.

Sustainable Yield

Yield that can be maintained long-term because it's backed by real economic activity, not temporary subsidies.

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Market Capitalization

Market Cap

The total value of a token's circulating supply, calculated as price × circulating supply.

Fully Diluted Valuation

FDV

The theoretical market cap if all tokens (including locked, unvested, and unissued) were in circulation.

Price to Sales Ratio

P/S

Valuation metric comparing market cap (or FDV) to annualized revenue.

Price to Fees Ratio

P/F

Valuation metric comparing market cap (or FDV) to total fees generated, regardless of fee distribution.

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