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Onchain Economics
Valuation

Runway

The length of time a protocol can continue operating given its treasury balance and burn rate.

In-Depth Explanation

Runway = Treasury Value / Monthly Expenses. A protocol with $10M treasury spending $500K/month has 20 months of runway. Runway analysis considers: treasury composition (stablecoins vs volatile tokens), expense sources (team, grants, incentives), and revenue trajectory. Short runway creates urgency; long runway enables patient building. Bear markets test runway assumptions.

Related Terms

Treasury

Protocol-owned assets held in smart contracts, typically controlled by governance for funding development and operations.

Burn Rate

The rate at which a protocol spends its treasury or resources over time.

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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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