Will the bull market return soon? A brief analysis of the six cash cows that may outperform the market
Analysis of Six Cash Cows That Could Outperform the Market
Author: Thor Hartvigsen, Crypto KOL
Translation: Felix, LianGuaiNews
Bull market is here? With the maturity of cryptocurrencies and the increasing interest of institutions in cryptocurrencies, the fundamentals of projects will become increasingly important. Protocols with high revenue, large market demand, and positive returns may outperform the market in the longer term. This article lists the six DeFi cash cows by crypto KOL Thor Hartvigsen.
LianGuaiNews Disclaimer: This article is not investment or trading strategy advice, DYOR.
- Account Abstraction Simplify Your Crypto World
- The Innovation of Cryptocurrency Zhao Changpeng, a Pioneer of the E...
- Is ‘Cosmos’ the ultimate form of Layer2?
MakerDAO
Annual revenue: $166.2 million
MKR FDV (Fully Diluted Valuation): $1.05 billion
Maker earns money from fees on collateral supporting DAI.
55% of revenue comes from RWA collateral, such as U.S. Treasury bonds. The rest comes from fees on on-chain collateral like stETH, ETH, and wBTC.
Maker currently uses most of its revenue to fund the DAI Savings Rate (DSR) treasury. The goal is to increase DAI supply. More DAI supply means more collateral, which also means generating more revenue.
Maker has ambitious plans for the future, including a complete rebranding of MKR and DAI (Endgame plan).
Related reading: A detailed explanation of MakerDAO’s Endgame plan, incorporating AI-assisted governance and deploying new chains
Rollbit
Annual revenue: $364 million
RLB FDV: $607 million
Rollbit, a gambling platform on the Solana blockchain, earns significant revenue from its casino, sportsbook, and cryptocurrency futures trading. Part of the revenue will be used to buy and burn RLB:
- 30% futures (1000x contracts)
- 20% sportsbook
- 10% casino
Considering the current revenue, 55 million worth of RLB is burned annually. Based on these prices, it is 9% of the circulating supply. In the case of higher prices, the structural impact on supply is small, but narratives centered solely around this point may lead to another rally.
Related reading: Insights from the gambling industry: From GGR to NGR, the attractiveness rules of crypto games?
Ethereum
Annual revenue: $2.1 billion
ETH FDV: $197 billion
Ethereum is the largest revenue-generating on-chain entity in the crypto space (excluding centralized companies like Tether) and the only blockchain with positive revenue that exceeds token incentives.
The revenue of Ethereum is the amount of ETH burned per transaction. Based on the current annualized revenue, it consumes ETH worth $2.1 billion per year.
GMX
Annual Revenue: $39.4 million
GMX FDV: $507 million
The revenue is calculated based on the fees paid to GMX investors. Recently, GMX has lost market share to competitors such as Synthetix, Level, and Vertex, as many of them have superior features compared to GMX V1.
The recently launched V2 has made various upgrades to the trading experience, including lower fees and more assets.
Due to the balance of open positions and isolated markets, LPs face reduced risks.
Related reading: Reviewing the development trajectory of GMX V1 and analyzing the changes and impacts of V2
Arbitrum
Annual Revenue: $62.3 million
ARB FDV: $9.56 billion
Arbitrum is the second-largest revenue-generating blockchain after Ethereum (higher than BNB Chain, Polygon, etc.). In terms of liquidity and dapps being built, Arbitrum still has the largest L2 ecosystem.
From a technical perspective, Arbitrum also excels in decentralization. Compared to Arbitrum, Optimism and OP Chains have not yet enabled fraud proofs. The recently announced Arbitrum Bold further supports permissionless state verification.
Related reading: Analyzing the BOLD verification protocol: How to make Arbitrum more decentralized?
dYdX
Annual Revenue: $83.2 million
DYDX FDV: $2.13 billion
dYdX provides the closest on-chain trading experience to CEX in terms of UI/UX and transaction fees.
V4 is planned to be released in late September, when dYdX will launch on its own Cosmos chain. With more traders moving to on-chain and trading volume rebounding in a potential bull market, top Perp DEXs like dYdX have significant upside potential.
Once V4 goes live, DYDX may further increase revenue, meaning that a significant portion of the revenue generated by dYdX will flow to DYDX stakers.
The table below compares the above content and provides valuation based on revenue. As shown in the figure, the price/revenue valuation of MKR and RLB is quite crazy. The author reminds that all of the above does not constitute investment advice.
