Eclipseum - The Lowest (Price / Sales) Ratio in DeFi?
Price / Sales Ratio Metric
The Price / Sales (P/S) ratio is a metric traditionally utilized for valuation of stocks to determine whether the asset is overvalued or undervalued. The P/S ratio is calculated by dividing the asset market cap by annualized sales.
DeFi protocols can be analyzed using this ratio, where the “sales” is the value the protocol generates via transaction fees or other means. Analyzing DeFi protocols using P/S ratios has been recently popularized by tokenterminal.com, and the Bankless Token Report.
A lower P/S ratio indicates that the protocol’s earning are large relative to its market cap. So a low P/S ratio can be interpreted as an asset being undervalued, and that it may have strong upside potential.
Eclipseum P/S Ratio
Over the last 7 days, the Eclipseum ECL pool received 1,534.8 ETH in transaction volume, and the Eclipseum DAI pool received 278.6 ETH in transaction volume.
Using the current ETH price of $600.00, this translates to $1,088,063.00 in transaction volume over the last week. Multiplying this value by the Eclipseum transaction fee percentage of 0.3%, and converting to an annualized value, we arrive at a value of annualized fees generated of $170,200.
At the time of writing, Eclipseum has a market cap of $798,000. Using this the Eclipseum P/S ratio can be calculated as shown below.
This P/S ratio of 4.69 can be compared to the values seen at tokenterminal.com. These P/S values are shown below in the column furthest to the right, sorted in descending order.
So it can be seen that according to the current data, Eclipseum‘s P/S ratio of 4.69 is quite low compared to current popular DeFi protocols. This indicates that there is significant value being generated for the holders of the protocol relative to it’s current market cap. While Eclipseum is still very new, and it is unclear whether the P/S ratio will increase or decrease moving forward, it is a positive signal that Eclipseum has signficant growth potential.
If you are interested in learning more, I suggest giving the whitepaper a read, joining the telegram or discord, exploring this data yourself using the historical chart tool, or reaching out to me directly at email@example.com.