According to Ki Juvenile Ju, market analyst and CEO of cryptocurrency market intelligence platform CryptoQuant, the Ethereum network’s native token, Ether (ETH), is undervalued in nine of 12 commonly used valuation models.
A composite “fair value” using all 12 valuation models values ETH at approximately $4,836, an augment of over 58% from its price at the time of writing.
Each pricing model was rated on a three-level credibility scale, with three being the most credible. Eight of the 12 models have a reliability rating of at least two. “These models were built by trusted experts from academia and traditional finance,” Ju he said.
App Capital’s valuation model, which takes into account total on-chain assets including stablecoins, ERC-20 tokens, non-fungible tokens (NFTs), real-world tokenized assets (RWAs), and bridge assets, values ETH at a fair value of $4,918. ETHwart.
Using Metcalfe’s law, which states that the value of a network increases in proportion to the square of the actually dynamic users or the number of nodes in the network, the price of ETH is estimated to be $9,484, which means that according to the model, the asset is undervalued by over 211%.
The ETH valuation using the Layer 2 (L2) platform, which takes into account the total value locked (TVL) in Ethereum’s Layer 2 scaling network ecosystem, predicts a price of $4,633 per ETH, which means ETH is approximately 52% undervalued.
The Ethereum community and analysts continue to debate how to properly value the world’s first intelligent contract platform, with many arguing that established valuation models are insufficient to value nascent digital assets and decentralized blockchain networks.
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Despite the mostly rosy outlook, one valuation model says ETH is grossly overvalued
The Revenue Yield valuation model, in which ETH is valued based on the annual revenue generated by the network divided by the profitability of staking ETH, says that ETH is overvalued by over 57% at current prices above $3,000.
Revenue Yield is the most reliable valuation model enabling true valuation of ETH, in line with ETHval criteria and methodology.
According to the model, the price of ETH should be around $1,296, highlighting failing revenues for the Ethereum network as fees reach record lows and rival networks eat up some of its market share.
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