How much is Ethereum really worth? Hashed provided 10 methods for valuing ETH.

Hashed offers 10 Ethereum valuation models, 8 of which show that ETH is undervalued. The weighted average reasonable price is over $4,700, which is a significant upside over the current price, but the reliability of the models varies greatly. (Synopsis: Ethereum has negative signals: whales dare not go long, TVL declines, and there is no hope of ETH returning to $4,000 in the short term) (Background added: On Ethereum's “identity crisis”: misread value) What should be a reasonable price for ETH? The market has given a lot of valuation models for this problem. Unlike Bitcoin, a species that already exists as a bulk asset, Ethereum as a smart contract platform should be able to summarize a reasonable and accepted valuation system, but it seems that the Web3 industry has not yet reached a consensus on this matter. A recent Hashed website offers 10 valuation models that are likely to be highly recognized by the market. Calculations in 8 out of 10 models show that Ethereum is undervalued, with a weighted average price of more than $4,700. So how is this reasonable price close to an all-time high calculated? From TVL to Staking to Revenue Hashed lists 10 models that are divided into low, medium, and high reliability categories, let's start with low-reliability valuation models. TVL Multiplier The model believes that Ethereum's valuation should be a multiple of DeFi TVL on it, pegging market cap to TVL alone. Hashed took the average of the ratio of market capitalization to TVL from 2020 to 2023 (personally understood as the time from the beginning of DeFi Summer to the time when matryoshka dolls were not too serious) 7 times, and by multiplying the current DeFi TVL on Ethereum by 7 and dividing it by the supply, that is: TVL × 7 ÷ Supply, the price is $4128.9, which is 36.5% upside from the current price. This crude calculation method that only considers DeFi TVL and cannot accurately derive the actual TVL because of complex matryoshka dolls is indeed worthy of low reliability. Scarcity premium due to staking This model takes into account that Ethereum that cannot be circulated in the market because of staking will increase the “scarcity” of Ethereum, and multiplies the current price of Ethereum by the opening of the ratio of total supply and circulation, that is, the price × √(Supply ÷ Liquid), resulting in a price of 3528.2, which is 16.6% upside over the current price. This model was developed by Hashed himself, and the square calculation is to weaken the extreme cases. But according to this algorithm, ETH is always underestimated, and it is also crude to consider the rationality of the “scarcity” brought by staking and the additional liquidity of Ethereum staked by LST. Mainnet + L2 TVL multiplier is similar to the first valuation model, except that this model adds all the TVL of L2 and because L2 gives 2x the weight of Ethereum's consumption, the calculation method is (TVL + L2_TVL×2) × 6 ÷ Supply, and the resulting price is 4732.5, which is 56.6% upside from the current price. As for the number 6, although it is not stated, the probability is also a multiplier derived from historical data. Although L2 is counted, this valuation method still refers purely to TVL data, and is not much better than the first method. “Promise” premium This method is also similar to the second model, but with the addition of Ethereum, which is locked in the DeFi protocol. The multiplier in this model takes the total amount of ETH staked and locked in the DeFi protocol divided by the total ETH supply to represent a percentage premium from a “long-held belief and lower liquidity supply.” Add this percentage by 1 and multiply the value premium index of the “committed” asset relative to the current asset by 1.5 to get a reasonable ETH price under the model. The formula is: Price × [1+(Staked + DeFi) ÷ Supply]× Multiplier, resulting in a price of $5097.8, which is 69.1% upside from the current price. Hashed said the model was inspired by the notion that L1 tokens should be treated as currencies rather than stocks, but still stuck with the problem that a reasonable price is always higher than the current price. The biggest problem with the above 4 low-reliability valuation methods is that the single dimension of consideration lacks rationality. For example, TVL data is not higher is better, if you can use lower TVL to provide better liquidity is an improvement. As for viewing non-circulating Ethereum as a scarcity or loyalty band that generates a premium, it seems impossible to explain how it will be valued when the price does reach the expected price. After talking about 4 low-reliability valuation scenarios, let's look at 5 medium-reliability scenarios. Market Cap / TVL Fair Value The model is essentially a mean reversion model, calculated by determining that the historical average of the ratio of market capitalization to TVL is 6 times, more than is overestimated, insufficient is underestimated, the formula is Price × (6 ÷ Current Ratio), resulting in a price of $3541.1, which is 17.3% upside from the current price. This calculation method is ostensibly based on TVL data, but in fact refers to historical laws, and the valuation method carried out in a more conservative way does seem to be more reasonable than simply referring to TVL. Metcalfe's Law Metcalfe's Law is a law about the value of networks and the development of network technology, proposed by George Gild in 1993, but named after Robert Metcalfe, a pioneer in computer networking and founder of 3Com Inc., in recognition of his contributions to the Ethernet network. The content is that the value of a network is equal to the square of the number of nodes in the network, and the value of the network is proportional to the square of the number of connected users. According to Hashed, the model has been empirically verified by academic researchers (Alabi 2017, Peterson 2018) on Bitcoin and Ethereum. TVL is used here as a proxy metric for network activity. The formula is 2 × (TVL/1B)^1.5 × 1B ÷ Supply, resulting in a price of $9957.6, which is 231.6% upside from the current price. This is a relatively professional model, and it is also labeled by Hashed as an academic verification model with strong historical relevance, but it is biased to use TVL as the only consideration. Discounted Cash Flow Method This valuation model is by far the most valued way to view Ethereum as a company, treating Ethereum's staking rewards as revenue, calculating the current value through the discounted cash flow method, and Hashed gives the calculation of Price × (1 + APR) ÷ (0.10 – 0.03), where 10% is the discount rate and 3% is the perpetual growth rate. This formula is obviously problematic and should actually be that when n tends to infinity, Price × APR ×(…