What is your blockchain's #TEV ?
Calculating a blockchain's Total Economic Value (TEV) means figuring out how much economic benefit it provides. This involves looking at several factors:
1. Direct Financial Value:
- Market Capitalization: The total value of all tokens in circulation, showing how the market values the blockchain.
- Transaction Fees: Revenue generated from the fees users pay for transactions on the blockchain.
- Value Transferred: The amount of value exchanged between unique participants.
2. Cost Savings:
- Blockchains can cut costs by removing middlemen. This can lower expenses in areas like financial transactions, supply chain management, and identity verification.
- Benefit to Governments: Governments and systems that manage public services can see significant cost savings.
3. Revenue Generation:
- Blockchains can create new ways to make money, such as through decentralized applications (dApps), digital collectibles (NFTs), and decentralized finance (DeFi) platforms.
4. Capital Relief:
- By improving how assets are used and reducing the need for working capital, blockchains can lower financial risks and the need for extra capital.
5. Indirect Value:
- Blockchains can make processes more efficient and enable new business models, like better supply chain management, secure voting systems, and efficient energy trading.
6. Network Effects:
- As more people use a blockchain, its value often increases. This is because the more participants there are, the more useful the blockchain becomes.
7. Social and Environmental Impact:
- While not directly part of TEV, considering how a blockchain affects society and the environment is important. For example, it can help create sustainable supply chains and improve governance transparency.
Understanding the TEV of a blockchain is complex and involves making assumptions and estimates. The true value often goes beyond just the financial aspects.