The Development and Assessment of the DeFi Market

The DeFi market has shown a vigorous development trend in recent years, with its application scope expanding to multiple public chains and Layer 2 networks. In this process, we have witnessed the rise of various DeFi application scenarios, including decentralized exchanges (DEX), lending platforms, staking services, derivatives trading, and cross-chain bridges. These applications are continuously innovating, aiming to optimize user experience and inject new vitality into the cryptocurrency ecosystem.

Among the many DeFi applications, DEX, staking, and lending services are undoubtedly the three most popular and mature types. Whenever a new blockchain ecosystem is born, these three types of DeFi protocols are often the first to be developed and deployed. They not only meet the basic needs of users but also lay the foundation for the development of the entire ecosystem.

For those seeking investment opportunities, the emerging blockchain ecosystem may contain potential prospects. Especially on some alternative Layer1 public chains or Layer2 scaling solutions, emerging Decentralized Finance projects may attract a large number of users and funds. These projects often provide higher yields or lower transaction fees, allowing them to stand out in the highly competitive DeFi market.

When evaluating DeFi protocols, investors and analysts typically consider multiple indicators. These indicators include but are not limited to:

1. Total Value Locked (TVL)
2. Active User Count
3. Trading Volume
4. Protocol Revenue
5. Market Value (MV)
6. Fully Diluted Valuation (FDV)
7. The ratio of market capitalization to TVL (MV/TVL)
8. Price-to-Sales Ratio (P/S)
9. Price-to-Earnings Ratio (P/E)
10. The innovativeness of the project

These indicators can reflect the health, growth potential, and relative valuation of a DeFi project from multiple angles. However, it is important to note that a single indicator often cannot comprehensively reflect the true value of a project. Investors should consider multiple factors in conjunction with the project's long-term development strategy and market environment to make judgments.

As the DeFi market continues to evolve, we can expect to see more innovative applications and solutions emerging. This will not only provide users with more choices but will also drive the entire cryptocurrency industry towards a more mature and efficient direction.