According to Ki Young Ju, a market analyst and CEO of crypto market evaluation platform CryptoQuant, the Ethereum network's native token, Ether (ETH), is undervalued in nine out of 12 commonly used valuation models.
A composite “fair value” using all 12 valuation models values ETH at roughly $4,836, a rise of over 58% in comparison with the worth on the time of writing.
Each scoring model was rated for reliability on a three-point scale, with three being essentially the most reliable. Eight of the twelve models have a reliability rating of at the very least two. “These models were developed by trusted experts in academia and traditional finance,” Ju said.
12 different ETH valuation models suggest that ETH is undervalued at current market prices just above $3,000. Source: ETHval
The App Capital valuation model, which takes into consideration all on-chain assets including stablecoins, ERC-20 tokens, non-fungible tokens (NFTs), real-world tokenized assets (RWAs), and bridged assets, values ETH at a good value of $4,918, in line with ETHval.
Using Metcalfe's Law, which states that the worth of a network grows in proportion to the square of the particular lively users or the variety of nodes on the network, ETH is predicted to be priced at $9,484, which, in line with the model, means the asset is over 211% undervalued.
ETH's valuation by the Layer 2 (L2) framework, which takes into consideration the Total Value Locked (TVL) in Ethereum's Layer 2 scaling network ecosystem, predicts a price of $4,633 per ETH, meaning ETH is roughly 52% undervalued.
The Ethereum community and analysts proceed to debate how one can properly value the world's first smart contract platform. Many say that traditional valuation models are usually not sufficient to value emerging digital assets and decentralized blockchain networks.
Despite the mostly rosy outlook, one valuation model says ETH is heavily overvalued
The Revenue Yield valuation model, which values ETH based on the annual revenue generated by the network divided by ETH's staking yield, states that ETH is overvalued by over 57% at current prices above $3,000.
Revenue Yield is essentially the most reliable valuation model for accurately pricing ETH, in line with ETHval's criteria and methodology.
According to the model, ETH ought to be priced at around $1,296, highlighting the Ethereum network's dwindling revenue generation as fees hit record lows and rival networks absorb a few of its market share.
