Ether Trading at 27% Discount to Fair Value, New Research Shows


18 Sep 2023 7:43 AM

Ether is trading at a 27% discount to its fair value, according to research firm RxR's blended Metcalfe law-centric valuation model, which incorporate...

  • Ether (ETH), the native token of the Ethereum blockchain, is trading at a 27% discount to its fair value, according to analysis by research firm RxR.
  • RxR's valuation model incorporates active user adoption of layer 2 scaling networks, which traditional models focusing only on the active user adoption of the Ethereum layer 1 might overlook.
  • The fair value projection is based on a blended version of the Metcalfe law, which considers the active user base on Ethereum scaling networks and the Ethereum mainnet.
  • Ether's market cap appears undervalued compared to RxR's ML Blended Model, which takes into account the increasing activity on layer 2 networks and offchain solutions.
  • Layer 2 protocols have seen significant growth, with the total value locked increasing more than tripled to over $9 billion in two years.

The sentiment of the article is generally positive, highlighting the potential undervaluation of Ether and the growth of layer 2 protocols.

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You May Ask

What is the current discount at which Ether is trading compared to its fair value?What factors does RxR's valuation model consider that traditional models might overlook?How does the Metcalfe law relate to the value of the Ethereum network?What is the significance of layer 2 protocols and their growth in the market?Which layer 2 protocols have found success in their respective niches?

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