TechFlow, Dec. 3 — According to a report by DL News, Berlin-based venture capital firm Greenfield has released research indicating that the decentralized finance (DeFi) market is beginning to price based on fundamentals, although this process will take several months to become evident.
The study found that three key metrics—protocol fees, total value locked (TVL), and revenue—better explain changes in valuations than other variables. Models based on these metrics generally outperform analytical models tracking Bitcoin and Ethereum performance, as well as models incorporating social sentiment. Greenfield partner Felix Machart said: "The longer the market runs, the more we see differentiation based on fundamentals, rather than all projects moving in line with broader market trends." The research shows this theory holds over three- and six-month timeframes. However, within one month, fundamental indicators are less explanatory than models simply tracking Bitcoin and Ether prices.
