Investment: how to calculate the attractiveness of a cryptocurrency

Sometimes the bet offer is too small to count or not at all. Then we use the formula, removing the staking.

An example is LRC:

10% – apy

70% – fee for all trades for srakers

10% – burn

0.5% – buying and selling fees

1,374,513,896 – circulating supply

240,000,000 – trading volume per day

1,200,000 – fee per day

840,000 – fee for staker per day, 25,200,000 per mouth, 302,400,000 per year

120,000 – burns per day, 3,600,000 per mouth, 72,000,000 per year

1,374,513,896/72,000,000 = 19

1,374,513,896/72,000,000+302,400,000=3.6

You can substitute different data. The main thing to observe is that the inflationary factors are in the first part of the coefficient and the deflationary factors in the second.

Thus, we obtain a coefficient which reflects the advantage of deflation over inflation. After analyzing the sector (each asset), we can get the average ratio. And as a result, to understand what assets stand out from the sector.

For example, after analyzing the TOP 100 centralized exchange sector, it became clear that the average value is 20.

Here are the prices for the projects:

BNB-20

OKB-15

FTT-17

KCS-20

HT-25

LEO-105

We can conclude that attractive coins for investment will be OKB and FTT, as their ratios are below average. LEO is not an attractive investment. The rest is neutral.

Short term vs long term

This does not mean that these projects will benefit in the short term. On the contrary, these coins will quickly give a small profit. So, LEO coin is growing faster than others at this time. But if you deal with it for a long period of time, it will lose to investments with a lower coefficient.

This is because this coefficient shows how quickly the coin supply will decrease. Deflation largely reflects supply constraints. But it should be noted that you cannot rely solely on this coefficient. Since it only reflects growth/reduction in supply. The demand factor must also be taken into account.

The previous coefficient reflects the internal economy of the project. How will the coin supply reflect in a year, for example.

Now we have to consider the external demand for the coin itself. After all, by combining these 2 indicators, one can understand the attractiveness of the project for investors and future profitability (at least through a reduction in supply – in a year there are 10% less coins, demand is good, which means that at least 10% growth can be predicted fundamentally).

Second coefficient