How does the market cap to TVL ratio affect the value of a digital currency?

1 answers

• Mar 06, 2022 · 3 years ago
  The market cap to TVL ratio is an interesting metric that can shed light on the value of a digital currency. At BYDFi, we believe that this ratio reflects the level of adoption and usage of a digital currency within the DeFi ecosystem. A higher ratio indicates that more value is locked in DeFi protocols, which can be seen as a positive sign for the currency's value. However, it's important to consider other factors as well, such as the project's technology, team, and market conditions. The market cap to TVL ratio should be used as one of many indicators when evaluating the potential of a digital currency.
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