Another blockchain metric brought to you by Matteo Leibowitz, ported by me to tradingview for your viewing pleasure.
Fees as Indicator of Demand. After some consideration, I believe that aggregate transaction fees in dollar terms across different time periods can provide a semi-accurate representation of network demand.
Fees are more resistant to spoofing than alternative metrics like ‘Transaction Count’ and ‘Transaction Volume’, the former susceptible to low fee transaction spamming, the latter susceptible to ‘wash transactions’ by wealthy investors. Conversely, the only way to significantly boost a network’s fee revenue is to spend significant capital on fees.
Fees also act as near-direct proxy for demand to use the crypto asset as a Medium of Exchange, ‘gas’ for Decentralized Applications, or a hybrid of the two.
By measuring aggregate fees over varying time periods and comparing it to network value, we can ascertain the extent to which a network is over or undervalued relative to demand for the network as an alternative payment system and/or decentralized application execution system. This might be somewhat analogous to the Price/Sales ratio used in the stock market.
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