GlossaryAdvanced
NVT Ratio
A network's market capitalization divided by a measure of its on-chain transaction activity, used as a crypto-native valuation multiple.
The NVT (network value to transactions) ratio divides a network's market capitalization by a measure of its on-chain transaction volume, serving a role in on-chain analysis somewhat analogous to a traditional price-to-earnings ratio — comparing a network's market value to a measure of its real economic activity.
A high NVT can suggest a network's valuation is running ahead of its current on-chain activity; a low NVT can suggest the opposite. See Kaavon's dedicated NVT Ratio article for how the analogy to traditional valuation multiples holds and where it breaks down.
Examples
- A rising NVT ratio, without a corresponding rise in on-chain activity, is commonly discussed as a sign valuation may be outpacing usage.
- NVT is a genuinely crypto-native valuation multiple, not a renamed version of a traditional financial ratio, despite the conceptual similarity.