Valuation Multiple
A ratio comparing an asset's price or market value to some measure of its underlying economics or activity.
A valuation multiple is a ratio that compares an asset's price (or total market value) to some other measure — earnings, revenue, book value, or cash flow for a traditional company; on-chain activity or locked capital for a crypto network — used to gauge whether the asset is priced cheaply or richly relative to that underlying measure.
P/E, P/B, P/S, and EV/EBITDA are all traditional-finance valuation multiples; NVT and TVL-to-Market-Cap are crypto-native equivalents built around on-chain data rather than a company's financial statements. No single multiple is universally "correct" — each makes a different trade-off in what it measures and what data it depends on.
Examples
- P/E is a valuation multiple comparing price to earnings; P/S compares price to revenue instead.
- NVT is a crypto-native valuation multiple comparing a network's market value to its on-chain transaction activity.