Highest TVL : Market Cap for Layer1s

𝘋𝘢𝘵𝘢 𝘧𝘳𝘰𝘮 𝘋𝘦𝘧𝘪𝘭𝘭𝘢𝘮𝘢

1️⃣ $ARB
2️⃣ $POL
3️⃣ $HASH
4️⃣ $APT
5️⃣ $HYPE
6️⃣ $AVAX
7️⃣ $TRON
8️⃣ $SUI
9️⃣ $MNT
🔟 $CRO

Why this matters to you? 👇

➢ The TVL to Market Cap ratio is a valuation metric used to assess whether a DeFi protocol or blockchain is undervalued or overvalued relative to the actual capital deployed in its smart contracts.

➢ How It Works

The ratio is calculated by dividing a protocol's Market Capitalization (the total value of its issued tokens) by its Total Value Locked (TVL) (the value of assets deposited by users) 1 3.

> Ratios below 1.0: Generally suggest a project is undervalued. This indicates the market cap is smaller than the capital users have actually entrusted to the protocol

> Ratios above 1.0: Often suggest overvaluation, where the token's market price exceeds the fundamental value of assets locked in the ecosystem

e.g. Arbitrum has a ratio of 2.6 which means it has over 2.6 times more TVL than its market cap which is a signal often interpreted as extreme undervaluation or high capital efficiency.

➢ Benefits: It provides a quick snapshot of "utility vs. price," helping investors identify protocols that have high adoption but haven't yet seen a corresponding price surge.