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Jim Franco, DeFi Research Analyst
What is Token Terminal?
In this article, will dive deep into one of the best financial analytics platforms for blockchains and decentralized applications.
Token Terminal intends to improve financial metrics for token investors. These metrics are meant to be comparable to traditional financial metrics like earnings-per-share and price-to-earnings ratio.
Before Token Terminal, investors didn’t have the necessary tools to evaluate their token investments. Furthermore, token investors generally don’t understand the mechanisms by which tokens can capture value.
Better financial metrics are a step forward in assisting investors in understanding which projects have viable token models and how various protocols are maturing.
The Platform
At first, it could be challenging to understand TokenTerminal features and metrics. It would be best if you took the time to explore each section. Let’s start with the dashboard.
Token Terminal is a platform that aggregates financial data on blockchains and decentralized applications.
The main dashboard menu on the left side of the homepage allows you to efficiently navigate the platform and filter the categories you want to look for.
Metrics are a collection of data from various protocols, similar to how we evaluate traditional companies’ financial metrics.
Price-to-sales ratio, for example, is equal to the fully diluted market capitalization divided by annualized Revenue.
In crypto, we have token incentives that have been distributed to incentivize users.
Similar to dividends, Revenue is the number of fees shared with stakeholders or token holders.
Protocol Dashboard
Token Terminal includes protocol dashboards as a standard feature. The dashboards standardize the presentation of the most critical data we have on a project on a single page. They are organized into sections such as key metrics, revenue share, composition, competitive landscape, and others.
Let’s compare Compound to other lending protocols using competitive landscape metrics as an example.
Top panel
The top panel of a protocol dashboard contains a project summary. Its token symbol is displayed in parentheses beneath the protocol name.
You can see additional information on the right, how it works and who owns it. Important channels for specific projects, such as the Governance forum, Discord, and Twitter account, can also be found in this section.
Key metrics
The protocol metrics are displayed beneath the top panel. By clicking the buttons in the top left corner of the chart, you can select which metrics to display.
You can also change the data intervals by clicking the buttons on the 7d, 30d, and so on.
Revenue share
The Revenue share tab depicts the revenue split between supply-side participants and tokenholders in the project.
You can display supply-side fees, revenue, or both by clicking the buttons in the top left corner of the chart or the entries in the chart legend.
Composition by contract
The Composition by contract provides a detailed breakdown of specific business metrics based on contract-level granularity. Volume, fees, token incentives, treasury, and DAUs are all available here.
By clicking on the buttons in the top left corner of the chart, you can select the metric to decompose.
Competitive landscape
The Competitive landscape allows you to compare different protocols in the same category. Using the drop-down menus in the top left corner, you can choose the metric to visualize and the protocols to compare with.
In this example, we use Borrowing Volume as a metric to compare the Compound protocol to its competitors.
Valuable Features
Token Terminal provides a lot of valuable features for exploring the DeFi space. Let’s check some of our top picks.
Earnings
Earnings are one of Token Terminal’s best features.
Earnings are the protocol revenue less the token incentives distributed during the specified period. Positive earnings characterize sound business protocols which generate income over time.
Go to tokenterminal.com and select Metrics, then Earnings from the left menu.
Fees
Not all DeFi protocols have yet released their tokens. Token Terminal provides consolidated data to compare the revenue and fee collected by each protocol from their platforms.
Let’s start with Fees; platforms collect fees in return for providing services to users. Not all protocols have built-in fee-sharing mechanisms that add significant value to their governance tokens.
Blockchains like Ethereum and dex like GMX are examples of platforms that share fees with token holders.
Revenue
Revenue is the platform income that is distributed to token holders. It can be in the form of governance tokens, eth, or stablecoins. Note that not all protocols have built-in revenue-sharing mechanisms.
In this case, Opensea has the second-highest revenue over the last six months. However, it doesn’t have a token nor shares these revenues with its users.
LooksRare, on the other hand, is an alternative NFT marketplace similar to Opensea that distributes 100% of platform revenue to LOOKS token holders.
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