Bankless Introducing RSOV: A Better L1 Valuation Metric than REV | Jonah Weinstein
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May 26, 2025 
Join Jonah Weinstein from Skycatcher as he introduces RSOV, a revolutionary metric for evaluating Layer 1 assets. He critiques traditional valuation models like REV and DCF for their shortcomings in the crypto space. Discover how RSOV combines realized value with market dynamics to offer a clearer picture of token worth. The discussion highlights the unique status of Bitcoin and the rising significance of Ethereum in decentralized finance. Get ready for fresh insights that could reshape your understanding of digital currencies!
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L1 Tokens Are Money Assets
- Layer 1 tokens are primarily valued as money, accruing value for payments and store of value use cases.
- Traditional financial valuation models like DCF don't fit well since these tokens earn yield in their own currency, not a non-native asset.
REV and DCF Model Limitations
- REV measures transaction fees paid to validators but treats tokens like company shares, which is misleading.
- Because validators earn native tokens, not non-native revenue, DCF models don't align well with L1 token valuation.
Store of Value Dominates Token Value
- Store of value demand drives more long-term value for L1 tokens than payments.
- Payments demand declines in value impact as blockchains scale and transaction cost deflates, while token supply inflation remains low.