Data as of Aug 25, 2026 · Based on 301 AI responses from ChatGPT Search and Google AI Mode · See how Parse measures this
Best single starting tool: 
L2BEATBrands AI recommends here
Named in 66% of answers
Best for treating protocols like companies — revenue, fees, and price-to-sales comparisons — when you want standardized financial metrics; it focuses on financials, not raw on‑chain user queries.
Named in 65% of answers
Best when you need a free, cross-chain view of TVL, fees, and protocol revenue to compare liquidity and ecosystem growth; not a replacement for bespoke SQL dashboards or labeled wallet flows.
Named in 57% of answers
Best when you need bespoke, community-built SQL dashboards to track unique depositors, bridge netflows, or retention — excellent for custom metrics but requires query skills or community scripts.
Named in 50% of answers
Best when you want labeled wallet and "smart money" signals to see if VCs or top wallets are accumulating; excellent for flow and distribution insight but less focused on raw TVL or revenue ratios.
Source | Citation share |
|---|---|
 Measuring growth in crypto: What’s different, what matters, and what needs to be adapted - a16z cryptohttps://a16zcrypto.com/posts/article/measuring-growth-in-crypto/ | 3.3% |
 Crypto Fundamental Data On altFINS: Identifying Projects with Real Traction - altFINShttps://altfins.com/knowledge-base/fundamentals-filters-on-altfins/ | 2.9% |
 What is fundamental analysis in crypto and stocks? Definition, approach & use caseshttps://www.cointracker.io/learn/fundamental-analysis | 2.7% |
 20 Popular Blockchain Analytics Tools and Companieshttps://coinmarketcap.com/academy/article/20-popular-blockchain-analytics-tools-and-companies | 2.6% |
Metrics | Token Terminalhttps://tokenterminal.com/explorer/metrics | 2.0% |
 TVL, TPS, Token unlock, revenue… key blockchain metrics ...https://coinshares.com/us/insights/knowledge/tvl-tps-token-unlock-revenue-key-blockchain-metrics-you-need-to-know/ | 1.9% |
 Analytics Hub | AltPathshttps://altpaths.io/crypto-education/fundamental-analysis | 1.6% |
 Top 10 On-Chain Analysis Tools for Crypto Traders - BingXhttps://bingx.com/en/learn/article/what-are-the-top-on-chain-analysis-tools-for-crypto-traders | 1.4% |
 10 Best Crypto Analysis Tools | Koinlyhttps://koinly.io/blog/crypto-analysis-tools/ | 1.2% |
 Six Fundamental Metrics to Evaluate DeFi Assetshttps://bitwiseinvestments.com/crypto-market-insights/six-fundamental-metrics-to-evaluate-defi-assets | 1.1% |
As a long-term altcoin investor, evaluating Layer 1 (L1) and Layer 2 (L2) networks requires treating them like digital nation-states or tech platforms. Hype cycles can distort prices short-term, but fundamental metrics reveal whether an ecosystem is capturing genuine economic gravity or running on subsidized fumes.…
As a long-term altcoin investor, evaluating Layer 1 (L1) and Layer 2 (L2) networks requires treating them like digital nation-states or tech platforms. Hype cycles can distort prices short-term, but fundamental metrics reveal whether an ecosystem is capturing genuine economic gravity or running on subsidized fumes.
1. Core Fundamental Metrics
Total Value Locked (TVL)
Fees vs. Revenue (The Economic Engine)
Active Users & Transaction Throughput
Tokenomics & Fully Diluted Valuation (FDV) Drag
2. Essential Research Tools
If you'd like, let me know:
I can share a deeper framework on how to weight token value accrual versus pure ecosystem adoption.
For a **long-term L1/L2 investor**, I’d avoid treating TVL, revenue, or users as standalone signals. The better question is: > **Is economic activity growing, is that activity organic, and does the token actually capture enough of the network’s value to justify its valuation?** ## The metrics I’d prioritize
For a long-term L1/L2 investor, I’d avoid treating TVL, revenue, or users as standalone signals. The better question is:
Is economic activity growing, is that activity organic, and does the token actually capture enough of the network’s value to justify its valuation?
| Metric | What it tells you | My weighting |
|---|---|---|
| Fees / revenue | Real willingness to pay for blockspace | ⭐⭐⭐⭐⭐ |
| Active users | Whether adoption is actually broadening | ⭐⭐⭐⭐⭐ |
| Stablecoin supply & transfers | Economic liquidity and settlement activity | ⭐⭐⭐⭐⭐ |
| DEX/perps volume | Depth of financial activity | ⭐⭐⭐⭐ |
| TVL | Capital attracted/stored in ecosystem | ⭐⭐⭐⭐ |
| Developer activity | Future application supply | ⭐⭐⭐⭐ |
| Token value capture | Whether network success benefits the token | ⭐⭐⭐⭐⭐ |
| FDV / revenue or fees | How expensive the network is | ⭐⭐⭐⭐⭐ |
| Token unlocks / emissions | Future selling pressure | ⭐⭐⭐⭐⭐ |
For L1s and L2s, I'd put fees and revenue ahead of TVL.
TVL tells you capital is sitting in the ecosystem, but it doesn't necessarily mean that capital is generating sustainable economic activity. Token Terminal defines fees as what users pay and revenue as the portion retained by the protocol/tokenholders, making the distinction particularly useful.
I'd examine:
A chain generating $100M of annualized fees with modest growth can be more interesting than one with $10B TVL and negligible fee generation.
DAU/MAU growth is one of my favorite adoption indicators, but raw wallet counts can be misleading because one person can control multiple addresses and bots/contracts can generate activity.
Artemis, for example, defines DAU as unique addresses transacting during a rolling 24-hour period and also provides metrics such as DAU-over-$100, transactions, fees, stablecoin balances and developer activity.
I'd therefore look at:
DAU → MAU → transactions → fees
and ask whether all four are growing together.
Especially valuable is DAU growth without proportional token incentives.
I'd add stablecoin supply and transfer volume to your core dashboard.
A chain with growing stablecoin liquidity has potentially increasing capacity for:
Artemis specifically tracks stablecoin market capitalization and stablecoin transaction metrics, including versions excluding MEV activity.
For me, stablecoin growth + active users + fees is considerably stronger evidence than TVL alone.
Don't just rank chains by TVL.
Ask:
Who owns the TVL?
For example:
Then calculate something like:
Organic TVL = TVL − obvious native-token/staking distortions
And watch TVL growth in ETH/BTC/stablecoin terms, not merely USD. A chain can appear to gain TVL because its native token appreciated.
DeFiLlama is particularly useful here because its chain dashboards combine TVL, fees, revenue, volume, stablecoins and other metrics.
A phenomenal blockchain does not automatically mean a phenomenal token.
This is where I'd spend a lot of my research time.
Suppose:
Network activity ↑ 100% Revenue ↑ 80% Users ↑ 60% Sounds great.
But if:
Token supply ↑ 150% FDV ↑ 200% Tokenholders receive almost none of the economic value …the token could still be a terrible investment.
I therefore want to understand:
This is the bridge between "great network" and "great investment."
Once you have fundamentals, compare valuation.
Some useful ratios:
Market cap / annualized revenue
FDV / annualized revenue
Market cap / annualized fees
FDV / TVL
Market cap / active users
I wouldn't mechanically buy the lowest multiple. Instead, compare valuation against growth.
For example:
| Chain | Revenue growth | User growth | FDV/revenue | Interpretation |
|---|---|---|---|---|
| A | 80% | 60% | 15× | Potentially attractive |
| B | 10% | 5% | 8× | Cheap, but possibly stagnant |
| C | 150% | 100% | 50× | Great business, expensive token |
| D | -20% | -10% | 20× | Avoid/watch |
The ideal hunting ground is often high fundamental growth + reasonable valuation, rather than simply the chain with the largest TVL.
Token Terminal explicitly supports comparable metrics including TVL, active users, fees, revenue, valuation multiples and developer activity.
Best first stop.
Use it for:
Its metrics dashboard covers chain TVL, fees, revenue, volume, stablecoins and other ecosystem data.
This is where I'd go deeper.
Look at:
Those are all available as standardized Artemis metrics.
Probably my favorite tool for answering:
"Is this network's economic activity worth what the token is currently valued at?" It provides standardized financial and usage data across 100+ chains, including fees, revenue, expenses, earnings, active users and market-cap metrics.
Its financial-statement approach is particularly useful because you can distinguish revenue from expenses and cost of revenue, rather than treating gross fees as profit.
For L2s specifically, I'd add L2BEAT to the stack.
Don't just look at L2 TVL. Examine:
That's particularly important because two L2s can have similar TVL and activity while having dramatically different technological/security profiles.
If I were building a long-term portfolio, I'd roughly score each L1/L2 from 0–5:
Fundamentals — 40%
Token economics — 30%
Network moat — 20%
Catalysts/risk — 10%
Then I'd look for something like:
Strong fundamentals + accelerating growth + improving value capture + reasonable valuation + manageable unlocks. That's much more powerful than simply buying the L1s with the highest TVL.
I'd be especially cautious when I see:
In other words, don't confuse activity with economic value, and don't confuse network value with token value.
If I had to reduce the entire framework to five things to monitor every month, they'd be:
1. Active users 2. Fees/revenue 3. Stablecoin + economic volume 4. Token value capture 5. FDV relative to fundamentals
TVL would be my sixth, not my first.
TVL would be my sixth, not my first.
Evaluating Layer 1 (L1) and Layer 2 (L2) tokens requires looking past hype and focusing on economic reality. As a long-term investor, you want to identify networks capturing genuine, sticky economic value rather than those subsidizing short-term activity through unsustainable token…
Evaluating Layer 1 (L1) and Layer 2 (L2) tokens requires looking past hype and focusing on economic reality. As a long-term investor, you want to identify networks capturing genuine, sticky economic value rather than those subsidizing short-term activity through unsustainable token incentives.
Fundamental Metrics to Evaluate L1/L2s
Top Analytics Tools for Deep Dives
If you'd like, let me know:
I can run a deeper fundamental breakdown for your portfolio strategy.
For a **long-term altcoin accumulation strategy**, I would treat an L1/L2 token less like a tech stock and more like a **network ownership claim**. The key question is: > “Is this blockchain becoming a valuable economic network, and does the token capture that value?” TVL, revenue, and active users matter, but they…
For a long-term altcoin accumulation strategy, I would treat an L1/L2 token less like a tech stock and more like a network ownership claim. The key question is:
“Is this blockchain becoming a valuable economic network, and does the token capture that value?” TVL, revenue, and active users matter, but they answer different questions. A strong framework combines usage, economics, valuation, and token design.
Question answered: “Are people paying to use this network?”
Track:
A chain with $100M+ annualized fees and growing usage is fundamentally different from one relying entirely on incentives.
Important distinction:
For example, DeFiLlama explicitly separates fees and revenue metrics, which helps avoid confusing raw activity with actual value capture.
Useful ratios:
FDV / Revenue
Lower can indicate undervaluation
Extremely high values suggest the market is pricing in huge future growth
Market Cap / Fees
Similar to a price-to-sales concept
Revenue growth rate
A $5M revenue chain growing 300% may be more interesting than a mature chain growing 5%
Question answered: “Are real people using it?”
Look at:
Avoid looking only at raw transactions. A chain can inflate activity through:
Better signals:
Artemis is one platform focused on comparing chain fundamentals such as users, fees, revenue, TVL, and ecosystem activity.
Question answered: “How much capital trusts this ecosystem?”
TVL helps measure:
But TVL alone is dangerous because it can be:
Better metrics:
Ask:
A useful comparison:
TVL / Market Cap
Example:
Chain A:
$5B TVL
$50B valuation
Ratio = 0.10
Chain B:
$2B TVL
$5B valuation
Ratio = 0.40
Chain B may be cheaper relative to ecosystem size.
DeFiLlama is widely used for comparing chain TVL, fees, revenue, stablecoins, and other ecosystem metrics.
Often overlooked, but one of the strongest long-term indicators.
Track:
A chain without developers usually has no durable moat.
Questions:
A great blockchain does not automatically mean a great token.
Analyze:
Look at:
A chain can grow while the token underperforms if supply expands too quickly.
Ask:
Does the token:
Governance-only tokens often have weaker value capture.
Prioritize:
Add:
For Ethereum L2s specifically, I would also examine risk and decentralization assessments from resources such as L2-focused analytics platforms.
Best first stop:
DefiLlama### Dune Analytics
Best for custom questions:
Best for:
Coin Bureau### Artemis
Best for:
I would roughly weight:
| Category | Weight |
|---|---|
| Revenue + fee growth | 25% |
| User growth + retention | 20% |
| Developer activity | 15% |
| Token economics | 20% |
| TVL + liquidity quality | 10% |
| Valuation vs peers | 10% |
A candidate becomes interesting when:
✅ Users are growing ✅ Revenue is growing ✅ Developers are staying ✅ Token supply is manageable ✅ Valuation is reasonable compared with competitors
The biggest mistake in crypto investing is buying high activity with poor token economics or cheap tokens with no real adoption. The best long-term opportunities usually sit where network fundamentals are improving faster than the market price reflects.
For a **long-term L1/L2 investment**, I’d treat TVL, revenue, and active users as three pieces of a larger fundamental picture—not as standalone buy signals. The framework I’d use is: > **Economic activity → users → capital → fees/revenue → token value capture → valuation**
For a long-term L1/L2 investment, I’d treat TVL, revenue, and active users as three pieces of a larger fundamental picture—not as standalone buy signals.
The framework I’d use is:
Economic activity → users → capital → fees/revenue → token value capture → valuation
| Metric | What it tells you | What I look for |
|---|---|---|
| Active users / addresses | Is there real usage? | Persistent growth, not one-off spikes |
| Fees | What users actually pay | Growing fees without relying entirely on incentives |
| Revenue / tokenholder revenue | How much economic value reaches the protocol/token | Revenue growth + credible value accrual |
| TVL | Capital committed to the ecosystem | Sticky TVL, ideally diversified across apps |
| Stablecoin supply | Economic liquidity available on-chain | Sustained growth |
| DEX volume | Trading/economic activity | High volume relative to valuation |
| Transactions | Network utilization | Growth accompanied by meaningful users |
| Developers | Future ecosystem/product pipeline | Sustained core + ecosystem development |
| Token supply/inflation | Dilution | Low/declining net issuance |
| FDV / market cap | What you're paying | Cheap relative to fundamentals and peers |
One important distinction: TVL is not revenue. DeFiLlama defines TVL as the value of assets held in protocols, while fees are what users pay and revenue is the portion retained by the protocol rather than distributed to liquidity providers.
TVL is useful, but it can be misleading.
For example, a chain could have $10B TVL because of heavily incentivized liquidity, while another has $3B TVL generating dramatically more organic activity and fees.
I'd therefore examine:
TVL → stablecoin TVL → TVL growth → fees/TVL → users/TVL
That tells you whether the capital is actually being used.
A particularly interesting signal is TVL per active user. A huge number can mean wealthy/high-value users—or simply mercenary capital. You need to investigate which.
Don't blindly use DAU.
A chain can manufacture millions of transactions with bots, arbitrage, inscriptions, games, or incentive farming.
I'd look at:
Artemis, for example, tracks DAU, DAU over $100 balances, transactions, fees, revenue, stablecoin capitalization, developers, commits and contracts deployed.
That gives you a much better picture than "X million transactions this month."
For a token investor, I ultimately want to know:
Does increasing network usage create economic value for the token?
That's different from asking whether the blockchain generates fees.
For example:
Users ↑ → transactions ↑ → fees ↑ → token burned / stakers compensated / treasury receives value → token economics improve
is much more compelling than:
Users ↑ → fees ↑ → sequencer/operator captures everything → token holders receive nothing
Artemis has specifically expanded its revenue framework to distinguish revenue accruing to tokenholders from other economic activity, including active vs. passive revenue.
This is one of the most important distinctions for L1/L2 investing.
L2s require special treatment because the economics are different from L1s.
I'd examine:
L2 revenue
L2 costs
Then:
L2 gross revenue − L1/data-availability costs = approximate economic surplus
And then ask:
How much of that surplus accrues to the token?
That's crucial because an L2 can have enormous transaction activity while its token captures little or none of the economics.
For L2s I'd also track:
Rather than looking only at revenue, I like comparing economic activity against valuation.
Artemis has proposed Total Economic Activity (TEA), combining chain fees & MEV, settlement volume and application fees. Their argument is that looking at a blockchain as an economy captures activity that pure fee/revenue metrics can miss.
I wouldn't treat TEA as gospel, but the concept is useful:
How much economic activity am I buying for every dollar of market cap?
That's often more informative than simply asking which chain has the largest TVL.
Best for:
It's my starting point for almost every L1/L2 screen.
Particularly useful for:
Artemis explicitly supports comparative analysis across chains and protocols.
I'd use it when you want to compare:
Its project dashboard is explicitly designed around financial/usage metrics such as fees, active users, TVL and valuation.
Especially useful for:
For L2 investing, I'd consider this close to mandatory because economic metrics without technical/security context can produce terrible conclusions.
For every candidate L1/L2, I'd create something like:
Fundamentals
Quality
Token economics
Valuation
Then I'd rank the chains based on growth + quality + value capture + valuation, rather than picking whichever has the highest TVL.
For a long-term portfolio, I'd start around:
25% — sustainable user growth
20% — fees/revenue growth
15% — token value capture
10% — stablecoin + liquidity growth
10% — developer/ecosystem strength
10% — token supply/unlocks
10% — valuation
And I'd apply a "fake activity" penalty for chains where users/transactions are growing much faster than economic activity.
The biggest mistake I'd avoid is:
TVL ↑ + users ↑ = buy
Instead:
Organic users ↑ + economic activity ↑ + fees/revenue ↑ + token value capture ↑ + dilution manageable + valuation reasonable = accumulation candidate.
That combination is much harder to fake and is much closer to what I'd want as a multi-year fundamental thesis.
Evaluating Layer 1 (L1) and Layer 2 (L2) tokens requires looking past hype and digging into fundamental economic activity. For a long-term accumulation strategy, you want to measure real usage, economic sustainability, and ecosystem momentum. Essential Fundamental Metrics - **Total Value Locked (TVL)** measures the…
Evaluating Layer 1 (L1) and Layer 2 (L2) tokens requires looking past hype and digging into fundamental economic activity. For a long-term accumulation strategy, you want to measure real usage, economic sustainability, and ecosystem momentum.
Essential Fundamental Metrics
Best Analytics Tools to Use
If you'd like, let me know:
I can help you apply these metrics to build a customized evaluation framework.
For a **long-term L1/L2 investment**, I’d treat TVL, revenue, and active users as a starting point—not as the thesis itself. The key question is: > **Is the network generating durable economic activity, and does the token actually capture some of that value?** ### My fundamental hierarchy
For a long-term L1/L2 investment, I’d treat TVL, revenue, and active users as a starting point—not as the thesis itself. The key question is:
Is the network generating durable economic activity, and does the token actually capture some of that value?
| Metric | Importance | What I look for |
|---|---|---|
| Revenue / tokenholder value capture | ⭐⭐⭐⭐⭐ | Growing organic revenue, not mostly incentives |
| Stablecoin supply | ⭐⭐⭐⭐⭐ | Persistent growth and real economic use |
| Active users | ⭐⭐⭐⭐ | Consistent users, especially repeat users |
| Economic/transaction volume | ⭐⭐⭐⭐ | Growth that isn't dominated by bots/incentive farming |
| TVL | ⭐⭐⭐ | Growing, diversified, sticky capital |
| Fees | ⭐⭐⭐ | Users actually paying for blockspace |
| Developer activity | ⭐⭐⭐ | Sustained builders/contracts, not just GitHub noise |
| Token valuation | ⭐⭐⭐⭐⭐ | FDV/market cap relative to actual economics |
| Token supply/unlocks | ⭐⭐⭐⭐⭐ | Low dilution and manageable future emissions |
TVL is useful because it indicates capital deposited into an ecosystem, but it can be highly incentive-driven. A chain with $10B TVL and declining organic activity can be less attractive than one with $2B TVL and rapidly growing users, stablecoins and fees.
I particularly like:
TVL growth + stablecoin growth + DEX volume + active addresses
moving together.
DefiLlama is excellent for this because its chain dashboards combine TVL, fees, revenue, volume, stablecoins, bridges and other metrics.
This distinction is critical.
Fees = what users pay.
Revenue = what the protocol/network actually retains.
Token Terminal explicitly separates these metrics and also tracks expenses, cost of revenue, gross profit and earnings.
For an L2, for example, I'd want to know:
sequencer revenue − L1 settlement/data-availability costs = economic profit
A network generating $20M of fees but spending $18M to operate is fundamentally different from one generating $20M while retaining $15M.
Then ask the most important token question:
How much of that economic value accrues to the token?
A great network can still have a mediocre token if the token captures little of the economics.
Daily active addresses are useful, but raw addresses can be misleading.
I prefer looking at:
Artemis provides DAU, transactions, fees, revenue, stablecoin market cap and developer metrics, among others.
One particularly useful ratio is:
Transactions / active address
because it gives you a rough indication of how intensely users are actually using the chain. Artemis specifically discusses this as a way to distinguish increasing activity per user from simple address growth.
For an L1/L2, I'd put stablecoin supply and stablecoin transaction volume surprisingly high on the list.
Why?
Stablecoins represent economic liquidity that can actually be used for:
A chain accumulating stablecoins while users, DEX volume and lending activity also increase is much more interesting than a chain whose TVL rises primarily because its native token price increased.
Millions of cheap transactions don't necessarily mean millions of dollars of useful economic activity.
Artemis has argued for looking at Total Economic Activity (TEA), which combines things such as settlement volume, DEX/NFT/P2P transfers, chain fees and MEV.
For comparing L1s/L2s, I'd therefore track:
Economic activity / market cap
and
Economic activity / FDV
rather than simply transactions/day.
This is where many crypto investors stop too early.
Suppose:
Chain A
Chain B
I'd probably investigate B much more aggressively.
Useful valuation metrics include:
Token Terminal explicitly provides valuation metrics such as P/F and P/S on both circulating-market-cap and FDV bases.
1. DefiLlama — ecosystem screening
Best for quickly comparing:
I'd start here to generate the shortlist.
2. Token Terminal — financial analysis
Best for standardized financial metrics across chains/protocols. It covers 100+ chains and thousands of projects and standardizes metrics such as fees, revenue, active users and expenses.
This is probably my favorite tool for answering "is this network actually becoming a business?"
3. Artemis — usage and ecosystem analysis
Excellent for:
It is particularly useful for comparing chains on a standardized basis.
If I were building a long-term accumulation model, I'd roughly weight it:
30% — economic growth
20% — users
15% — capital
15% — token economics
10% — valuation
10% — moat
I'd be cautious when I see:
Conversely, my favorite setup is:
Users ↑ + stablecoins ↑ + economic volume ↑ + fees/revenue ↑ + developers ↑ + token dilution ↓ + valuation still reasonable.
That's the combination I'd want before making a large long-term accumulation decision.
One final point: don't compare L1s and L2s using exactly the same accounting framework. An L2 can have enormous user activity while paying substantial costs to Ethereum for settlement/data availability, whereas an L1 has a different cost structure. Token Terminal's cost-of-revenue framework explicitly accounts for things such as L2 settlement costs, which makes this distinction particularly useful.
If you're building an actual portfolio, I can also give you a 10–15 metric L1/L2 fundamental scorecard with specific thresholds for "accumulate / watch / avoid" and show how I'd apply it to ETH, SOL, SUI, AVAX, NEAR, ARB, OP, BASE, etc.
For a long-term altcoin investor, evaluating Layer 1 (L1) and Layer 2 (L2) tokens requires shifting focus from speculative hype to economic reality . The most robust evaluation framework combines **Total Value Locked (TVL)** to measure liquidity moats, **Protocol Revenue** (fees retained minus incentives) to gauge…
For a long-term altcoin investor, evaluating Layer 1 (L1) and Layer 2 (L2) tokens requires shifting focus from speculative hype to economic reality . The most robust evaluation framework combines Total Value Locked (TVL) to measure liquidity moats, Protocol Revenue (fees retained minus incentives) to gauge sustainable business models , and Daily/Monthly Active Users (DAU/MAU) to verify organic product-market fit rather than sybil or mercenary farming activity . Crucially, you must cross-reference these metrics with fully diluted valuation (FDV) and upcoming token unlock schedules to ensure growth isn't offset by heavy supply inflation.
Key Fundamental Metrics for L1/L2s
Essential Analytics Tools
| Tool | Core Strength | Best Used For |
|---|---|---|
| DeFiLlama | Real-time ecosystem data | Tracking macro TVL, bridge inflows, and multi-chain liquidity distribution. |
| Token Terminal | Financial statement format | Evaluating P/E ratios, protocol revenues, and active user growth trends. |
| Artemis | Cross-chain fundamental data | Comparing developer traction, transaction counts, and stablecoin metrics across L1s/L2s. |
| Dropstab | Vesting and tokenomics | Auditing future supply inflation, cliff events, and unlocking schedules. |
| Dune | Custom SQL analytics | Drilling down into granular user behavior, smart contract retention, and real-world asset metrics. |
If you'd like, let me know:
I can put together a tailored fundamental breakdown for those assets.
For a long-term L1/L2 altcoin investor, I would treat **TVL, revenue, and active users as starting points—not investment theses**. The strongest projects usually show a combination of: 1. **real economic activity** 2. **growing user adoption**
For a long-term L1/L2 altcoin investor, I would treat TVL, revenue, and active users as starting points—not investment theses. The strongest projects usually show a combination of:
A useful framework:
| Category | Metrics to track | Why it matters | Red flags |
|---|---|---|---|
| Liquidity | TVL, stablecoin liquidity, bridge inflows | Shows capital trust and ecosystem depth | High TVL from incentives, mercenary capital |
| Usage | Active addresses, transactions, retention, fees paid | Shows real demand | One-day activity spikes from airdrops |
| Revenue | Protocol fees, chain revenue, earnings | Shows monetization | Revenue disappears when incentives stop |
| Token economics | FDV, inflation, unlock schedule, staking yield | Determines investor returns | Massive unlocks, weak value capture |
| Developer activity | GitHub commits, contributors, apps launched | Predicts ecosystem durability | Few builders despite hype |
TVL is probably the most common L1/L2 metric because it measures capital deployed in DeFi. Dashboards such as DeFiLlama metrics dashboard track TVL, fees, revenue, volumes, and chain comparisons.
However, I would not rank chains purely by TVL. Ask:
A better metric:
TVL / Market Cap
Example:
The second may be more attractively valued, assuming the TVL quality is comparable.
For long-term investing, revenue matters because blockchains are businesses competing for users.
Track:
Token Terminal is commonly used for comparing crypto networks using financial metrics such as revenue and valuation ratios.
Questions to ask:
A chain generating $50M/year but with a $100B valuation may be expensive. A smaller chain generating $20M/year with a $1B valuation may deserve more investigation.
Daily active addresses can be misleading.
Look at:
A chain with:
is usually weaker than:
Security
Economic activity
Developer ecosystem
Pay special attention to:
Ask:
"Would users still use this L2 if incentives disappeared?"
A good network can still be a bad investment if the token is overpriced.
Track:
Lower can indicate cheaper valuation.
Useful for comparing consumer-oriented chains.
A great chain can underperform if billions of tokens are released into the market.
Check:
DeFiLlama
Best for:
Token Terminal
Best for:
Artemis
Best for:
Dune Analytics
Best for:
Nansen
Best for:
If I were screening L1/L2 tokens for a multi-year hold, I would roughly weight:
40% — Adoption
25% — Economics
20% — Ecosystem strength
15% — Token design
A high-quality L1/L2 candidate often looks like:
✅ TVL growing without excessive incentives
✅ Stablecoin supply increasing
✅ Revenue increasing over multiple quarters
✅ Users returning after incentives end
✅ Developers building consistently
✅ Token valuation reasonable relative to usage
✅ Clear reason the token captures ecosystem growth
The biggest mistake is buying the chain with the most hype. The better approach is usually finding networks where usage is growing faster than valuation expectations.
Evaluating Layer 1 (L1) and Layer 2 (L2) tokens requires looking past hype and assessing the actual economic engine of the chain. As a long-term investor, your focus should be on sustainable demand, security budgeting, and user retention. Essential Fundamental Metrics - **Total Value Locked (TVL)** : Measures the…
Evaluating Layer 1 (L1) and Layer 2 (L2) tokens requires looking past hype and assessing the actual economic engine of the chain. As a long-term investor, your focus should be on sustainable demand, security budgeting, and user retention.
Essential Fundamental Metrics
Top Analytics Tools
If you'd like, let me know:
I can break down a customized evaluation framework for those networks.
