Concerns have been raised about why some projects are good yet do not add value to their coin. Indeed, a project with a large income does not necessarily imply a project with a high return on investment. One of these could be the source of the problem: the project is not lucrative (in terms of revenue and profit), profits are not distributed to token holders (not LPs), and the profit distribution method is flawed. This article will investigate the top revenue projects to find out if we are overestimating the term “revenue” in the crypto industry.<h2>Ethereum's revenue</h2>As of August 7, Ethereum is reported to have generated $1.96b in revenue in the last 180 days. This is incorrect. If we consider the Ethereum Foundation to be the "founder" of this firm, it profits nothing from the network's ongoing prosperity. Their entire business model is based on carefully managing their Ether holdings and selling at the top of the market (which they do well). Calling it "revenue" when all of the money goes to miners renders the entire amount meaningless when attempting to evaluate the token itself. This becomes more fascinating with Ethereum 2.0, but that story belongs to the future. All of the revenue of Ethereum now is not distributed to the token holders. Therefore, the revenue does not mean much. Burning Ether on every transaction is a great little addition, however, it doesn't really affect the token price.<h2>Revenue of OpenSea</h2>They've made around $281m in revenue in the last 180 days. As of August 1st, they had roughly 750 employees (according to LinkedIn), if we assume that each labor costs $150,000 per year (on the high end), we get to $112.5m in headcount every year.<img src="https://cdn.builder.news/news/11ed22af64058489a8e6023f659fee92.jpg" alt="opensea-revenue" title="opensea-revenue" width="600" height="607" class="lykafe0">Given their annualized sales of more than $755m, they should be alright. It is not clear how bear markets have evolved, there is a likelihood that cutting off 20% of their workforce was part of ensuring their viability. So, it appears that we have a winner. However, there's one problem: they don't have a token. Congratulations, OpenSea stockholders, you are the winners. But in terms of token investment, this high profit is meaningless.&gt;&gt; You might be interested in&nbsp;<a href="https://www.builder.news/crypto-insights/opensea-and-top-5-major-competitors" alt="OpenSea and top 5 major competitors" title="OpenSea and top 5 major competitors" target="_blank" rel="" class="">OpenSea and top 5 major competitors</a><h2>LooksRare's revenue</h2>With $230m in the last 180 days, LooksRare is the third greatest candidate on the list. We shall investigate their protocol income first, followed by their incentives. Guess what? They're precisely interrelated, and incentives always take precedence over revenue.<img src="https://cdn.builder.news/news/11ed22af64058a6fa8e6023f659fee92.jpg" alt="looksrare revenue and incentives" title="looksrare revenue and incentives" width="600" height="330" class="lykafe1">As we can see from the chart, the emission (token incentive) the project gave out was really huge. These funds strongly boosted the protocol usage which results in high protocol revenue (topping at $10m in February). However, as the incentives gradually diminished, the revenue went down just the same. In mid-May, the daily revenue and the token incentive dropped significantly to just half a million dollars.This is essentially a failed firm that spends a lot of money on client acquisition but has very little retention to show for it. It is likely that anyone who supports this thing will be rekt: an unprofitable firm with no road to profitability and reduced growth.<h2>Revenue of dYdX</h2><img src="https://cdn.builder.news/news/11ed22af64058daaa8e6023f659fee92.jpg" alt="dYdX whitepaper revenue" title="dYdX whitepaper revenue" width="600" height="160" class="lykafe2">dYdX is next on our list, with $214m in "revenue" in the last 180 days. In general, this is a false figure since it incorporates two key assumptions. The first is that a large portion of such "income" goes to lenders rather than dYdX token holders. The next point to notice is that the 5% charge listed in their documents is paid to an insurance fund rather than token holders. The dYdX team has been quite open about this, mentioning it in a tweet shortly after the token went live.&gt;&gt; Let's discover&nbsp;<a href="https://www.builder.news/crypto-insights/top-no-kyc-crypto-exchanges" alt="Top 10 No-KYC crypto exchanges" title="Top 10 No-KYC crypto exchanges" target="_blank" rel="" class="">Top 10 No-KYC crypto exchanges</a><h2>Avalanche's revenue</h2>They allegedly made $78m in the last 180 days. This is false, as it was in the case of Ethereum because Ava Labs or the Avalanche foundation and token holders make no money from transaction fees. Every transaction consumes a little amount of AVAX, however, this amount is insignificant and has no major impact on price/value. Furthermore, Ava Labs has approximately 100 employees, which equates to at least $10 million in the annual burn. The only method to do so is to sell tokens on the market or raise funds from investors. This is not a road to true sustainability. Once again, this kind of revenue doesn’t say much.<h2>Metamask's revenue</h2>Metamask has had around $66m in revenue for the last 180 days (as of August 7). You already know what is going on here at Metamask. Because they lack a token, all of those yummy fees do not accrue to token holders. Now, because this graph has presumably been seen by a large number of market participants, they'll perform some quick arithmetic and say that Metamask has about $120m in annual revenue, assuming that every project has a 50x valuation multiple of their annual revenue. The Metamask valuation should be worth $6b. The verdict is yet out, but once the token is out, it will be interesting to see how much these fees hold up and what fraction is bots. Regardless, none of this matters to us because they lack a token.<h2>Pancakeswap's revenue</h2>Pancake Swap has earned $63.7m in the last 180 days. For those who are unaware, Pancake Swap is a Binance Smart Chain DEX where people often trade BSC project tokens. This is certainly one of the best cases on this list. According to their terms in the whitepaper, there is a 0.25% fee on each trade. 0.17% is distributed to LPs, 0.3% is distributed to the Treasury, and 0.5% is distributed to token holders via a purchase and burn. In this situation, it means that token holders and the Treasury have received $60 million in the last 180 days, which is quite outstanding. CAKE, the native governance token, is currently trading at $3.4 billion FDV, implying a roughly 27x P/E.<img src="https://cdn.builder.news/news/11ed22af64059106a8e6023f659fee92.jpg" alt="pancakeswap tokenomics" title="pancakeswap tokenomics" width="600" height="343" class="lykafe3">Go into the next level of detail and see if there are emissions. In CAKE tokenomics, we can see clearly that there is 350,000 CAKE minted daily which is around $1.2m. This high rate of emissions once again makes this meaningful revenue less attractive.&gt;&gt; Read more about&nbsp;<a href="https://www.builder.news/crypto-insights/best-decentralized-exchanges-to-follow" alt="7 best decentralized exchanges to follow" title="7 best decentralized exchanges to follow" target="_blank" rel="" class="">7 best decentralized exchanges to follow</a><h2>MakerDAO's revenue</h2>MakerDAO is likely the last one we discuss because it represents a fresh scenario in our list. The product is really wonderful and serves as the foundation for the entire industry. There has been $26.3m in protocol revenue in the last 180 days. However, they have two significant issues that bother us. The first is that they spend close to $40m-$50mmillion per year, thus they may only be breaking even with a profit of around $10m if everything goes smoothly. The second issue is that they have a buy-and-burn mechanism that happens in real-time, which stinks once further because when the market goes up, MKR goes up, and fees go up, but the volume of MKR acquired with fees is little.ConclusionIn the traditional stock market, the ratio for valuing a firm that compares its current share price to its earnings per share is called the price-to-earnings ratio (EPS). Investors and analysts use P/E ratios to assess the comparative value of a company's shares in an apples-to-apples comparison. It can also be used to compare a company to its past performance or to compare broad markets over time or to one another.In a nutshell, the P/E ratio indicates how much the market is ready to pay for a stock now based on its previous or projected earnings. A high P/E ratio may indicate that a stock's price is excessive relative to earnings and may be overvalued. A low P/E ratio, on the other hand, may imply that the present stock price is low in relation to earnings. However, this does not hold true in the crypto market, the revenue does not speak much about how well the project is doing since the revenue does not accrue value to the token holder as it does to shareholders in the stock market.As you can see from all of these instances, almost nothing on this list is substantial or makes sense at scale. Each of these models has a key weakness that everyone appears to miss, and very few sources will delve into the intricacies to grasp the assumption and check if the entire model holds up.Investors are often oblivious to/unwilling to seek out and scrutinize data. Builders aren't thinking critically about how value flows, nor are they focusing on true core value. Until we think about these concerns and have more open discussions about them, we will be locked in a model where we can buy many tokens but very few real businesses.Written by Blue Pine<div class="pr-block-special">Disclaimer: This article is intended for and only to be used for reference purposes only. No such information provided constitutes advice or a recommendation that any investment or trading strategy is suitable for any specific name.</div>

Let's investigate the top revenue projects to find out if we are overestimating the term “revenue” in the crypto industry.

Revenue: Does This Term Even Matter?