The valuation paradox of a leading DEX protocol: hidden $100 million annual loss under a 240x P/E ratio

TokenSherpa · 2026-01-07T06:32:17+00:00

After activating the fee switch, a leading DEX protocol's valuation reached $5.4 billion, but its annualized fees are only $23 million, making the valuation 240 times the fees. It is expected to incur a loss of approximately $100 million this year, indicating that its revenue model and cost structure urgently need adjustment.

TokenSherpa

2026-01-07 06:32:17

Abstract generation in progress

【Blockchain Rhythm】Let’s talk about an interesting topic. After a certain leading DEX protocol turned on the fee switch, the gap between its valuation and actual revenue is quite large—currently, the FDV reaches $5.4 billion, but the annualized fee income is only $23 million. In other words, the valuation is 240 times the annualized fee income.

And that’s not all. Let’s look at this year’s operating costs. The protocol plans to spend 20 million tokens on incentives and operational grants this year. At the current price of $6.16, that amounts to $123 million in expenses.

Breaking it down, it’s quite painful—using $23 million in annualized revenue to offset $123 million in costs is clearly insufficient. It is estimated that over the course of this year, the protocol will record a loss of about $100 million.

From this data, we can see that although turning on the fee switch is an important progress, the protocol’s revenue model and cost structure still need further adjustment.

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ValidatorViking

· 01-07 07:02

yeah 240x revenue multiple is basically cope at this point, ngl... that's not a protocol, that's a burning machine with good marketing lmao

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AirDropMissed

· 01-07 07:01

240x P/E ratio? Can you still watch this? Do they really think retail investors are fools? Losing 100 million and still dare to ask us to pay transaction fees, this logic is really incredible. So in the end, tokens still have to fall, there's no other way out.

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0xSherlock

· 01-07 06:58

240x P/E ratio? Isn't this a typical case of "wearing boxers as a shirt," eventually getting exposed. Losing 100 million to boost ecosystem popularity—calculate whether this is worth it. It's just another tactic of stacking incentives; where's the real cash income? Only when the fee switch is turned on do you realize how dire it is—previous consensus was a bit fragile. With such fierce DEX competition, burning money to buy market share has no future. What happened to the promised sustainability? Now it all just seems like a story.

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LightningHarvester

· 01-07 06:52

This is a typical Web3 illusion. Turning on the fee switch makes you want to tell a valuation story, but the ledger is right here. A loss of 100 million USD—who can withstand that? Honestly, it's still the inability to stop incentives. Once they stop, the ecosystem withers. But to be fair, it's already impressive that this model has lasted until now. After all, not all DEXes dare to face this awkward situation directly.

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TradFiRefugee

· 01-07 06:40

Haha, really, this data looks a bit grim. A 240x PE and still burning money? --- Wait, a $100 million loss? How much incentive do they need to cut... --- It's funny, with revenue of only $23 million, they have to cover $123 million in expenses. Isn't this just relying on new token issuance to fund the operation? --- So, DEX still depends on LSD and leverage to survive; just collecting fees is far from enough. --- Web3 is typically full of ideas but weak in revenue generation. First, tell a good story. --- I just want to know when it will stop relying on token incentives to get itself moving... --- A 240x valuation burning $100 million, how should they tell the story in the next funding round? --- Forget it, I won't look anymore. Anyway, it all depends on airdrops. --- Setting aside losses, protocol stickiness is really an issue. Once incentives stop, liquidity evaporates immediately.

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SerLiquidated