L1 & L2 TOKEN VALUE CAPTURE

Summary from the TLDR Crypto newsletter

This article introduces new financial metrics for evaluating crypto networks, including Total Economic Value (TEV), Real Economic Value (REV), and Token Holders' Net Income, emphasizing the distinction between network economics and token holder economics. It challenges common misconceptions about network profitability, particularly regarding proof of stake issuance, and indicates that L1 and L2 networks have similar profitability calculations for token holders. While the article focuses on income-generating aspects of blockchains, it also acknowledges additional value capture mechanisms like utility value and store-of-value properties, highlighting the complexity of a comprehensive and quantitative token valuation.