One of our posts already had information about TVL, what this | 9RD Analytics

One of our posts already had information about TVL, what this metric is and how to use it. TVL is the main metric with which to compare other financial indicators of a crypto project.
When we analyze networks that have a volume of locked funds, we use the network's fees to TVL ratio. What information can such a ratio give us?
Recall, TVL is the amount of capital raised in the network. This is the funds locked in staking and in various Dapps (if we are talking about blockchain), etc. That is, all of the assets that are currently in a particular network.

For each transaction, the network charges a fee, which is the network's revenue. It can then dispose of this revenue as it sees fit. Often networks share part of their fees with their token holders or with stackers (e.g., Curve). They can reward validators or buy their tokens off the market. This is not important in the context of this post. What is important to understand is that fees are revenue for the network.
So the Fee/TVL ratio shows how effectively the network uses the attracted capital. For example, if TVL=$1 billion and the network's daily revenue is $10000, it is easy to calculate that the efficiency equals 0.001%.
One could argue that many networks strive to set the lowest fees, and this would decrease the Fee/TVL ratio. Right, but in that case, the network should strive to increase the number of transactions.
The TVL of the two largest financial protocols, Curve and Uniswap, was $3.8bn and $3.36bn, respectively, as of mid-December 2022. That is, approximately the same. And Curve's swap volume for the year was $33.09 billion, and Uniswap's was $530.5 billion. 16 times higher! And Curve's fees revenue for 2022 was $108.8 million and Uniswap's was $780.8 million.
That's even though Uniswap's fees are higher. The conclusion is that there are reasons why Uniswap is more attractive to its customers.

P.S. The data is taken from our Curve Finance analyst report. If you're interested in getting the full report, contact @vlt99.

#TVL