What To Look At In A Crypto Project To See How Much It’s Worth, with Ledger

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The success of a crypto project is dependent on its users: projects need people to succeed. Just imagine having the only phone in the world – it’d be pointless without anybody to call. But as more people buy phones, each one becomes more useful, and the value of the phone network increases. Crypto projects thrive on these “network effects.” In fact, that’s one way to value them – so here’s how to do just that.

1. Active wallet addresses

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This is an intuitive way to assess a project’s network: simply compare its active wallet addresses with other projects. And while more addresses doesn’t always mean more users – as some could have more than one address – it does show increased adoption.

If the crypto’s price trends down while its addresses trend up, that could be an opportunity. Take the Ethereum chart below, where wallet addresses continued to climb throughout the 2018 bear market.

Ethereum unique wallet addresses vs. ETH price. Source:

2. Network transactions

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More transactions also suggests a growing network value. That said, be wary of spikes in transaction numbers: it could be a sign of unsustainably high trading volumes. You’re looking for a gradual, steady growth in transactions over time.

Daily ethereum transactions vs. ETH price. Source:

3. Total value locked

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As the name suggests, “total value locked” (TVL) is the total value of assets locked inside the smart contracts of a DeFi protocol – that’s funds users have deposited for things like trading liquidity or lending collateral. The higher the TVL, the higher the adoption of a DeFi project.Total value locked in Layer 1 DeFi smart contract addresses. Source:

We can also work the current market size of a project into the TVL data. The “market cap to TVL ratio” divides a DeFi project’s market capitalization by its TVL. All else equal, a lower ratio suggests a project is a better bargain. Based solely on this metric, Fantom and Terra are currently the most undervalued Layer 1 DeFi protocols.

Market capitalization to TVL ratio. Source:

4. 🤩 Crypto security never look so good

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When it comes to your digital investments, safety comes first. Of course, it’s always a bonus when safety comes wrapped in a pretty little package.

Just like the nifty Nano S Plus: Ledger’s latest secure wallet comes with more memory, so you can manage over 5,500 digital assets and install more than 100 apps. Check out Ledger’s Nano S Plus.

5. Developer activity

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A rising user base isn’t the only thing that grows a network’s value: developer activity is important too. And since crypto projects are open source, you can see the level of developer activity in the number of new code “commits” to a project on GitHub.

Number of github commits by developers per crypto project. Source:

6. Other considerations

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When comparing different datasets, you should also consider a project’s use cases, as well as where it sits in the broader crypto ecosystem. Compound, for example, is a decentralized application (dapp) that lets lenders earn interest on their crypto. But the Compound dapp is built on the Ethereum blockchain, so it wouldn’t make sense to compare the metrics of Compound with those of Ethereum.

Key takeaways:

  • Crypto projects thrive on user growth, so you can get a good idea of a project’s value just by looking at its network.
  • Wallet addresses, network transactions, total value locked in smart contracts, and developer activity are all good things to consider.
  • When assessing the network effects of a project, take their use cases into account too.

This guide was produced in partnership with Ledger.

Check out Ledger’s mini-website at

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