SUSHI, the native trademark of SushiSwap, is up 73% in the past four days. However, some investors believe that the DeFi token may have a lot more wiggle room.
SushiSwap is an automated market maker (AMM) that allows users to trade cryptocurrencies decentrally on the Ethereum blockchain.
SUSHI / USDT 15-Minute Price Chart (Binance). Source: TradingView.com
Why is SUSHI undervalued at $ 2 billion?
SUSHI’s market cap reached $ 2 billion as the price exceeded $ 16. However, there are three main reasons it could still be undervalued.
First, its direct competitor, Uniswap, has a market cap of around $ 6 billion despite the diminishing measurement gap. Second, compared to traditional companies, SushiSwap has an attractive price-performance ratio. Third, the DeFi market is generally performing strongly, with the Total Value (TVL) now exceeding $ 30 billion.
In particular, SushiSwap’s TVL is approaching $ 3 billion and currently sits between Curve Finance and Synthetix as the sixth most popular DeFi platform.
Total value locked in DeFi. Source: Digital Assets Data
Meanwhile, a pseudonymous DeFi analyst named “DCF GOD” compared SushiSwap to traditional companies like Shopify.
He said if SushiSwap were compared to these companies on its earnings, SUSHI would be valued at $ 1,530. He explained:
“GMV (Daily Trading Volume) is $ 500 million. Revenue (daily fees) is $ 1.2 million. On an annual basis, that’s $ 182 billion GMV and $ 440 million Rev. sushi stakers making a portion of that revenue. So add a 10% market cap which is $ 2 billion ($ 15.30 / sushi). Shopify seems like a good comparison since GMV is only $ 150 billion in sales. GMV equates to a market capitalization of $ 190 billion (1.2x). By the same metric, Sushi should be a $ 200 billion company ($ 1530 / sushi). “
The analyst emphasized that SushiSwap can be compared to Shopify and Beyond Meat. Although the two companies are in different sectors, they both have cash flow, just like SushiSwap.
One of the most compelling things about DeFi is that it can measure the rating of key logs using cash flow and quantifiable data.
In this way, analysts can draw a substantial comparison between conventional companies and DeFi projects. The analyst added:
“All you have to ask yourself is,” Does an exchange that processes hundreds of billions of dollars create more value than peas and chemicals compressed into meat? ” Yes, it does.”
What’s next?
Analysts assume that SUSHI will close the valuation gap to Uniswap (UNI) in the foreseeable future.
As SUSHI approaches UNI, the price of SUSHI could be anywhere from $ 40 to $ 60, considering that Uniswap is worth around $ 6 billion.
Analysts at intotheblock said SushiSwap has seen increased momentum and shows signs of fundamentals strengthening. They declared:
“SUSHI was unstoppable. And just as the token continues to gain momentum, we’ve seen some impressive metrics from the @SushiSwap protocol. In the last 7 days: – 2.83 billion USD trading volume (> 400 mm daily average) – The provided liquidity increased by 10% – currently 2.27 billion USD. “
If the volume and user activity on SushiSwap continues to increase, there is a strong likelihood that SUSHI will come closer to Uniswap’s rating.
