Validators process transactions and receive fees from users (supply-side fees).

Cardano is a smart contract platform for decentralized applications (a blockchain). Cardano was founded by Charles Hoskinson & Jeremy Wood and launched in 2017.

ADA holders own and govern the protocol. They currently do not take a cut of the total transaction fees paid by users (revenue).

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Cardano

# Cardano P/S ratio (circulating) Methodology

## 1. Overview

P/S ratio (circulating) is a measure of the Cardano circulating market cap relative to the annualized revenue retained by the network. Valuation is assessed based on the portion of user-paid fees captured by the protocol. This metric is utilized to evaluate the market value of Cardano in the context of its economic throughput.

## 2. Data sources

- **Revenue**: Derived from the Revenue metric
- **Circulating market cap**: Derived from the Circulating market cap metric

## 3. Step-by-step calculation

### Component A: Annualized revenue calculation

- **Purpose**: Project daily revenue to an annual figure for valuation comparison
- **Logic**: Daily revenue is multiplied by 365 to determine the annualized revenue. This projection is used to represent the yearly fee capture based on the network's current performance.

### Component B: P/S ratio (circulating) derivation

- **Purpose**: Calculate the valuation multiple relative to annualized revenue
- **Logic**: The circulating market cap is divided by the annualized revenue. The circulating market cap is calculated as the product of the end-of-day ADA price and the circulating ADA supply. All currency values are normalized by decimal precision and denominated in USD. Prices are sourced from end-of-day asset price feeds.

*This methodology was automatically generated by Token Terminal's methodology analyzer.*

${market_cap_circulating} / (rolling_avg(${revenue}, 30) * 365)

Circulating market cap relative to annualized revenue.

CardanoADA

P/S ratio (circulating)

P/S ratio (circulating)

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