2025-12-30 04:22:51

Assessing the true profitability of a crypto project hinges on understanding one key figure: net contribution revenue.

How to calculate it? It's actually simple—revenue captured by the treasury minus all costs. These costs include infrastructure, security audits, legal compliance, employee salaries, contractor fees, and various operational expenses.

But there's a common pitfall here: high trading volume, high TVL (Total Value Locked), and market buzz—these flashy numbers don't necessarily equate to income. Unless the protocol itself can truly retain fees, these metrics are just vanity indicators.

There's also a frequently overlooked real cost—token incentives and various subsidies. Don't treat these as free "growth hacking" perks; they are tangible economic costs that directly erode net contribution.

So next time you evaluate a project, peel back the surface prosperity and work backwards from this perspective to see whether the project is genuinely profitable or just burning cash.

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DancingCandles

· 2h ago

That's so true. Most projects that hype up TVL in the market are just burning investors' money, stacking data with subsidies. To put it simply, it's about whether they can truly become self-sustaining. Don't be fooled by vanity metrics. This is the correct way to evaluate a project. Unfortunately, 99% of people are still fixated on leaderboard rankings.

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LiquidationAlert

· 2h ago

Got it, another article exposing vanity metrics, but the problem is that most people simply don't want to see the truth... Basically, it's just about doing the math, but unfortunately 99% of project teams are reluctant to reveal the true costs. The token incentives part is really ridiculous, burning money while calling it "ecosystem growth," hilarious.

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SatsStacking

· 2h ago

Got it, it's the same old story. When TVL is high, everyone starts bragging. This time, someone finally called it out clearly. How many projects can truly make money? Most are just burning investors' money. The token incentives part is the funniest; dressing subsidies up as growth hacking. Wake up, everyone. Those who only look at surface data should be cut once. If the protocol can't retain fees, it's just an empty shell. Simple and straightforward, but effective.

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ruggedNotShrugged

· 2h ago

Good grief, another article in the "Look at how your shiny numbers are fake" series... but it really hits the mark. TVL is just a big joke; I’ve seen so many projects die right here. The part about token incentives is correct; too many people think burning money equals growth. Wake up, everyone.

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DEXRobinHood