$RAY, the native utility token of the Radium DEX on Solana, could be significantly undervalued compared to $UNI, the token of Uniswap, according to an analysis by Sonyasunkim.
Here’s a breakdown of their findings on the two DEX giants in terms of fundamentals, valuations, and potential reasons for mispricing.
Fundamentals:
Despite $RAY’s daily trading volumes being 50% of $UNI’s, the fee structure is quite different. Radium charges 25bps fees, with 22bps going to liquidity providers (LPs) and 3bps used to buy back $RAY tokens. Uniswap, on the other hand, charges approximately 13bps, all of which go to LPs. Even with higher inflation, $RAY has shown remarkable revenue growth, with a 761% compound annual growth rate (CAGR) since November 2022.
Valuation:
$RAY’s market capitalization (MC) is just over 10% of $UNI’s. When comparing their market capitalization to fees ratios (similar to a price-to-earnings ratio), $UNI sits at 6.7x while $RAY’s is a mere 1.4x. With a market capitalization to revenues ratio of less than 17x, $RAY appears to be significantly undervalued given its robust triple-digit growth.
Reasons for $RAY Mispricing:
Several factors could explain why $RAY seems mispriced:
– Trading on the Solana network is perceived as unsustainable.
– Uniswap enjoys a strong brand and trust in the market.
– Many liquid investors are overlooking $RAY.
– Concerns about $RAY’s token issuance might be causing hesitation.
Key Takeaways:
$RAY demonstrates strong growth and revenue, making it appear undervalued compared to $UNI. If Solana’s DEX trading volume continues to rise, $RAY could experience significant upside. While $UNI benefits from strong brand recognition, it lacks direct value accrual to its token holders.
3/ Project 1 – $RAY
A potential way to capture $SOL's dominance is through Raydium.
As a leading DEX on Solana, $RAY stands to benefit from growing attention on Solana.
What’s intriguing is that $RAY seems mispriced compared to $UNI 👇
— Crypto, Distilled (@DistilledCrypto) July 26, 2024
In conclusion, $RAY’s impressive growth metrics and undervaluation suggest it could be a hidden gem in the DEX market, particularly as attention on Solana continues to increase.
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.
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