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Onchain Economics
Metrics

Capital Efficiency

A measure of how effectively deployed capital generates returns or supports activity.

In-Depth Explanation

Capital efficiency = Output / Capital Deployed. For DEXs, it's volume per dollar of TVL. Uniswap v3's concentrated liquidity dramatically improved capital efficiency over v2. For lending, it's utilization rate. Higher capital efficiency means better returns for LPs and lower costs for users. It's a key competitive metric.

Related Terms

Total Value Locked

TVL

The total value of crypto assets deposited in a DeFi protocol or across all of DeFi.

Trading Volume

The total value of assets traded on a protocol over a given time period.

Utilization Rate

The percentage of deposited assets in a lending protocol that are currently borrowed.

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Total Value Locked

TVL

The total value of crypto assets deposited in a DeFi protocol or across all of DeFi.

Protocol Revenue

Fees collected by a protocol that accrue to the protocol itself or its tokenholders, rather than to liquidity providers or other participants.

Take Rate

The percentage of transaction volume or fees that a protocol captures as revenue.

Fees

Total fees generated by activity on a protocol, regardless of who receives them.

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