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My preferred mental model for thinking about crypto (in particular defi) token marketcaps. I call it Active Participant Expected 2Yr Break Even or APE2BE for short.
The idea is to ask what someone actively staking/bonding/deathpooling/governing would need the marketcap to be 2 years from now in order to breakeven on their investment (can also multiply by a discount rate to bring back to present $ if you want).
Ex: Suppose you own 1000 out of 1 million tokens worth $1, and at the end of 2 years, an active participant will have 1500 out of 2 million tokens. Then in order to breakeven, you need price at the end to be $0.666 which means APE2BE = $0.666 * 2 million = $1.33m
This should match our intuition, which is that using current marketcap $1m for that token is a bit too optimistic (50% of the extra supply is going to non token holders!) and fully diluted valuation of $2m is a bit too pessimistic (50% of the inflation is going to us!)
APE2BE has several nice properties. First of all, it equals usual marketcap when the token is already at max supply.
Second, it equals fully diluted valuation for tokens that don't give out any rewards to current token holders and release all their inflation/lockups within 2 years. So it is properly pessimistic for the shitcoin waterfall token.
Third, it gracefully handles PoS type tokens that give all their inflation to existing token holders (will usually end up close to current marketcap).
Fourth, it does OK with tokens that have inflation going far into the future or no max supply at all.
Fifth, it lets you properly account for tokens that are *currently* rewarding active participants far more than your discount rate.
All this means that in general APE2BE is something that is more flexible and makes it easier to compare projects with very different tokenomics to one another.
Of course, there's nothing special about 2 years, you can pick any time frame, though 2 years is a pretty reasonable timeframe for a lot of crypto investments. Besides, APE6BE just doesn't have quite the same ring to it.
The big downside is that APE2BE can be a pain to calculate exactly as it requires a lot of estimations and guesswork. But I prefer something that is usually wrong by a little bit than MC or FDV that is sometimes horribly horribly wrong.
