On-Chain Cash Flow Modeling

On-chain Cash Flow Modeling is the practice of tracking and projecting the movement of value through a blockchain protocol using public ledger data. Unlike traditional financial statements, this modeling relies on transparent, real-time transaction data available on the blockchain.

Analysts use this to calculate metrics such as total value locked, protocol fees, and user growth rates. This model provides a factual basis for fundamental analysis by showing exactly how much value is captured by the protocol.

It allows for the construction of dynamic valuation models that update as on-chain activity changes. By monitoring these flows, investors can identify trends in protocol adoption and revenue sustainability.

It is a cornerstone of modern quantitative analysis in the digital asset space.