User Lifetime Value

User Lifetime Value (LTV) is a prediction of the total revenue a protocol can expect from a single user throughout their relationship with the platform. In the context of decentralized finance, this involves estimating the fees a user will pay over time.

LTV is a critical metric for determining how much a protocol should spend on user acquisition. If the cost of acquiring a user is higher than their LTV, the business model is unsustainable.

By calculating LTV, developers can better allocate their marketing and development budgets to focus on high-value users. It provides a strategic view of the protocol's growth potential and its ability to build a loyal customer base.

This metric is essential for transitioning from a speculative project to a mature, profitable financial platform.