Network

Remember: Blockchain technology is a distributed ledger that connects a decentralised network on which users can send transactions and build applications without the need for a central authority or server.

When analysing a network, its distribution factor and value transaction ratio can help understand the coin’s supply and value, respectively.

The Network Distribution Factor (NDF) is a concentration measure. It is calculated as the ratio of supply held by addresses with at least one ten-thousandth of the current supply of native units to the current supply. A high NDF means supply is very concentrated. On the other hand, a low NDF means supply is very distributed.

The ratio of the network value (or market capitalization, current supply), also referred to as NVT, divided by the adjusted transfer value. This is a valuation measure and a high level shows that the coin has a large market cap, compared to its traded flow, and it is then considered expensive. A low level shows that the coin has a small market cap, compared to its traded flow, and it is then considered cheap. It can be thought of as the rough price to book ratio for crypto assets.