Market-based valuation determines the value of assets based on current market prices, considering supply and demand dynamics and recent transactions. Income-based valuation, on the other hand, focuses on the potential income or cash flow generated by an asset, estimating future earnings and discounting them to present value. Market-based valuation is commonly used for tangible assets, while income-based valuation is useful for intangible assets and long-term contracts. Both methods provide valuable insights, depending on the nature of the asset and the context of the valuation.