A note on the dynamic adoption and valuation theory in tokenomics

Zhuyi Shen, Shibo Wang and Jinqiang Yang

Finance Research Letters, 2023, vol. 56, issue C

Abstract: This paper employs the Pareto distribution to model participants’ transaction types in the dynamic digital platform adoption and valuation theory. By closed-form solutions, we derive the analytical condition determining whether the tokenized economy exhibits faster adoption than the numeraire economy. We generalize the conclusion of Cong et al. (2021) that the user adoption is faster in the tokenized economy than in the numeraire economy because of endogenous appreciation expectation based on their numerical analysis. Conversely, when the volatility effect of platform productivity outweighs the growth effect, the adoption rate of the tokenized platform is slower due to depreciation expectation.

Keywords: Cryptocurrency; Numeraire; Tokenomics (search for similar items in EconPapers)
JEL-codes: E41 E42 G12 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:56:y:2023:i:c:s1544612323004191

DOI: 10.1016/j.frl.2023.104047

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