Fundamental Pricing of Utility Tokens

Julien Prat, Vincent Danos and Stefania Marcassa
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Julien Prat: CNRS - Centre National de la Recherche Scientifique
Vincent Danos: CNRS - Centre National de la Recherche Scientifique
Stefania Marcassa: THEMA - Théorie économique, modélisation et applications - CNRS - Centre National de la Recherche Scientifique - CY - CY Cergy Paris Université

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Abstract: We propose a framework for the fundamental valuation of utility tokens. We introduce a requirement that is reminiscent of the cash-in-advance constraint, stipulating that services have to be accessed immediately. Our model endogenizes the velocity of token circulation, yielding a microfounded pricing formula that we calibrate using Ethereum's adoption data. The equilibrium price path goes through two successive phases: Initially, a portion of the tokens are held for purely speculative motives, and later on, all tokens are held with the intention of being used.

Keywords: Asset pricing; utility token; Blockchain; cryptocurrency; ICOs; platform (search for similar items in EconPapers)
Date: 2025-02-12
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Published in Management Science, 2025, ⟨10.1287/mnsc.2023.00566⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04956178

DOI: 10.1287/mnsc.2023.00566

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