Framework

-Network Valuation: While some have proposed equations for valuation of protocol tokens, each token is unique and needs to have specific analysis done to evaluate it.

-Cash Flow: Internet companies are valued based on revenue and profit. Blockchain companies don’t have revenue or profit, they are valued based on use of their network.

Valuation: Cash Flow vs. Network Valuation

-Tokens: With data monopolies non-existent, blockchains use network tokens as an incentive instrument that captures value for the open network.

-Equity: Companies (Google, Amazon, Facebook) captured value during the internet revolution by controlling and containing the data originating from their platforms

Value Capture: Equity vs. Tokens

-Open Networks: The blockchain industry is building open protocols that underlie the products built on top of them.

-Companies: The internet industry was previously fueled by companies building closed products and services on top of free, open source protocols.

Value Creation: Companies vs. Open Networks