New Models for Utility Tokens

Aside from being productive capital assets, you have likely heard some variation of these two other buckets for assets (neither of which are necessarily mutually exclusive with each other or capital assets):

• Consumable / Transformable Asset – Sometimes also classified as commodity or utility value. Cryptoassets offer infinitely programmable, fast,

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So far, this post has focused almost exclusively on tokens’ ability to capture value by generating income streams for their holders. They are productive capital assets. This may very well be sufficient to value most tokens in the long-run. Equity-like analysis will do the trick here. Think DCF and DDM.

However, valuing tokens based on cash flows rem... See more

1. UtilityThe utility is probably the most important factor in a crypto project’s tokenomics.Even if a token is deflationary, has the best price stability mechanisms, distribution, as well as a decentralized and highly efficient on-chain governance process, it won’t be worth too much if it is not used for anything.

In this third part, I’m going to cover utility. Utility is a subsection of the Demand side of the tokenomics equation. Even if a token has a great supply model, it still needs a good reason to exist and for people to hold it. Without those, there will be no demand for it, and no one will buy or hold it.