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Fundamental Pricing of Utility Tokens

Author

Listed:
  • 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)

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.

Suggested Citation

  • Julien Prat & Vincent Danos & Stefania Marcassa, 2025. "Fundamental Pricing of Utility Tokens," Post-Print hal-04956178, HAL.
    • Handle: RePEc:hal:journl:hal-04956178
    DOI: 10.1287/mnsc.2023.00566
    as

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