1 option
Tokenomics : Dynamic Adoption and Valuation / Lin William Cong, Ye Li & Neng Wang.
- Format:
- Book
- Author/Creator:
- Cong, Lin William, author.
- Li, Ye, author.
- Wang, Neng, author.
- Series:
- Working Paper Series (National Bureau of Economic Research) ; no. w27222.
- NBER working paper series ; no. w27222
- Language:
- English
- Subjects (All):
- Assets (Accounting).
- Electronic funds transfers.
- Physical Description:
- 1 online resource (35 pages) : illustrations (black and white).
- Place of Publication:
- Cambridge, Massachusetts : National Bureau of Economic Research, 2020.
- Summary:
- We develop a dynamic asset-pricing model of cryptocurrencies/tokens that allow users to conduct peer-to-peer transactions on digital platforms. The equilibrium value of tokens is determined by aggregating heterogeneous users' transactional demand rather than discounting cashflows as in standard valuation models. Endogenous platform adoption builds upon user network externality and exhibits an S-curve - it starts slow, becomes volatile, and eventually tapers off. Introducing tokens lowers users' transaction costs on the platform by allowing users to capitalize on platform growth. The resulting intertemporal feedback between user adoption and token price accelerates adoption and dampens user-base volatility.
- Notes:
- Description based on publisher supplied metadata and other sources.
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