Fundamental Pricing of Utility Tokens

Economics & Decision Sciences Dept.

Speaker : Julien PRAT (CREST)

HEC Campus - Building T - Room T004

We explain how to evaluate the fundamental price of utility tokens. Our model endogenizes the velocity of circulation of tokens and yields a pricing formula that is fully microfounded. According to our approach, tokens are valuable because they have to be immediately accessible when the platform service is needed, a requirement that is reminiscent of the cash-in-advance constraint in the theory of money.