We Still Lack a Rational Way to Value Tokens

We Still Lack a Rational Way to Value Tokens

(Alvaro Reyes/Unsplash)

We’re obsessed with wanting to draw rational relationships between the price of crypto tokens and the value behind them. There is no shortage of viewpoints from analysts, entrepreneurs, developers, pundits or investors on this question. Just and you will see the variety of what has been written so far on this topic.

My own last attempt was from September 2019, as . But I didn’t profess to have cracked the code on a magical formula, or to have found the magical equation that would become the telling star for these valuations. 

As I lamented in 2017 in “,” we are in dire need of fundamental metrics that equate to how publicly traded companies are routinely valued.

In public companies, analysts and investors use metrics such as revenue, net income, EBITDA (earnings before interest, taxes, depreciation and amortization), EPS (earnings per share), P/E ratio (price to earnings ratio) and sales growth in order to correlate market capitalization justifications.

For ICOs and token-based projects, what are the equivalent performance metrics?

At the end of 2017, as token users started to surpass the number of token speculators, we hoped usage activity would prevail as the mainstay of token valuations. Fast forward to today, three years later, and we find ourselves back to square one. 

Two promising blockchain metrics have struggled to assert themselves because they failed the test of time. 

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