Definition ∞ Market Valuation Model is a framework used to estimate the fair or intrinsic value of a digital asset. These models often incorporate fundamental factors such as network activity, transaction fees, developer engagement, and tokenomics. They aim to provide a quantitative basis for assessing whether an asset is overvalued or undervalued relative to its underlying utility and growth prospects. Various models exist, each with different assumptions and methodologies.
Context ∞ The state of Market Valuation Models in the cryptocurrency space is continuously evolving due to the unique characteristics of digital assets. A key debate involves the applicability of traditional valuation methods to decentralized networks and the development of new, crypto-native approaches. Critical future developments will include the refinement of these models to account for network effects, governance structures, and cross-chain interoperability.
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