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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