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Fundamental Pricing of Utility Tokens

Author

Listed:
  • Julien Prat
  • Vincent Danos
  • Stefania Marcassa

    (Université de Cergy-Pontoise, THEMA)

Abstract

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.

Suggested Citation

  • Julien Prat & Vincent Danos & Stefania Marcassa, 2019. "Fundamental Pricing of Utility Tokens," Thema Working Papers 2019-11, THEMA (Théorie Economique, Modélisation et Applications), CY Cergy-Paris University, ESSEC and CNRS.
    • Handle: RePEc:ema:worpap:2019-11
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Canidio, Andrea, 2025. "Auctions with tokens: Monetary policy as a mechanism design choice," Journal of Economic Theory, Elsevier, vol. 230(C).
    2. Aggelos Kiayias & Philip Lazos & Jan Christoph Schlegel, 2023. "Would Friedman Burn your Tokens?," Papers 2306.17025, arXiv.org.
    3. Yukun Liu & Aleh Tsyvinski & Xi Wu, 2022. "Common Risk Factors in Cryptocurrency," Journal of Finance, American Finance Association, vol. 77(2), pages 1133-1177, April.
    4. Ye Li & Simon Mayer & Simon Mayer, 2021. "Money Creation in Decentralized Finance: A Dynamic Model of Stablecoin and Crypto Shadow Banking," CESifo Working Paper Series 9260, CESifo.
    5. Schilling, Linda, 2021. "ICO versus Credit versus Venture Capital Financing under Stochastic Demand: A comment on '`Entrepreneurial Incentives and the Role of Initial Coin Offerings'' by R. Garratt and M. v. Oordt," MPRA Paper 116492, University Library of Munich, Germany.
    6. Andrea Canidio, 2023. "Auctions with Tokens: Monetary Policy as a Mechanism Design Choice," Papers 2301.13794, arXiv.org, revised Jun 2025.
    7. Arkorful, Gideon Bruce & Chen, Haiqiang & Gu, Ming & Liu, Xiaoqun, 2023. "What can we learn from the convenience yield of Bitcoin? Evidence from the COVID-19 crisis," International Review of Economics & Finance, Elsevier, vol. 88(C), pages 141-153.
    8. Benedetti, Hugo & Rodríguez-Garnica, Gabriel, 2025. "Does what happens on-chain stays on-chain? The dynamics of blockchain token transactions and prices," Journal of International Money and Finance, Elsevier, vol. 158(C).
    9. Schilling, Linda & Fernández-Villaverde, Jesús & Uhlig, Harald, 2024. "Central bank digital currency: When price and bank stability collide," Journal of Monetary Economics, Elsevier, vol. 145(C).
    10. Garratt, Rodney J. & van Oordt, Maarten R.C., 2026. "The crypto multiplier," Journal of Corporate Finance, Elsevier, vol. 96(C).
    11. Marcelo A. T. Aragão, 2021. "A Few Things You Wanted to Know about the Economics of CBDCs, but were Afraid to Model: a survey of what we can learn from who has done," Working Papers Series 554, Central Bank of Brazil, Research Department.

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    Keywords

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    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage

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