Great read, evaluating Long-Term, Non-Speculative Value of tokens. As often as projects have claimed that their token will accrue value proportionately to the usage of the network, we’ve heard investors claim that by the Law of MV=PQ, tokens will have no value as a result of high velocity.
As a brief refresher on the argument against value accruing to tokens: Expected high velocity — The more successful a network, the more often its token will exchange hands in the form of payments.No incentives to hold — Additionally, since in the future swapping from one token to another token will happen frictionlessly in the background, users will hold stablecoins or Store of Value (SoV) tokens and exchange these for the payment token ‘just in time’. In the absence of any other incentives for users to hold any amount of the native payment token, they are likely to hold none.No need for token (can be forked out) — The payment token might even be swapped out in a new fork of the network as it only adds friction for users who hold stablecoins or SoV.
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