Calculate token velocity using the Equation of Exchange: MV = PQ. Model token market cap given transaction volume (PQ), velocity assumptions, and projected network usage. High velocity is a valuation headwind for utility tokens.
Calculate token velocity using the Equation of Exchange: MV = PQ. Model token market cap given transaction volume (PQ), velocity assumptions, and projected network usage. High velocity is a valuation headwind for utility tokens
Each component has a specific meaning:
Note: Interpret the token velocity result against the thresholds and context described above.
Enter the Equation of Exchange: MV = PQ for the scenario you are assessing. Calculate token velocity using the Equation of Exchange: MV = PQ. Model token market cap given transaction volume (PQ), velocity assumptions, and projected network usage. High velocity is a valuation headwind for utility tokens. Use the token velocity result to inform your calculation.