In 1976, economist Friedrich Hayek wrote a paper titled “The Denationalization of Money,” where he argued that allowing private currencies to compete with each other would create a more stable monetary system. Hayek reasoned that, unlike technology, the organic evolution of money was interrupted by the emergence of government-controlled currencies, and that government intervention in the system has led to instability and inflation. Hayek imagined a world with a competitive market for private currencies, each backed by a variety of assets; a world where the value of each currency would be determined by supply and demand rather than the decisions of various sovereign entities.

In this part of our Tokenomics series, learn about how the more successful dApp models operate under the hood and possible crypto token valuations tied to these ecosystems.

Smart contract platforms (SCPs) like Ethereum (ETH) are often referred to as distributed computers, whereas payment cryptocurrencies like Bitcoin – discussed in part one of our series – are simpler distributed ledgers. In this piece, we’ll break down the unique characteristics of smart contract platforms, discuss how their native tokens vary from traditional payment cryptocurrencies like Bitcoin, and propose a valuation framework by examining supply and demand factors.

A proposed framework for how to value crypto assets that encompasses correlations, supply issuance, competitor analysis, network effects, and security/decentralization checks