We still lack a reasonable method to evaluate the value of tokens
We have always been keen to analyze the reasonable relationship between the price of encrypted tokens and the value behind them. For ICOs and token-based projects, what are the metrics for equivalent performance?
At the end of 2017, as the number of Bitcoin users exceeded the number of Bitcoin speculators, we hope that usage activity can become the mainstream of Bitcoin valuation. However, fast forward to today, three years later, we are back to the starting point.
At present, due to the failure in withstanding the test of time, the once promising blockchain metric has been working hard to defend itself.
This is the gas cost on the Ethereum network. As the Ethereum network has become more popular, its operating speed has become slower and slower. This has also led to an increase in the gas cost of running various smart contracts. The explanation on this point has subsequently become the focus of controversy.
The increase in gas fees can be regarded as part of its “network revenue.” On the other hand, this also means that transactions on the Ethereum network are becoming too expensive, forcing some users to consider moving to other blockchain projects. During this period, the Ethereum token price first showed a trend of rising, then falling. However, this trend is difficult to establish the true correlation through any type of equation or reliable quantitative standard.
This callback phenomenon can be explained by the dynamic behavior of traditional market, which usually price the basic tools in advance, and shrink on their own after the news is announced. This is a common psychological phenomenon in the market behavior.
In the blockchain field, on-chain fees/revenues are still the leading indicators of blockchain network value. Ethereum has put forward a proposal to make the charging plan more dynamic, namely the EIP 1559 and charging structure, which will ensure a fairer payment. On the other hand, it may also make it more difficult to correlate fees and income. Nevertheless, this is a development area that deserves attention.
However, we are still in the early stages of finding the correlation indicators between the value of encrypted tokens and their usage. Therefore, we are still in the era of qualitative evaluation for encrypted tokens. The price of tokens is mainly driven by cognition, ecological value, and the commitment of creators. We can compare the price increase of NGK through this cognitive comparison. First, the STO issuance method of NGK is under the supervision and approval of the SEC. It has real value, with securities, financial derivatives, and financial attributes.
Second, the development of NGK’s ecological value has promoted the rise of NGK tokens. For example, the recently launched NGKEX has naturally attracted a wave of attention. With its increasing ecological functions, the rise of NGK’s value has been promoted.
Lastly, since the establishment and development of the NGK project, it has developed many projects and accumulated many ecological builders. Driven by this group of ecological builders, the price of NGK has naturally increased.