Assigning a value to smart contract platform tokens using a discounted cash flow methodology.

1. Valuing Smart
Contract Platforms
Assigning a value to smart contract platform
tokens using a discounted cash flow
methodology.

2. Ether has value because
it is needed to pay miners
for transaction fees.

3. Ether has value because
it is needed to pay miners
for transaction fees.

4. Transactions on Ethereum are
a valuable and scarce
resource and only Ether
holder will have the ability to
sell them

7. In 2018 users have payed
$148,000,000 for the right to
include a transaction they care
about into the Ethereum
blockchain.

8. For what are users spending $148m?

9. Disclaimer - the following slide is
meant to show an example
calculation and not an evaluation
of Ether - different input
parameters can lead to very
different results

11. Sanity check - Are those numbers
somewhat realistic given the scaling
roadmap
Without scaling
(current ~5tx/sec)
an avg. tx fee of
$11.5 per tx is
needed

12. With the current sharding plan
Ethereum will roughly increase its
capacity by a factor 1000 by simply
deploying Ethereum on 1024 shards
and allowing cross-shard
communication.

13. Will sharding and eventually unlimited
scalability kill the fee market?

14. Scalability is achieved by introducing
concurrency and thus giving up “atomic
state transitions”
Atomic state transitions will always be
a scarce resource.

15. Atomic arbitrage transaction (1/2)

16. Atomic arbitrage transaction (2/2)

17. Different shards will have independent
fee markets.
Shards will likely have up to 100x
different fees.
Shards with DEXs with most liquidity
will be among the most expensive

19. Store of Value/ Monetary Premium?

21. Observations that would confirms the
presented model/assumptions
1)Transaction fees would start to raise
again
2)Gas prices would decouple from ETH
price - potentially be payed in other
tokens (DAI)

22. 3) Average value of transactions would
increase (~$1000 +)
4) Gas prices would decouple from ETH
price - potentially be payed in other
tokens (DAI)

23. Data from:
https://bloxy.info
https://messari.io/onchainfx
https://coinmetrics.io/
Thank you!