A study was carried out by Arcane Research, and the results were published as a comprehensive Framework For Evaluating Token Prices. In spite of the fact that markets respond aggressively, the dynamics, with the exception of hype, on how certain narratives should affect prices over time are often unable to be discovered.
The report stated:
“Our framework won’t magically spit out ‘true’ token prices, but it certainly can’t make things worse than the current ‘based on nothing’ way of evaluating what token prices should be in the long term.”
According to the study that Arcane Research released, it is working on a system to analyze token pricing in an effort to fill this gaping void in the market. In the most recent iteration of the system, the fundamental value, also known as the long-term value, of a token is broken down into three distinct components. A consistent monetary premium (similar to that of gold), practical use as currency, and access utility (like smart contract interaction on Ethereum), says Arcane.
It is very hard to make an accurate forecast about the consistent financial premium. The concept of monetary worth may be analyzed using a variety of conceptual frameworks. The concept of access utility is amenable to accurate modeling using economic theory.
Arcane Research thinks that it will be able to make significant progress in analyzing token prices with the use of this framework and modeling what is feasible to model, particularly with regard to how and if certain news should affect token values.
“We are working on our models and look forward to sharing the findings later. It might be a complete nothing-burger, but we believe it’s worth trying,” says Arcane.
