Interactive Blockchain Valuation Model
Cryptocurrencies do have a value, and they can be valued using traditional economic tools.
We built a model to demonstrate our thesis, taking into account three core elements of blockchain technology: The Trilemma, Security Budget, and Real-World application. Try our model below to explore the fundamental value of a cryptocurrency and its blockchain. For the full context behind this model and how we approached it, check out this blog post.
As Niels Bohr (and not Yogi Berra) said, “prediction is difficult, especially if it’s about the future.”
We think our assumptions as to the Chia Blockchain are reasonable, and conservative, and our capital cost estimate captures our risk. However, reasonable minds will differ. This is a tool to create estimates and not a specific prediction.
$ 915 Billion
Total Global Transaction Fee Revenue
Total Gross Transaction Fee Revenue
Billion
(Default value is derived by removing interest revenue from the $2tn in payments fees annually per the McKinsey 2021 Payments Report)
Time Horizon For Model
10
|
3 Years
|
20 Years
Over what time period do you expect this scenario to play out - Year X below.
$ 192.15
Total Blockchain Annual Payment Market Size ($bn)
% Fee Reduction in Blockchain Adoption
30
|
10 %
|
70 %
How much do payment fees need to reduce to move payments to Blockchains?
Total Blockchain Annual Market Size after Fee Reduction
30
|
10 %
|
70 %
Market Share of Transaction Fee Revenue Taken by all Blockchains in X Years.
$ 9.61
Total Layer 1 Transaction Fees For Blockchain Under Analysis ($bn)
1.05 %
Percentage of total transaction fee revenue on Layer 1 of Blockchain Under Analysis
Estimated Market Share of the Blockchain under analysis
25
|
5 %
|
50 %
Share of only the Total Blockchain Annual Payment Market Size
% of TX Fees Moving to Layer 2
80
|
50 %
|
90 %
Estimated Proportion of All Transaction Fees On This Blockchain that migrate to Layer 2
$ 10.16
Average Transaction Cost at TPS of Blockchain Under Analysis
Blockchain X transactions per second (TPS)
TPS
TPS of this Blockchain. Chia is 20-40 TPS.
$ 384.30
Total Coin Value $(bn)
Total Estimated Coin Market Capitalization
Velocity
Transaction Fee Velocity: the amount of transaction fees paid (in coins) in one year divided by the average coins outstanding. Default Velocity is ETH Velocity Over 12 Months Ending May 2022.
$ 9729.11
Value Per Coin
Total Coin Capitalization divided by coins outstanding in Year X
Total Coins, Year X
Coins
Total Coins Outstanding for this Blockchain in year X. (Default number is the fully diluted approximate number of Chia Coins 10 Years From Today--Year 11 though the market may exclude coins that are not in the circulating supply. The chia emission schedule can be found on pages 22-23 of our business whitepaper 2.0)
$ 168.72
Discounted Coin Value
Present Value of Future Estimated Coin Price Discounted at the Required Rate of Return for X years.
Required Rate of Return
50
|
15 %
|
60 %
Required Rate of Return that correctly compensates investors for the risk related to the blockchain industry and this particular Blockchain
Summary
$ 168.72
Present Value of Future Estimated Coin Price Discounted at the Required Rate of Return for X years.
$ 915 Billion
Total Global Transaction Fee Revenue
$ 192.15
Total Annual Blockchain Payments Market Size ($bn)
$ 9.61
Total Layer 1 Transaction Fees For This Blockchain ($bn)
1.05 %
Percentage of Fees on Layer 1 of Blockchain
$ 10.16
Average Transaction Cost at Layer 1 TPS
$ 384.30
Total Coin Value $(bn)
$ 9729.11
Value Per Coin