Uncategorized
Why Blockchain Valuation Models Are Still Up for Debate
Valuing blockchain networks today feels like déjà vu for anyone who lived through the early internet era. In the 1990s, analysts, investors, and founders struggled to apply familiar financial models to a radically unfamiliar technology. Companies with little more than a website and a pitch deck were valued in the hundreds of millions, sometimes billions, based on something as intangible as “eyeballs.”
It didn’t end well. And yet, in hindsight, those chaotic early years offered valuable lessons: technology evolves faster than finance, and valuation models must eventually adapt to the shape of innovation.
Today, we’re facing a similar dilemma in the blockchain space. Despite growing adoption, maturing infrastructure, and undeniable cultural and economic momentum, there’s still no widely accepted or standardized way to value a blockchain network. And the few models we have, while directionally useful, remain flawed or incomplete.
To understand where we might go, it’s worth revisiting how we got here.
The First Internet Valuation Wave: Eyeballs, Not Earnings (mid 1990s-2000)
In the mid-to-late 1990s, the internet was a frontier. Investors didn’t know what “success” would look like for digital companies, so they leaned on whatever they could measure: page views, banner ad impressions, unique visitors, or monthly active users (MAUs). These crude proxies for attention became the de facto metrics for value. The logic was simple: if millions of people were visiting your site, monetization would eventually follow.
Valuations soared. Startups like Pets.com (see image), Webvan, and eToys raised hundreds of millions on the promise of dominance. But revenue was an afterthought, and profitability was a punchline. When the dot-com bubble burst in 2000, it became clear that attention without monetization is a poor foundation for enterprise value.
The Post-Crash Realignment: Revenues and Margins (2001-2005)
After the first internet bubble burst, investor sentiment changed dramatically. The market demanded proof, not just vision. From 2001 onward, companies were expected to generate meaningful revenue, show gross margins, and move toward profitability.
This period saw a ruthless weeding out of unsustainable models. Only companies with real products, real customers, and realistic financials survived. Amazon, for example, began to shift investor focus from abstract future potential to actual operational performance. Its ability to show consistent top-line growth and improve margin discipline helped rebuild confidence.
eBay became a paragon of clarity: a profitable, transaction-based business with a scalable model. These survivors taught investors to evaluate internet companies more like traditional businesses, with income statements that mattered.
The Rise of SaaS and Unit Economics (2005-2015)
By the mid-2000s, a new model emerged, Software as a Service (SaaS), and with it came a new language of valuation. Rather than relying on unpredictable advertising or retail margins, SaaS businesses offered predictable recurring-revenue streams, a game-changer for both founders and financiers.
This era gave rise to metrics like:
- Annual Recurring Revenue (ARR) and Monthly Recurring Revenue (MRR)
- Customer Acquisition Cost (CAC) and Lifetime Value (LTV)
- Churn, net retention, and the Rule of 40 (growth + margin ≥ 40%)
These unit economics allowed for sharper insight into a company’s operational health and scalability. Investors began to value growth efficiency and recurring revenue, rewarding companies with sustainable, high-margin models and strong customer stickiness.
SaaS companies could be unprofitable, but only if their metrics told a clear story: acquire customers cheaply, keep them for years, and expand wallet share over time. This approach became the backbone of modern tech valuation and remains a dominant lens today.
The Platform Era: Network Effects and Ecosystem Value (2015-Present)
By the 2010s, companies like Facebook, Google, Uber, and Airbnb redefined what value looked like online. These weren’t just businesses, they were platforms. Their power lay in aggregation, data control, and the network effects that made them increasingly dominant the more they grew.
Valuation models evolved accordingly. Analysts began measuring:
- Network effects (value growing with each new user)
- Ecosystem depth (third-party developer activity, marketplaces, plug-ins)
- User engagement and data lock-in
Companies were now rewarded not just for revenues, but for building infrastructure others depended on. This was a qualitative shift, valuing strategic position, not just cash flow.
Today’s Internet Giants: Profit, Efficiency, and AI Moats
In the 2020s, tech valuation matured. Public investors now focus on operational efficiency, profitability, and free cash flow. Growth at all costs is out; the “Rule of 40” is in. (It says that a company’s growth rate plus free cash rate should equal or exceed 40%).
Companies are valued based on sector-specific performance: SaaS has its own yardsticks, e-commerce others, fintech still others. Meanwhile, intangibles like proprietary AI models, data ownership, and infrastructure moats are increasingly central to how tech leaders are priced.
In short, valuation became both more specialized and more rational, tailored to what actually drives value in each digital sector.
What This Means for Blockchain
Despite all this progress, blockchains remain in valuation limbo. We see attempts to apply traditional metrics, like DCF (discounted cash flow), validator revenue, or protocol fees, but these often miss the point. This is the equivalent of valuing Amazon in 1998 by its shipping costs.
Blockchains are public infrastructure, not private companies. Many rely on subsidies or token emissions that inflate revenues but don’t reflect true demand. Moreover, as decentralized systems, they aren’t designed to extract profits, but to enable permissionless coordination and trustless economic activity.
Other valuation methods have emerged—each offering part of the puzzle:
- MSOV (Monetary Store of Value) models value a chain by how its token is staked or deposited in DeFi. Helpful, but static.
- Onchain GDP aims to measure economic output across apps and chains. Smart in theory, but hard to normalize and easy to distort.
None of these models has emerged as dominant, comprehensive, or widely accepted. And the data layer aspect of blockchains is still missing from any valuation framework.
A New Lens: Valuing Velocity and Flow
To move forward, we need models that reflect what blockchains actually do. That’s why I’ve proposed a valuation framework based on velocity and flow, a measure of how money and assets move through a blockchain economy. It focuses on usage patterns, transaction loops, and capital reuse, more akin to economic circulation than static metrics, and it has parallels with the internet’s more mature platform era, the last frontier of digital economy valuations.
This model examines:
- Stablecoin turnover and velocity
- DeFi lending, trading, collateral
- NFT trading dynamics (purchases, royalties)
- Layer-to-layer bidirectional asset flows
- Real World Assets tokenization volumes (purchases, royalties, appreciations)
- Real capital formation and reusability across apps
- Medium of exchange fees for collateralizing, settling, or bridging assets and transactions
This approach offers a native and resilient way to measure blockchain value. It focuses not just on what sits in the system, but what moves, and movement is the clearest sign of trust, utility, and relevance, just as real money’s velocity is a commonly accepted measure of an economy’s vitality.
Conclusion: Build the Model the Future Deserves
The internet taught us that every technological shift demands a new financial lens. Early models will always be clumsy, but the worst mistake is sticking with frameworks that no longer fit.
Blockchains are still searching for their rightful valuation narrative.
The valuation frameworks of the future will be built, not inherited. And just as early internet investors had to invent new tools to understand what they were seeing, the blockchain world must now do the same.
If we get this right, we won’t just value blockchains more accurately, we’ll unlock a deeper understanding of their economic and social potential.
On Wednesday, Bolivia’s central bank announced that it had signed a formal agreement with El Salvador’s digital asset regulator, marking a significant step toward developing a legal and technical framework for cryptocurrency adoption in the Andean nation.
The Central Bank of Bolivia (BCB) and El Salvador’s Comisión Nacional de Activos Digitales (CNAD) will collaborate on a broad range of crypto policy initiatives under the terms of a newly signed memorandum of understanding. The agreement includes joint work on blockchain intelligence tools, regulatory frameworks, and risk analysis models. It is open-ended and takes effect immediately.
The policy shift comes as crypto use accelerates in Bolivia. According to figures released by the BCB, digital asset transaction volume grew from $46.5 million in June 2024 to $294 million in June 2025, a more than sixfold increase following the passage of Decree No. 082/2024, which authorized broader use of cryptoassets across the country.
The new agreement draws on El Salvador’s experience as the first country to adopt bitcoin as legal tender and build a formal digital asset regulatory system. The CNAD, established after El Salvador’s 2021 Bitcoin Law, oversees the authorization of token offerings, the registration of digital asset service providers, and the supervision of crypto-related platforms.
BCB Acting President Edwin Rojas Ulo and CNAD President Juan Carlos Reyes García signed the agreement in La Paz. The two institutions will share best practices aimed at supporting Bolivia’s goal of building a transparent, inclusive, and well-regulated digital asset ecosystem, particularly for populations underserved by traditional finance.
While Bolivia has historically taken a cautious stance on crypto, the agreement signals a move toward gradual regulatory engagement rather than restriction. Officials emphasized that cooperation with El Salvador will help Bolivia modernize its financial infrastructure while safeguarding stability and promoting innovation.
The deal aligns Bolivia with a growing number of countries exploring tailored crypto regulations in response to rapid adoption, especially in Latin America. It also reinforces El Salvador’s role as a regional reference point for crypto integration at the institutional level.
Uncategorized
Bitcoin, XRP, Ether Recoup Overnight Losses as Analysts Point to Growing Threat to Fed Independence
Major cryptocurrencies have reversed overnight losses, with analysts asserting that Wednesday’s Fed decision underscored President Trump’s growing influence over the central bank, strengthening the long-term bullish case for crypto.
The Fed kept the benchmark interest rate steady at 4.25% as expected, and Chairman Jerome Powell dampened prospects of renewed rate cuts from September, stressing that the central bank is focused on controlling inflation—not on government borrowing or home mortgage costs that Trump wants lowered.
Powell’s comments rocked the crypto market, with bitcoin (BTC) falling to $116,000. XRP, ether (ETH) and solana (SOL) also fell, shaking out leveraged bets from futures markets.
These losses, however, have been reversed. As of the time of writing, BTC was trading at $118,400, with XRP and ETH changing hands at $ 0.00314 and $3,870, according to CoinDesk data. The CoinDesk 80 Index, a broader market gauge, hovered near 915 points, up 0.8% over the 24 hours.
Jimmy Yang, co-founder of Orbit Markets, said that the overnight Fed decision revealed a threat to the Fed’s independence.
While the central bank held rates steady, two policymakers – Fed Vice Chair for Supervision Michelle Bowman and Governor Christopher Waller, both appointed to the board by President Donald Trump — dissented, favoring a rate cut.
Trump has repeatedly criticised Powell for keeping interest rates elevated and costing the United States billions of dollars. Note that both Wallet and Bowman have publicly advocated for rate cuts in recent weeks.
«There are increasing concerns about the Fed’s independence as two of Trump’s appointees voted for a rate cut last night; this should strengthen the case for crypto in the long term,» Yang told CoinDesk.
He added that with no immediate rate cut in sight, the market could continue to trade largely directionless, awaiting fresh catalysts – the July CPI release.
«CPI is likely to rise when the tariffs kick in over the next few months. Cryptocurrencies might sell off initially alongside broader risk assets. However, if inflation fears persist, crypto might rebound as a hedge narrative re-emerges, especially for bitcoin,» Yang noted.
Greg Magadini, director of derivatives at Amberdata, said that while the Fed’s decision was in line with expectations, concerns about the Fed’s independence linger.
«The biggest looming question this year for the bond market is around Fed independence. Wednesday’s decision helped the Fed defend its independence. Still, if Powell is fired or begins to cut rates too early, I expect hard assets (BTC, especially) to rally significantly. At the same time, inflation and bonds would likely lose considerable value,» Magadini noted. «Today the U.S. credit markets rely on Fed independence.»
Magadini explained bond markets continue to price in long-term inflation, which weakens the case for rapid fire rate cuts to ultra-low levels, as desired by Trump.
«We’ve seen long-bond yields rise a lot since Trump’s election. 10s30s moved from 15bps to 55bps and 2s10s from 5bps to 45bps.
This means the bond market continues to price in long-term inflation, especially given that «real yields» are historically positive… should inflation remain where it is today,» Magadini said.
Uncategorized
Asia Morning Briefing: MSFT, Meta Soar on Strong AI Earnings, But Crypto AI Tokens Fail to Follow
Good Morning, Asia. Here’s what’s making news in the markets:
Welcome to Asia Morning Briefing, a daily summary of top stories during U.S. hours and an overview of market moves and analysis. For a detailed overview of U.S. markets, see CoinDesk’s Crypto Daybook Americas.
Artificial Intelligence (AI) majors are slightly down despite blockbuster earnings by tech giants Microsoft (MSFT) and Meta, which cited their respective AI efforts as a catalyst for beating earnings.
Microsoft’s cloud revenue jumped 27% to $46.7 billion, with Azure crossing $75 billion annually as demand for AI workloads pushed datacenter capacity past two gigawatts. Meta, meanwhile, reported a 22% year-over-year revenue increase to $47.5 billion, with a 43% operating margin, as AI-powered ad models lifted conversions by up to 5% and engagement on Facebook and Instagram surged.
CoinGecko’s AI token category, which includes majors like TAO, NEAR, ICP, and RENDER is down 1.4%. In contrast, the CoinDesk 20, a measure of the performance of the world’s largest digital assets, is flat and trading below 4,000.
Typically, AI tokens move in sync with earnings from big tech. Nvidia’s record-breaking rally in 2024 helped the category push beyond a $10 billion market cap, but bitcoin’s rising dominance in the first half of 2025 pulled some air out of the category — and other types of altcoins — pushing it down to below $5 billion.
Traders across the crypto world today also took a breather, given the Fed’s recent messaging, which perhaps explains AI tokens’ muted reception to MSFT and Meta’s success.
«While policy remained unchanged, Powell’s remark that tariff-driven inflation may only be beginning added a layer of uncertainty that pressured risk assets across the board,» market maker Enflux wrote in a note to CoinDesk.
«With risk appetite fading and macro messaging turning less predictable, markets may remain in a holding pattern until participants gain clarity on inflation direction and policy response for the next few days or weeks,» Enflux continued.
Nvidia is set to report its earnings towards the end of August. Time will tell if the GPU giant’s expected solid results will serve as a catalyst for AI token growth.
Market Movements:
BTC: Crypto markets turned volatile on Wednesday as hawkish remarks from Fed Chair Jerome Powell triggered over $200 million in liquidations, with bitcoin briefly falling below $116,000.
ETH: Ether (ETH) is holding above $3,800, up 1.47%, as corporate treasuries, like SharpLink Gaming continue to bid on the asset for their balance sheet.
Gold: Gold fell 1.17% to $3,288.02 on Wednesday as strong U.S. economic data reduced safe-haven demand and reinforced expectations that the Fed will keep rates steady.
Nikkei 225: Asia-Pacific markets traded mixed Thursday as investors weighed new U.S. tariffs on South Korean imports and awaited the Bank of Japan’s expected decision to hold rates steady.
S&P 500: The S&P 500 slipped 0.12% to 6,362.90 after Fed Chair Powell signaled no imminent rate cuts amid tariff-driven inflation concerns.
Elsewhere in Crypto:
Bolivia Looks to El Salvador for Help Building Its Crypto Regulatory Framework
Bitcoin, XRP, Ether Recoup Overnight Losses as Analysts Point to Growing Threat to Fed Independence
Asia Morning Briefing: MSFT, Meta Soar on Strong AI Earnings, But Crypto AI Tokens Fail to Follow
-
Business10 месяцев ago3 Ways to make your business presentation more relatable
-
Fashion10 месяцев ago
According to Dior Couture, this taboo fashion accessory is back
-
Entertainment10 месяцев ago
10 Artists who retired from music and made a comeback
-
Entertainment10 месяцев ago
\’Better Call Saul\’ has been renewed for a fourth season
-
Business10 месяцев ago
15 Habits that could be hurting your business relationships
-
Entertainment10 месяцев ago
New Season 8 Walking Dead trailer flashes forward in time
-
Entertainment10 месяцев ago
Disney\’s live-action Aladdin finally finds its stars
-
Entertainment10 месяцев ago
Meet Superman\’s grandfather in new trailer for Krypton