The valuation of blockchain tokens has always been a hot research topic in the crypto ecosystem.
Regarding the valuation of Bitcoin, there are many articles that have explored the relationship between the coin price and the shutdown price of mining. However, for Ethereum and the broader blockchain based on POS or DPOS consensus mechanisms, although there are also many articles discussing the factors related to their tokens, the logic that convinces people seems to be not many.
Taking Ethereum as an example, in many cases, our estimate of the (future) price of Ethereum is simply by analogy with the market capitalization of Bitcoin.
This approach cannot be said to have no basis, but I feel that it lacks consideration of the essence and characteristics of Ethereum, because the way Ethereum captures value is clearly different from Bitcoin.
For example, many people will say that Bitcoin is "digital gold", and Ethereum is "digital oil".
If these two are the difference between "gold" and "oil", can the valuation of Ethereum be simply analogized with Bitcoin in the above way?
This is obviously inappropriate.
Recently, I read an article on Messari about the "economic security" of POS/DPOS blockchains.
The so-called "economic security" refers to the relationship between the value of the tokens used for staking in the POS/DPOS blockchain and the security of the blockchain.
For example, the current circulating supply of Ethereum is 100 million, of which one-third is used for POS staking. Assuming the current price of Ethereum is $3,000, the value of the Ethereum staked is $100 billion. The "economic security" of the Ethereum blockchain is guaranteed by this $100 billion.
The core of the article discussed is whether "economic security" is as important to the security of POS/DPOS blockchains as many in the industry imagine.
This issue is not directly related to the valuation of Ethereum. But one of the scenarios described in the article made me think about whether the method described could be used to value Ethereum or the broader POS/DPOS blockchain tokens.
The author of the article hypothesized the following scenario:
For example, I have $10 million in USDC, but the staking value of the POS blockchain where these $10 million USDC are located is only $100. In this case, would I dare to put these USDC on this blockchain?
Definitely not.
Why?
Because if the total value of the tokens staked by all nodes is only $100, the malicious actors can easily bribe these nodes with $1,000 (10 times the staking value) to plunder the $10 million USDC on the chain.
For these nodes, even if they collaborate with the malicious actors and have their $100 staked tokens completely confiscated, the $1,000 bribe they receive is enough to be tempting.
For the malicious actors, the cost of $1,000 is negligible compared to the $10 million USDC they can gain.
So while we may debate exactly how much "economic security" is enough to make people believe a POS blockchain is secure, we can at least draw a bottom line:
The staking value of this POS blockchain cannot be less than the total value of the assets on the chain.
Following this line of thought, let's try to make a very conservative estimate of the unit price of Ethereum.
I checked the data on defillama (https://defillama.com/). As of the time of writing, the TVL of the Ethereum mainnet plus various Layer 2 expansions (OP-Rollup and ZK-Rollup) is around $70 billion.
The Ethereum Foundation, including Vitalik, estimates that in the future, one-third of the 1.2 billion circulating Ethereum tokens may be used for staking. If calculated at today's Ethereum price ($3,200), the staking value of one-third of the circulating tokens would be around $128 billion.
So the current situation of Ethereum is that about $128 billion in "economic security" is guaranteeing the security of a total of $70 billion in assets on the Ethereum mainnet and its Layer 2 expansions.
If we believe that the crypto ecosystem will create a chain-based economic system that mirrors human society, and assume that the TVL of the Ethereum ecosystem in the future can reach the level of our country's foreign exchange reserves in 2023 ($3.24 trillion), then the value of the tokens staked in the Ethereum blockchain must be at least $3.24 trillion.
If we are more conservative, and assume that this $3.24 trillion is the value of the entire circulating supply of Ethereum tokens, then the unit price of Ethereum tokens would be around $27,000.
In this calculation process, the data and information I cited are completely my own preferences, which is not the key point. The key is that this valuation approach can roughly outline a valuation floor for the tokens in the blockchain ecosystem.
In fact, it can not only be used to assess the future unit price floor of Ethereum, but also the future unit price floor of any POS/DPOS blockchain token.
I wrote this "fantastic" valuation method today purely because the article I read sparked my imagination and inspired me to think about the valuation issue from another angle.
