Valuation of Loyalty Tokens

Shah, Anand (2022): Valuation of Loyalty Tokens.

Abstract

Valuation of tokens is a wager on the platform adoption. This study investigates the effect of platform adoption on the valuation of loyalty tokens and the contingent claims with the token as an underlying. The platform adoption is modelled using the classical Bass Model. The example selected is that of airmiles, but the approach could be extended to loyalty token with other numeraires as well. After assuming few monetary policy rules for the platform governance, the proposed simple model predicts that the Bass Model parameters could have significant influence on the valuation of loyalty tokens and the contingent claims with the token as an underlying.

• Item Type: MPRA Paper
• Language: English
• Keywords: Tokenomics, Cryptocurrencies, Initial Coin Offering (ICO), Blockchain applications, Bass Model, Option pricing with Bass Model parameters
• Subjects: E - Macroeconomics and Monetary Economics > E4 - Money and Interest Rates > E42 - Monetary Systems ; Standards ; Regimes ; Government and the Monetary System ; Payment Systems; G - Financial Economics > G1 - General Financial Markets > G12 - Asset Pricing ; Trading Volume ; Bond Interest Rates; G - Financial Economics > G1 - General Financial Markets > G13 - Contingent Pricing ; Futures Pricing; L - Industrial Organization > L8 - Industry Studies: Services > L86 - Information and Internet Services ; Computer Software

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