Utility coins
Valuing utility coins
Bitcoin debates revolve around scarcity; utility coins revolve around whether anyone actually needs the token. This guide gives a four-question checklist and the numbers that mislead.
Question 1: can the coin be replaced?
Imagine the network accepting euros or a stablecoin instead of its own token. If nothing essential changes, the token is a toll gate that competition will eventually remove.
Coins that pass usually have a technical reason to exist: slashable collateral, or auctioning scarce block space.
Question 2: how much supply is still coming?
Look beyond circulating market cap at fully diluted value and the unlock schedule.
A network can double usage while the price halves because supply grew faster.
Question 3: does the network earn?
Compare paid fees and paid services against market cap, and track that ratio over time.
Be strict about the source: incentive emissions mean the protocol is paying its own customers.
Question 4: who decides?
Check who can change the protocol, who holds treasury keys and how concentrated voting power is.
Concentration is not automatically wrong, but it changes what you are buying.
Frequently asked questions
Is there a P/E ratio for crypto?
Not strictly, but market cap against annual network revenue comes close. Use it for comparison, not as a precise value.
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