Assessing the fair value of tokens involves modelling how projects capture values. In this excerpt of Sygnum’s research report Valuing crypto assets, we explore how high community engagement with a project means growth.
High engagement of a lot of people with a project usually precedes actual user growth.
Projects that succeed in building a strong community and capturing a lot of mindshare early on are usually able to convert it into strong network effects, such as user growth, developer interest and investor interest.
We can track the size of the communities and their activity levels on social media. Data on traditional and social media mentions are also useful indicators, especially when the data also capture whether a comment is positive or negative, whether it is picked up and amplified by others and whether the engagement is predominantly by bots.
BITCOIN AND ETHEREUM TWEET VOLUME
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