❌ [Analysis] Utility token market cap and equity market cap are not comparable – Stephanie Hurder, PhD
Token and equity valuations differ significantly in what they represent, and a misunderstanding can result in an investor dramatically overpaying for a token, or an entrepreneur not receiving the fair value of the tokens that they are offering.   On one hand, the value of the equity is a function of the profits of the business over the business' life. On the other hand, the value of a utility token is the value of the goods or services the token can buy in a single period. To be noted also is that if the market cap of the total circulating utility token supply is worth more than the total revenue of the platform in a single period of operation, then it is overvalued.
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