eprintid: 10198913 rev_number: 9 eprint_status: archive userid: 699 dir: disk0/10/19/89/13 datestamp: 2024-10-25 09:00:49 lastmod: 2024-10-25 09:00:49 status_changed: 2024-10-25 09:00:49 type: article metadata_visibility: show sword_depositor: 699 creators_name: Moncada, Roberto creators_name: Ferro, Enrico creators_name: Fiaschetti, Maurizio creators_name: Medda, Francesca title: Blockchain Tokens, Price Volatility, and Active User Base: An Empirical Analysis Based on Tokenomics ispublished: pub divisions: UCL divisions: B04 divisions: F44 keywords: tokens; blockchain; price volatility; active user base; tokenomics note: : © 2024 by the authors. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (https:// creativecommons.org/licenses/by/ 4.0/). abstract: Blockchain tokens have accumulated tremendous market value but remain highly controversial, given their price volatility and seemingly speculative nature. Ironically, this very characteristic can foster token retention as users wait for occasions of appreciation. In this paper, we conduct an empirical analysis with 58 tokens in two steps: first, an investigation of the drivers of user activity and token price volatility using a new blockchain token classification framework, searching for possible tokenomics links. Our findings suggest that there is an intrinsic relationship between the way tokens are used as a means of exchange and how token usage dynamics influence user engagement oppositely to market stability. Only some features, such as earning potential and voting rights, foster token-holding strategies, while only Ethereum ecosystem membership has positive effects on price volatility. Second, we analyze the direct relationship between price volatility and active users. Results show that, on average, a 10% increase in volatility is related to a decrease in active addresses ranging between 3.96% and 5.88%. The finding is supportive of the hypothesis that token price volatility may be treated as an opportunity to increase token retention. date: 2024-10-23 date_type: published publisher: MDPI AG official_url: https://doi.org/10.3390/ijfs12040107 oa_status: green full_text_type: pub language: eng primo: open primo_central: open_green verified: verified_manual elements_id: 2329919 doi: 10.3390/ijfs12040107 lyricists_name: Medda, Francesca lyricists_name: Fiaschetti, Maurizio lyricists_id: FMEDD49 lyricists_id: MFIAS50 actors_name: Fiaschetti, Maurizio actors_id: MFIAS50 actors_role: owner full_text_status: public publication: International Journal of Financial Studies volume: 12 number: 4 article_number: 107 issn: 2227-7072 citation: Moncada, Roberto; Ferro, Enrico; Fiaschetti, Maurizio; Medda, Francesca; (2024) Blockchain Tokens, Price Volatility, and Active User Base: An Empirical Analysis Based on Tokenomics. International Journal of Financial Studies , 12 (4) , Article 107. 10.3390/ijfs12040107 <https://doi.org/10.3390/ijfs12040107>. Green open access document_url: https://discovery.ucl.ac.uk/id/eprint/10198913/1/Fiaschetti_ijfs-12-00107-v2.pdf