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