A Taxonomy Of Digital Assets For Investors

How to think about value in the cryptoasset space

The Most Common Misunderstanding

Before diving into why individual types of cryptoassets have value, let’s clear up the biggest misconception about why cryptoassets have value at all.

Commodity Monies

Comparable financial assets: Store of value commodity (think: gold)/currency

Utility Tokens

Comparable financial assets: Arcade tokens, sports tickets

Application Platforms

Comparable financial assets: Consumption commodity (think: oil)/Fiat currency (think: U.S. Dollar)

Value Capture Governance Tokens

Comparable financial assets: Equity

Pure Governance Tokens

Comparable financial assets: Start-up equity/equity options

Stablecoins

Comparable financial assets: Dollar-pegged currencies

Potential Securities/Unnecessary Tokens

Comparable financial assets: Equity

Concluding Thoughts:

This list is by no means exhaustive. Some tokens fit into multiple classifications or could even represent their own entirely. Decred’s DCR for example straddles the line between commodity money asset and value capture governance token. The purpose of this piece is to help create a framework for the crypto ecosystem, not get specific on the functionality of individual networks.

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