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Ness Labs: Make the most of your mind
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A Summary of

On value, velocity, and monetary theory

by
Alex Evans
BlockChannel
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A new approach to cryptoasset valuations.

Velocity Thesis Problems

  • It claims to be a catch-all to make the two sides of the equation of exchange balance
  • Changes in velocity correlate with changes in PQ - but that isn't always the case.
  • Needs to be precisely defined and measurable, and it's not.

Monetary Critique of INET Model

  1. Demand for money and commodities should be decoupled
  2. Utility tokens should be seen to compete with other assets for holders
  3. Transactional demand/speculative demand should be conceptually distinct
  4. Blockchain economies are highly frictional
  5. Velocity varies over time and should be distinctly measurable
  6. Expanding on pattern payments matter

VOLT: A Two-Asset Model with Endogenous Velocity

  1. VOLT Supply Schedule
  2. VOLT Electricity Demand
  3. Money Demand for VOLT Tokens
  4. Revisiting Velocity Thesis
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