Research

Valuing Perlin’s native network token, through a discounted cash flows approach

 
 
 


Perlin is a bleeding edge, lightning fast, DAG based distributed ledger, that provides Bitcoin level security through a novel, leaderless PoS consensus protocol (Wavelet), while achieving 31,000+ TPS and consistently has 0 to 4 second time to finality.

Besides the many technical innovations that Perlin brings to the table, the pipeline of real business use cases that it is lining up through an ICC endorsement and the encouraging early developer support, there is one more attribute that makes Perlin stand out, in our view; its straightforward token economics model.

This short report comes as an accompaniment of a valuation modelling exercise on Perlin’s native network token, the PERL. Given the nature of the PERL’s utility (access ledger fees via staking), it lends itself to the application of a traditional discounted cash flow valuation methodology. In the absence of any intermittent network fees, all the value collected as transaction fees, accrues back to the token holders that are staking the token.

In the attached document, you will find a detailed description of the assumptions that underpin the model, a scenario analysis with commentary on what we think are the most likely outcomes, and a link to the open sourced valuation model.

Disclaimer: Decentral Park Capital is an investor in Perlin and a PERL tokenholder.

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