An iEtherean Tale #61

An imaginary iEtherean tale based on true stories, real events, news, articles and/or facts…

The room was buzzing with energy, even as the light from the dozens of holographic projectors flickered. A gigantic screen stood in front of the class, displaying streams of blockchain data in real-time. MIT’s famed Professor Live Kepin stood near the board, pen in hand, gently tapping it against the edge of the table. The piercing blue of his eyes scanned the graphs, his mind wandering through the complexities of the blockchain economy. Every detail mattered, and yet, he felt something missing in his latest lecture.

Raoul Pal, a tall and enigmatic figure, quietly entered the room. Kepin had invited him for a private meeting after class. A former Goldman Sachs derivative banker turned crypto philosopher, Raoul had been making waves in the cryptocurrency valuation space. His theories, while divisive, carried weight. He was the sort of man who balanced mainstream respectability with avant-garde risk. Pal, dressed in an effortlessly sleek suit, walked with the calm confidence of someone who had predicted economic tides and lived to profit from them.

“Ah, Raoul! Glad you could make it.” Kepin’s tone was warm, though his mind remained locked on the challenge ahead. “I’ve been thinking about your latest valuation model for cryptocurrencies—quite brilliant, really—but I have a few questions.”

Raoul smiled, a measured grin. “Live, it's good to see you again. I know you're working on something groundbreaking, as usual. What's on your mind?”

Professor Kepin gestured toward the sleek table, where multiple screens streamed data on iEthereum. “I’ve been trying to apply your model to iEthereum. You’ve come up with something that may change the way we evaluate tokens like this. But as you know, there's always more to it.”

The two men sat down, surrounded by blinking lights and layers of projected graphs. The air felt heavy, filled with the anticipation of two intellectual giants coming together.

Kepin leaned forward, his face serious. “Your crypto valuation model—what you’ve dubbed the ‘Pal Method’—has caught the attention of the academic world. It’s revolutionary, applying real-world economic principles to an asset class that’s still largely speculative.”

Raoul nodded. “It’s about understanding the value through utility and adoption. Traditional finance has been so focused on price; they’ve forgotten to ask what these assets are being used for.”

“That’s precisely what bothers me,” Kepin replied, adjusting his glasses. “You’ve made waves by linking daily transaction volume and active users to the total market capitalization, and then dividing by the max token supply. But does this really capture the full story?”

Raoul raised an eyebrow. “What are you getting at?”

Kepin stood up, tapping the pen again as he moved toward a holographic image of iEthereum. “Let’s take your formula: Daily Transaction Volume in Dollars multiplied by Active Users equals Total Market Capitalization. Then, divide that by the Max Token Supply, and you get a price per token. Simple enough.”

With a flick of his wrist, Kepin pulled up the latest data on iEthereum. “Take today’s numbers. iEthereum’s daily volume is around $10,890, and we have 4,533 active users. According to your model, that gives us a market cap of $49 million. Dividing by the max token supply, that gives us a price of around $2.74 per token.”

Raoul nodded thoughtfully. “That’s right. It’s a model, and like any model, it has its assumptions.”

“Exactly,” Kepin said, his voice intensifying. “Assumptions. And that’s where we run into trouble. You’re defining ‘active users’ as anyone holding the token, but is that realistic? Some users have held their tokens for years without participating in the market. Does that make them ‘active’? Are they truly driving the value?”

Raoul leaned back, his hands steepled in front of him. “It’s a fair point. But in the world of crypto, long-term holders still influence price. They create scarcity, and that scarcity is a form of value in itself.”

Kepin walked toward the window, staring out at the iconic dome of MIT in the distance. “Scarcity, yes. But you’re missing the emotional component—the irrational human factor. People don’t just invest in tokens for utility. They invest because they believe in the future potential. That’s the irrationality driving these wild fluctuations.”

Raoul chuckled. “I thought you academics liked cold, hard math.”

Kepin smiled but did not turn around. “Oh, I do. But I also understand that the numbers don’t always capture the full story. Take iEthereum’s wild price manipulation. Some days, it trades at $0.02. Other days, $0.13. How does your model account for such volatility? A few traders can push the entire market off-balance.”

Raoul’s gaze was steady, unshaken. “It’s true, iEthereum is a tough nut to crack. But the Pal Method works over the long term. Daily variations in price don’t matter as much as the broader trends.”

Kepin finally turned to face him. “You’re right, but I still believe we need to introduce a psychological element—something that factors in market sentiment and long-term belief in the technology itself. Your formula captures the utility of the blockchain, but it misses the speculative nature of human behavior. And with something like iEthereum, that matters.”

Raoul tilted his head, intrigued. “Go on.”

Kepin waved his hand, and a new graph appeared on the wall. It displayed iEthereum’s price fluctuations overlaid with major global events—regulatory changes, adoption by tech giants, market crashes.

“The missing variable is faith,” Kepin said. “People buy into crypto because they believe in the future. That belief drives speculative bubbles and crashes. We need to develop a hybrid model—one that factors in not only daily volume and active users but also market sentiment. A ‘Faith Factor,’ if you will.”

Raoul leaned forward, fascinated. “A Faith Factor? You think we can quantify that?”

Kepin’s smile broadened. “Why not? We quantify everything else. Take social media sentiment, for example. We can track tweets, Reddit posts, and YouTube videos to gauge public excitement or fear. Overlay that data with your Pal Method, and you get a much more nuanced picture of value.”

Raoul sat in silence, absorbing the idea. “It’s bold. But isn’t that level of data analysis dangerous? Too much reliance on sentiment, and we risk feeding the very speculative nature we’re trying to control.”

Kepin shook his head. “I’m not suggesting we let sentiment drive the price. I’m saying it’s a component—a crucial one. We can still use your model as a baseline, but we add the Faith Factor to account for the unpredictable.”

The room fell into a thoughtful silence, both men lost in the implications of what had been said. Kepin finally sat down again, tapping his pen on the desk once more.

Raoul leaned back in his chair, his eyes narrowing in deep thought. “I think you may be onto something, Live. The Faith Factor could work—but we need more data. A lot more. Social media sentiment is one thing, but what about institutional interest? Corporate adoption?”

Kepin smiled, nodding. “Exactly. It’s a multi-layered approach. Market psychology, corporate moves, public excitement, utility—all of these factors combined will give us a better valuation model.”

Raoul extended his hand, his respect for the professor clear. “Alright, Kepin. Let’s work on it. Let’s see if we can create something that truly reflects the value of these tokens.”

Kepin shook his hand, his heart racing with excitement. “You’re on.”

As the two men stood, the holograms around them shifted, showing new charts and graphs—indicating the future of their collaboration. The classroom felt alive, buzzing with the energy of discovery. Together, they would take Raoul’s method to the next level, blending math, psychology, and technology into a new valuation model that might just define the next era of cryptocurrency.

And in the heart of MIT, a new partnership had been forged—one that would shape the future of digital finance, one equation at a time.

The following iEtherean Tales include these characters as well.

• An iEtherean Tale #5