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ETH - Future DCF valuation
July 2021
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Scenarios
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Model Inputs1. Bull2. Base3. BearModel Outputs2021
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Average Tx revenue in 2030$7.00$4.00$2.00
2021 net present value ($B)
$1,451
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Discount rate10%10%10%Current price of ETH$2,300
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Total ETH115,000,000115,000,000115,000,000ETH supply115,000,000
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Projected 2021 Tx750,000,000750,000,000750,000,000Implied price of ETH$12,615
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Average Tx revenue Q1 2021$34$34$34Implied appreciation548%
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Profit margin90.00%90.00%90.00%
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CASECAGR22.10%
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2. Base
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$B
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YEARYEAR DATETXSNET CASH FLOWSPRESENT VALUECUMULATIVE PVETH PRICE
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12021750,000,000$2.7$2.5$7$58
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220221,425,000,000$5.1$4.2$14$122
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320232,707,500,000$9.7$7.3$25$215
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420244,332,000,000$15.6$10.7$40$345
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520256,714,600,000$24.2$15.0$60$523
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6202610,071,900,000$36.3$20.5$87$758
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7202714,604,255,000$52.6$27.0$119$1,035
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8202818,985,531,500$68.3$31.9$157$1,363
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9202924,681,190,950$88.9$37.7$198$1,720
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10203029,617,429,140$106.6$41.1$243$2,110
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11203135,540,914,968$127.9$44.8$292$2,535
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12203242,649,097,962$153.5$48.9$345$2,999
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13203351,178,917,554$184.2$53.4$403$3,506
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14203461,414,701,065$221.1$58.2$464$4,035
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15203570,626,906,224$254.3$60.9$528$4,588
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16203681,220,942,158$292.4$63.6$594$5,167
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17203793,404,083,482$336.3$66.5$661$5,745
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182038102,744,491,830$369.9$66.5$727$6,324
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192039113,018,941,013$406.9$66.5$794$6,902
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202040124,320,835,114$447.6$66.5$860$7,481
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212041136,752,918,626$492.3$66.5$927$8,059
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222042150,428,210,488$541.5$66.5$993$8,638
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232043165,471,031,537$595.7$66.5$1,060$9,216
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242044182,018,134,691$655.3$66.5$1,126$9,795
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252045200,219,948,160$720.8$66.5$1,193$10,373
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262046220,241,942,976$792.9$66.5$1,259$10,952
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272047242,266,137,273$872.2$66.5$1,325$11,520
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282048261,647,428,255$941.9$65.3$1,389$12,077
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292049282,579,222,516$1,017.3$64.1$1,451$12,615
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302050299,533,975,867$1,078.3$61.8$1,451$12,615
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Assumptions
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Planned Ethereum updates will be successful
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Internet-level growth rate. Technologies invented after the Internet, such smartphones and social media, tend to grow even faster than the Internet. We generally assume a growth similar to that of the Internet, not faster.
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Lower average transaction fee.Our assumption in the models presented is that the average transaction fee will decrease by 80% to 95% from Q1 2021 levels, leading to an estimated average fee between $2 and $7 (while also assuming significant growth in network value, thus implying a significant increase in the settlement volume driven by these transaction fees).
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Fixed ETH supply of 115m
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Factors that may make the forecast too conservative
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Adoption could be much fast than the Internet
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ETH supply could decrease
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Factors that may make the forecast too aggressive
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Layer 2 could reduce fees dramatically
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ETH supply could increase
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Adoption could be much slower
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