Raoul Pal Valuation Methodology for iEthereum

iEther iEthereum or iEth?

Raoul Pal or Raoul Paul?

As Conor McGregor would say, “Who the fook is that guy?”

All jokes aside, Raoul Pal needs to get ahold of his PR team.

And while he is at it, can he contact iEthereum’s PR team? Oh wait, iEthereum is open-source, there isn’t a centralized owner, let alone PR team.

There are as many articles spelling his name Raoul Paul as there are spelling his name Raoul Pal correctly. Don’t hold me to account if I got that backwards. This entire time of listening to his interviews I always thought “Paul” was his last name. It wasn’t until I was needing to give him credit for his macro outlook on a crypto valuation formula that I began to do a little more research. This is when I became more confused. I can type into Google Raoul Pal, as you can see from the image below, and find just as many articles of this former Goldman Sachs derivative banker with his name spelled both ways. Perhaps that is a good thing that “Paul” is googled so often that it leads me back to “Pal.” Brand genius perhaps!

Regardless of how you spell his name, I like listening to Raoul Pal on certain topics. He always has an even keel in his conversations about the economy and more specifically the cryptocurrency, blockchain space. His insight is definitely more of a mainstream perspective with an alternative leaning twist. Meaning, its not pushing to many buttons. Its a perspective, just like everyone else has their perspective. His opinion on certain crypto’s such as XRP and Solana vary greatly from my own opinion on these tokens. Perhaps this is why he is a mega millionaire, if not billionaire, and I am not. The way I look at it… it is good to have as many perspectives as possible to make a better more informed decisions. His insight is valuable and respected.

I recently came across an older interview in which Pal was talking about his macro cryptocurrency outlook and speaking in terms of how to properly equate a cryptocurrency price valuation.

I thought this was a great alternative valuation formula to apply to iEthereum, verses the Metcalfe Law of Valuation of a Network in which I highlighted in a previous article.

I like Metcalfe’s Law as a good fundamental valuation. There are several valuation methodologies that people have applied to the new digital asset class known as cryptocurrencies. I am not sure that any have been deemed to be a one size fits all valuation methodology.

I have found that many of the methodologies to equate value have been more useful during bear markets as a means to be forward looking to a price level in which you can expect when the market turns bullish.

Metcalfe’s law is simple. 

(# of Users) X (# of Users) / Maximum Supply = Token Price

Using Current Data

4534 Holders X 4534 Holders / 18,000,000 = $1.14 per iEthereum

I find this valuation formula to be very trustworthy and accurate, in general terms. FYI however, in regards to iEthereum, this formula has yet to see the price be realized. If you are looking for something that is 100%, with no delineation, I don’t believe you will find an absolutely precise price modeling formula in regards to cryptocurrency. What we are looking for is a general ball park value in which somebody can make a decision with a higher success rate factor in context of price realization. We believe, iEthereum will realize this fundamental price at some point and our general valuation will come to pass.

Realized value verses the fundamental value are two opposite sides to the same coin. In this example, iEthereum would be the token in which we are attempting to put a valuation on. The fundamental value is on one side of the token, recognized by performing the above equation and coming to a written valuation of iEthereum being $1.14. The other side of the iEthereum token is the realized priced value that currently sits around $0.02 - $0.12 on the open market.

We are always seeking different valuation models to apply to iEthereum. As there are several methodologies; I think this is a fun avenue to seek in providing additional iEthereum content for this blog site into the future.

With this most recent video I watched and listened to Raoul Pal, he reminded me of his own crypto valuation model he has deemed to be accurate enough for making decisions.

Lets apply this methodology to iEthereum.

Raoul Pal Crypto Valuation Model

(Daily Transaction Volume by Dollar) X (Active Users) =Total Market Capitalization

(Total Market Capitalization) / (Max Token Supply) = Price per Token

There are a few assumptions with this equation that are relevant in consideration with a low volume, small cap coin such as iEthereum.

1. iEthereum has some days it does $50 in daily transaction volume. Some days it does $8,000 in daily volume. This will change the equation drastically depending on when the math is performed. Perhaps taking a monthly average for daily transaction volume by dollar would be more suitable.

2. iEthereum’s price is heavily manipulated between $0.02 and $0.13. If we are taking Daily Transaction Volume in dollar terms; this can fluctuate the total transaction volume by dollar value greatly. 25k iEthereum traded on the day at $0.02 is equal to $500 daily transaction volume by dollar. 25k iEthereum traded on the day at $0.13 is equal to $3,250 daily transaction volume by dollar.

3. And Active users is defined by holders, which can be applied differently to the equation. Is a holder an active user if they bought 3 years ago and are hodling for the future? Good question and proper placement for assumptions into the equation. You decide what standard deviation you would like to use. In this article, we equate all holders as active holders.

At time of this writing, the iEthereum price is $0.11 and daily transaction volume of 99,000 iEthereum, priced in dollars at $0.11 is $10,890. Active Users will be represented by 4533 wallet holder addresses.

Lets apply this data into the equation known as the Raoul Pal Crypto Valuation Model!

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