Utility Tokens: A Practical Guide on Price Dynamics

By Dr. Demetrios Zamboglou

Token price dynamics and solutions to price impact

To understand the factors that influence utility token prices, it is important to compare and contrast the market dynamics of share prices. This method helps to identify the key factors and fosters a greater understanding of the pricing of utility tokens.

Share price impact

The primary factors affecting share prices are:



Market factors

Company valuation

A company valuation is comprised of further factors, specifically:

  1. Business prospects and growth;
  2. Profitability;
  3. Company size;
  4. Stability and expected performance in the foreseeable future;
  5. Management quality and corporate governance.

In summary, we can aggregate all the above factors into a singular expression:

By tabulating the factors, we can derive a matrix of factors as shown.

Alternatives for fintech companies

Since utility tokens are not securities, it is important to understand that they can still include functions that mimic corporate actions such as dividends. We can also emulate company profitability in order to generate rewards for using utility tokens.

Dividends alternatives


– Demonstrate the existence of utility through the architecture of utility tokens;

– Inform and explain to the user community how utility tokens can be used and demonstrate the monetary savings available to token holders;

– Peripheral factors are also incredibly important to build trust and transparency amongst token holders. Ranging from informative videos, websites and interactive content, all the way through to formal audits, robust legal advice and mutually beneficial terms and conditions.

Solutions to profitability


Launch a mobile phone application, including regular updates and persistent app development to introduce new features and remove latent bugs or inefficiencies. This process would also be underpinned by a rigorous feedback mechanism to gauge token holder satisfaction.

Competition (business / capital market)


– Demonstrate how your particular token is superior to other alternatives via a broad range of websites and media outlets. Investor relations and public relations are essential considerations to maximize the uptake of utility tokens;

– Produce innovative content and formal documentation such as:

– Entering new partnerships with third parties and vendors:

Corporate governance


– Advisors such as:

– A functional management team such as:

– Good partners:

Red Flags


– A new roadmap:

– Ask Me Anything (AMA) sessions help to build trust, provide feedback and allow for key issues to be prioritized:

Solutions to Market


  1. Attract high-profile institutional investors (press release, etc.);
  2. Attract influencers;
  3. Attract high-profile employees;
  4. Create a trading team to market make (stabilize);
  5. List on a reputable exchange (Binance, etc.).

Corporate Activities to Market


– Acquisitions

– Special acquisitions

– Buyback

– Sales and discount

– Structure of capital transparency

– Audit

Exit mobile version