- REMCO Software, Inc.
- 8101 Sandy Spring Road Suite 100B, Laurel MD 20707
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Monetary Model is useful for valuing Cryptocurrencies because it attempts to measure the value provisioned to users of a Cryptocurrency network, then relates that value to token supply and velocity to derive the value of an individual token.
In instant case, we have considered the size of the market (Total Remittance Industry Size) as $ $613B for 2018 & consider 5% CAGR.
For the Year 2018, potential percent penetration (market share) for REMCO and parent has been considered 0.32% i.e transaction value of $ $1,961b. (In the Year 2016 and 2017 Remco parent processed transaction value of $695 Mn). The velocity ( velocity-the average frequency with which a unit of money is spent) for the year 2018 is considered to be 1.1.
After adjusting the transaction value with velocity, we arrived at the value of coin $1,783.27b. We divided the fair value of the coin with the outstanding token 2,000,000,000, & we obtained a value per coin of $ 0.89 for the Year 2018.
|Valuation Year Wise||2018||2019||2020||2021|
|Market Size (Mn)-5% CAGR||6,13,000.00||6,43,650.00||6,75,832.50||7,09,624.13|
|Potential percent penetration||0.320%||1.250%||2.500%||3.700%|
|Value of Coin (Mn)||1,783.27||5,363.75||8,447.91||10,502.44|
|Coins outstanding (Mn)||2,000.00||2,000.00||2,000.00||2,000.00|
|Value Per Coin||0.89||2.68||4.22||5.25|
The Network Value to Transactions (NVT) Ratio is viewed similarly to the stock market PE ratio, which can be used as a proxy to gauge over or undervaluation of digital assets like Bitcoin. The NVT is calculated as Market Cap (Network Value) divided by the transaction volume $. In Instant case, we have taken the average of 90 days NVT ratio of 15 token companies. We have made a specific adjustment on Industry multiple of NVT ratio by giving appropriate small company discount & New Company discount of 40% to Industry average NVT Ratio of 15 Token peer Companies After applying the discount we calculated Industry Adjusted NVT Ratio of 23.28x. After obtaining the industry Adjusted NVT Ratio of 23.28x, we multiplied the same with REMCO parent 2016 & 2017 Transaction Value of $695 Mn to arrive at a Fair REMCO token value. Thus we calculated the Value of Token $16,180.43 b, after dividing the same with the outstanding coin of 2,000,000,000 b. We obtained the fair value of $8.09 per Token.
|Remco Transactions Value Mn-2017||695.00|
|Industry Discounted NRV Mutliple||23.28|
|Value of Coin||16,180.43|
|Coins outstanding (Mn)||2,000.00|
|Value Per Coin||8.09|
Note- NVT is a proxy for fundamental utility value of the network, a 90-day Moving Average is a better proxy for long-term fundamental value than a 28-day Moving Average, hence for valuation of REMCO we have considered 90d NVT Ratio.
|Cash Flow Model|
|Discount Rate- Quarterly||10%|
|PV of CF + Terminal Value||3,94,99,50,354.62|
|Price per Token||1.97|
For Calculating the Fair value of REMCO, We have given equal weights to all three Globally accepted Methods. Although here the point has to be noted that Cash Flow Model & NVT Ratio is most suited for newly launched Tokens.
|Methods Value Weights|
|Fair Value of Token||100%||3.65|
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