DETERMINANTS OF TOKEN VALUATION IN BLOCKCHAIN ECOSYSTEMS: EVIDENCE FROM DYNAMIC PANEL ANALYSIS OF CROWDFUNDING AND NETWORK EFFECTS

Abstract

This study investigates the determinants of token valuation in blockchain ecosystems, focusing on the roles of crowdfunding support and network centrality. Using a dynamic panel dataset of token projects from 2015 to 2023, we apply the Arellano-Bond Generalized Method of Moments (GMM) estimator to control for valuation persistence and address potential endogeneity. The analysis reveals that crowdfunding backing significantly increases token valuation, while network centrality exerts a positive but nonlinear effect. Additionally, ownership concentration negatively impacts valuation, whereas project age contributes positively. Robustness checks using a nonlinear specification and instrumental variable (2SLS) approach confirm these findings. The results underscore the importance of transparent crowdfunding, diversified network ties, and decentralized ownership structures in driving sustainable token performance. Policy recommendations include enhancing disclosure standards for token offerings, incentivizing decentralized governance, and supporting long-term ecosystem development to ensure healthier digital asset markets.