How Do Stablecoins Affect the Calculation of Network Transaction Value (PQ) for a Native Protocol Token? ▴ Learn

How Do Stablecoins Affect the Calculation of Network Transaction Value (PQ) for a Native Protocol Token?

Stablecoins, which are often used as the medium of exchange on a protocol, can complicate the calculation of the native token's PQ. If the native token is only used for governance or staking, its PQ may only represent the value of the governance rights or staked assets.

If the native token is required to pay fees, its PQ is the value of those fees. Investors must carefully delineate which transactions contribute to the native token's economic utility versus those facilitated by the stablecoin.

The total network economic activity is PQtotal, but only a fraction relates to the native token.

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