How Does the Black-Scholes Model Account for the Volatility Introduced by a New Token?

The Black-Scholes model, used for pricing traditional stock options, requires an input for the volatility of the underlying asset. A new, often highly volatile token can increase the overall volatility of the publicly traded company's stock.

This increased volatility must be factored into the model, resulting in a higher theoretical price for the stock options. The model itself does not directly value the token but accounts for its impact on the stock's price movements.