How Does the Concept of ‘Disruption’ Affect the Long-Term Growth Rate Assumption?

The high potential for disruption in the crypto space ▴ where a new protocol can rapidly render an incumbent obsolete ▴ makes the long-term growth rate assumption ($g$) in the Gordon Growth Model highly conservative. A high $g$ suggests a sustainable competitive advantage, which is rare.

Analysts must use a very low $g$ (often close to the long-term inflation rate or zero) to account for the risk that the protocol will be disrupted and its revenue stream will cease or plateau.