Beyond Cash Flows - A Multi-Layer Valuation Framework for Ethereum

Oct 13, 2026

Upload by lilac

Prior research on cryptoasset valuation largely adapts discounted cash flow (DCF) models by treating staking rewards and transaction fees as productive cash flows, while under-accounting for monetary characteristics and strategic flexibility in decentralized platforms. This study tests whether cashflow-based approaches systematically undervalue Ethereum. A multi-layer valuation framework integrates a DCF model, a monetary premium benchmarked to gold using relative scarcity and adoption, and a real option uplift capturing future expansion potential.

LanguageEnglish

CategoryGeneral

FormatPDF

Pages9

Reading Time3 min

AccessFree to download

Abstract

Keywords

1. Introduction

2. Theoretical Background

Beyond Cash Flows: A Multi-Layer Valuation Framework for Ethereum Vladimir Kovšca 1 , Zrinka Lacković Vincek 1 , Suzana Keglević Kozjak 1 1 University of Zagreb Faculty of Organization and Informatics, Pavlinska 2, Varaždin, Croatia Abstract - Prior research on cryptoasset valuation has largely adapted discounted cash flow (DCF) models by treating staking rewards and transaction fees as productive cash flows, while insufficiently accounting for monetary characteristics and strategic flexibility inherent to decentralized platforms. This study investigates whether such cashflow based approaches systematically undervalue Ethereum. The central hypothesis is that Ethereum’s intrinsic value cannot be adequately explained by DCF valuation alone, and that monetary premium and technological optionality constitute economically significant components of value. To examine this hypothesis, a multi-layer valuation framework is applied using network and market data from 2022–2025, combining a DCF model, a monetary premium benchmarked against gold based on relative scarcity and adoption, and a real option uplift reflecting future expansion potential. Monte Carlo simulation is employed to test the robustness of the results. The findings indicate that while DCF-based valuations remain relatively stable, total intrinsic value is highly sensitive to assumptions regarding monetary adoption and strategic optionality. These results underline the importance of layered valuation frameworks for decentralized platforms. Keywords-Cryptoasset valuation, Ethereum, DCF, monetary premium, Real Option Theory. DOI: 10. 18421/TEM152-06 [https://doi.org/10.18421/TEM152-06](https://doi.org/10.18421/TEM152-06) Corresponding author: Vladimir Kovšca, University of Zagreb Faculty of Organization and Informatics, Pavlinska 2, Varaždin, Croatia [Email:](Email: vladimir.kovsca@foi.unizg.hr)[ ](Email: vladimir.kovsca@foi.unizg.hr)[vladimir.kovsca@foi.unizg.hr](Email: vladimir.kovsca@foi.unizg.hr) [Received: 01 July 2025.](Received: 01 July 2025.) Revised: 24 December 2025. Accepted: 16 January 2026. Published: 27 May 2026. © 2026 Vladimir Kovšca et al.; published by UIKTEN. This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivs 4.0 License. The article is published with Open Access at [https://www.temjournal.com/](https://www.temjournal.com/) 1. Introduction The valuation of cryptoassets presents a unique challenge to conventional financial methodologies due to their hybrid nature, combining characteristics of productive assets, commodities, and technological platforms. Among these assets, Ethereum occupies a distinct position. Since its launch in 2015, Ethereum has evolved into the leading decentralized smart contract platform, supporting a wide range of applications, from decentralized finance (DeFi) to non-fungible tokens (NFTs) and real-world asset (RWA) tokenization. Following the transition from Proof of Work to Proof of Stake in September 2022 (commonly referred to as “The Merge”), Ethereum’s economic model underwent a fundamental transformation [1] . Validators now secure the network in exchange for staking rewards, representing a consistent and measurable stream of productive cash flows. In addition, the introduction of Ethereum Improvement Proposal 1559 (EIP-1559) fundamentally altered the supply dynamics by implementing a mechanism that systematically burns a portion of transaction fees, introducing deflationary pressures on the total supply of ETH [2] . These developments necessitate a re-evaluation of how Ethereum’s intrinsic value should be measured. Traditional DCF models, while capable of capturing productive cash flows, fail to fully incorporate the monetary premium resulting from ETH’s emerging role as a decentralized store of value, nor do they account for Ethereum’s real option value associated with future technological expansion. Consequently, a comprehensive scientific framework is re

FAQs

What limitation of DCF-based valuation motivates this study?

Prior work largely treats staking rewards and transaction fees as productive cash flows, without fully capturing Ethereum’s monetary characteristics and technological optionality.

What are the key components of the proposed multi-layer valuation framework?

The framework combines a DCF model, a monetary premium benchmarked against gold via relative scarcity and adoption, and a real option uplift reflecting future expansion potential.

How do the findings relate DCF stability to sensitivity of intrinsic value?

DCF-based valuations remain relatively stable, but total intrinsic value is highly sensitive to assumptions about monetary adoption and strategic optionality.

Oct 13, 2026

Upload by lilac