Question 1

In 2022, we witnessed the failure of major crypto businesses such as 2AC and Luna. The impacts of these failed businesses have been devasting for investors who have wagered their entire life savings to these platforms. While investigations are ongoing to understand the reasons behind these failures, there were some moments of reflection and soul-searching among the crypto community.

For example, Samuel Bankman-Fried, the founder of the crypto exchange FTX, reflected during an FT interview [1] that he believed less than 100 tokens have real-world value, even though his own exchange has listed in excess of 100 tokens. In short, he believed that most of the crypto tokens will fail and only a selected number will be successful.

In this ECA, we seek to explore and understand the events that are unfolding in front of our eyes and use our understanding to predict the future developments of these new businesses.

Given the large number of crypto tokens listed and traded in a crypto exchange, discuss, and examine how would you evaluate if a listed token has real-world value.