I think people are abusing the Equation of Exchange. Reliance on this oversimplified equation to value “crypto-assets” misses important nuances.
The tragedy of using ill-fitted equations to model a new reality is akin to abusing analogies to understand something you’ve never seen before.
A small portion of the time you might be lucky & your equation accidentally fits. The majority of the time however, you’d be wildly off the mark.
MV=PQ works if the token in question represents an established, widely-used money, such as the US Dollar.
But MV=PQ doesn’t work for a brand new asset such as Bitcoin that is still early in its adoption. And it especially does not work for altcoins & the entire category of so-called “utility tokens”.
The reason is the PQ part. PQ assumes a token can capture most of the economic value of the network/service that it tries to represent.
PQ for Bitcoin hasn’t been established yet. Bitcoin is still very early in its quest to capture a significant portion of global GDP.
PQ for altcoins, if they compete with BTC to be money (and they have to), also haven’t been established. BTC is way ahead of them in this regard.
Even if your altcoin is supposedly designed for “dApps” not money, it still needs to succeed in being money first. This includes Ethereum. Otherwise your incentive scheme using native token won’t work.
PQ for “utility tokens” is even further behind in this race. In fact, if Bitcoin ends up capturing the PQ of all economic activity, your utility tokens might not be able to capture anything at all.
The assumption that you’d be able to lock users into exclusively using your token for your decentralized network is naive. Even if decentralized token-based networks work, one can hold only bitcoins & exchange them for these tokens at the last minute. Meaning it will be Bitcoin that actually captures your network value.
Remember: money is the ultimate utility token. The utility of money encompasses all sub-utilities.
For more on why utility tokens make absolutely no sense, read here.