Refining Metcalfe’s Law for Digital Blockchain Network Valuation

1. Senior Manager, FIS, Rocky Point, NY, USA.
2. Blockchain Investment Scientist, 100x Investments, Austin, TX, USA.
* Corresponding author. Email: alabi.ken@gmail.com (K.A.); joshuaeick22@gmail.com (J.E.)
Manuscript received June 24, 2025; revised September 22, 2025; published October 14, 2025.

Abstract—We introduce an extended valuation model for the Ethereum Network, drawing from interventions based on Metcalfe's Law to account for network effects and building upon existing standard models of digital assets. The model incorporates an exponential growth decay equation to dynamically adjust circulating supply, considering network upgrades. We employ non-linear regression to capture complex patterns in demand and supply functions at smaller time scales while adhering to the overall trend. Our model evaluates network quality and utility beyond mere size, enhancing predictive accuracy. Empirical results demonstrate that our model offers improved precision over both standard and previous Metcalfe's law models.

Keywords—cryptocurrency, digital blockchain networks, ethereum network, metcalfe’s law, network effects

Cite: Ken Alabi and Joshua Eic, "Refining Metcalfe’s Law for Digital Blockchain Network Valuation," International Journal of Blockchain Technologies and Applications vol. 3, no. 2, pp. 122-137, 2025.

Copyright © 2025 by the authors. This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited (CC BY 4.0)