# Review of Blockchain Tokens Creation and Valuation
## 6 Discussion  
The creation and valuation of blockchain tokens and their associated applications pose technical and economic challenges, making them risky assets for investors. This study reviews the factors influencing token investment and valuation, including the quality of the white paper, issuance country, token supply, regulation, voting rights, price-cost ratio, and the number of tokens sold. The tokens have widespread use in various domains, the most relevant use cases dealing with the digitization of virtual and physical assets, accountability, and traceability usual in smart grids or supply chain management, social governance, and art and gamification. Our analysis highlights the significant impact of these factors on stakeholders' interest in tokens, their careful consideration being essential for positive outcomes of new applications. Navigating the complex and evolving regulatory legal and regulatory compliance for tokens can be a significant challenge. Different jurisdictions may have different rules and classifications for tokens, and compliance is crucial to avoid legal issues. Starting from having laws and taxation mechanisms for such digital assets remains an area that could benefit for further investigation since they cannot always be clearly defined from a location perspective and can be seen as global, rather than country specific assets, resulting in unclear legal obligations. The valuation of a token is linked to the equilibrium between supply and demand as well as to social incentives, such as participatory governance, that may lead to increased token ownership and increased demand. Other factors such as market conditions, economic influences such as interest rates, and regulatory policies may have a significant influence on token valuation, while the collective behavior of people can also contribute to the formation of trends, resulting in both upward and downward price fluctuations. Speculation drives price fluctuations (even on short periods) as traders prioritize predicting price movements over token utility while token inclusion in index funds may boost investor demand. Cryptocurrencies and tokens are known for their price volatility making it challenging to determine a stable and accurate valuation. Many tokens do not have intrinsic value such as traditional assets. Their value is often driven by speculation and market sentiment, making valuation less straightforward. While a certain difference between pure digital assets and the ones backed by real assets exists, the rise in pricing is not consistent. To counteract this ongoing challenge, exploring innovative approaches to attach intrinsic value to tokens and developing standardized methods to assess their worth could open new opportunities for addressing this valuation challenge and while also enhancing market stability. Market sentiment also plays a significant role in token valuation. Positive or negative news and events can have a substantial impact on prices. One challenge that seems to persist regards the herd behavior replicated across social networks, where investors rely heavily on each other, rather than on their own risk assessment and investment analysis. This behavior has the undesired effect of generating further ripples effect due to its cumulative power,creating higher market movements and, hence destabilizing the market. While having more informed investors could mitigate some of its effects, this cannot be fully resolved, being also an historical issue on the traditional markets. Traditional assets have fundamental metrics (e.g., earnings, assets) for valuation. Cryptocurrencies often lack these, making it harder to apply traditional valuation methods. To tackle this obstacle, the development of specialized metrics tailored to crypto and token market remains an ongoing challenge, and while certain solutions exist, such as on-chain activity, network participation and the token utility, these metrics could further improve and refined.