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Piecing it Together Pt. 5 — Token Velocity

Token Velocity is a subject of growing importance and interest within the blockchain industry. Simply put, token velocity refers to the number of times a token will change hands within a given year. For reference, the US dollar has a velocity of approximately 5.623. A token’s velocity has a direct impact on the value of the network — a high velocity will cause an asset to be devalued, where as a low velocity results in difficulty liquidating the asset, and as such, difficulty realizing the asset’s value.

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