Crypto and Token Valuations
A token valuation determines the fair market value of a digital asset. As digital asset markets continue to evolve, companies issuing tokens—whether fungible, non-fungible, utility, or governance-based—must meet regulatory and reporting standards. Accurate, defensible token valuations are essential for ensuring proper financial reporting, tax compliance, and equity-based or token-based compensation planning. Unlike traditional assets, tokens present unique challenges like complex structures, evolving use cases, and rapidly shifting market conditions. Because of this, token valuations require specialized methodologies and deep technical expertise.
The Purpose
Token valuations are often required when companies offer deferred compensation in the form of token grants or related grants such as SAFTs, SAFTEs, etc. The IRS requires an established fair market value as of the grant date to ensure compliance. Without a credible, defensible valuation, companies may face tax penalties or audit scrutiny.
Unlike traditional assets, tokens pose unique and complex valuation challenges that many providers are not equipped to handle. Accurate token valuations demand specialized methodologies and a deep understanding of digital asset structures, tokenomics, and market behavior.
At Redwood, we bring deep expertise to the crypto space, including the legal and technical relationships between companies and their affiliated foundations or entities. We understand the distinct market dynamics of crypto tokens and leverage rigorous, proven methodologies to deliver accurate, defensible valuations that meet regulatory standards and withstand audit scrutiny.
The Redwood Advantage
Token valuations demand technical depth and a deep understanding of blockchain technology, financial modeling, and the evolving regulatory frameworks. Redwood is one of the few valuation providers equipped to deliver truly defensible token valuations. Our specialized insight into crypto markets, token mechanics, and the legal structures unique to the crypto space sets us apart.
We apply a range of valuation methodologies, carefully tailored to reflect the unique characteristics of each token and its issuing entity.
Built for complexity and trusted for clarity, Redwood delivers valuation insights that empower confident decision-making and drive growth.
Key Contacts
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