It seems like everyday new products, protocols and approaches on how to use and view crypto currency are being introduced and or refined. This often leaves me wondering how all this new information will shift the way we view economics as a whole. So, my aim here is to further expand upon some of my pondering over the course of a few articles. I felt it best to take things a step at a time rather than force everything into 2,500 words. With any luck, this may make things easier for me to define, easier for others to follow and allow for some to offer input if so inclined.

But before I begin, a few things require clarifying in regards to my previous article (and preface to this series) titled “A Peek into Ethereum Token Activity.” First, my use of the phrase “activity and demand” was somewhat redundant and therefore misleading. According to my thoughts, activity is the amount of coins/tokens being demanded by market participants. So moving forward, I’ll refer to the same theory as DeFi & Demand, I know, it’s very catchy and almost overwhelmingly clever.

Another thing I have to point out is that this is modeled after a theory, not a law as I incorrectly stated in my prior writing. It’s important that I make this distinction clear, for in the off chance that I am horribly wrong, I can fall back on this later.

Ok, so now let’s get on with it. You may notice that I’ve taken a few liberties pertaining to the figure presented below. Since this theory is an adaptation of economic equilibrium, based off of supply and demand, I felt it best to appropriate that model and modify it to suit my needs.