> with a crypto coin, what is the value tied to? In the specific case of ethereum ERC20 tokens [1], it depends on how the mechanism design uses the token, ther

> with a crypto coin, what is the value tied to? In the specific case of ethereum ERC20 tokens [1], it depends on how the mechanism design uses the token, there's no general answer. I can give 3 specific examples. MKR stablecoin (https://github.com/makerdao/docs/blob/master/Dai.md https://github.com/makerdao/docs/blob/master/Dai.md): users of the collateralized debt positions system pay fees for using the service (because they want to take margin long positions, or because they want to issue some stablecoins), those fees go to MKR holders (the mechanism for this has changed over time, but it could be through dividends, or buy-and-burn). In return MKR holders provide a service by having MKR be one "line of defence" in undercollatiralization scenarios (new MKR is minted and auctioned). REP (http://blog.augur.net/for-reporters-a-guide-to-rep-tokens/ http://blog.augur.net/for-reporters-a-guide-to-rep-tokens/) - users of Augur's prediction markets pay fees to REP holders, who in return participate as reporters in the prediction market. Decentralized exchanges (0x and Kyber Network are some that have recently ICO'd) - generally users of the exchanges (who consumer services like liquidity, order routing and matching) pay fees to the token holders, somehow. I'm less familiar with these. The fact that users pay fees is enforced by smart contracts. There is also some thoughts on a general framework for valuing these tokens here http://vitalik.ca/general/2017/10/17/moe.html http://vitalik.ca/general/2017/10/17/moe.html. > And what happens when the company shuts down In a "proper" decentralized application there's no centralized company that can unilaterally decide to "shut things down". All the projects I mentioned above aim to in the long run behave like this. Notes [1] of course, not all ICOs are of ethereum ERC20 tokens, eg recent ones are EOS, Tezos, arguably Polkadot. But I am much less able to talk about how the token economics of those tokens.