# kaal:claim:4033886-026

**Claim.** The main obstacle to digital asset market liquidity may be that the number of token holders has not continued to expand exponentially year over year; a larger stakeholder base would deepen liquidity and permit seamless entry and exit.

**Type.** mechanism  **Support.** argued

**Holds when.**

- centralized digital asset exchange markets

**Source quote.**

> The main issue may be that the number of token holders have not continued to expand exponentially year over year. Having a greater number of stake holders may result in the deeper liquidity in the market, which would in turn allow for seamless movement in and out of the market.

**From.** Wulf A. Kaal, Samuel Evans, Hayley Howe, *Digital Asset Valuation* (2022), IV.1 Market Pricing, page 29

**Cite as.** Wulf A. Kaal, Samuel Evans, Hayley Howe, Digital Asset Valuation (2022). SSRN: https://ssrn.com/abstract=4033886

**Verify.** sha256 of source PDF `52ba05b1292b1be4bfaf1ee5cf56b14fea9c196d870603e794d7ee316df129bd` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20et%20al.%20-%202022%20-%20Digital%20Asset%20Valuation.pdf

**Failure mode.** thin holder base  (family: liquidity-and-market-structure-failure)

**Topics.** defi, tokenomics, economics

**Keywords.** liquidity, token-holders, market-depth, crypto-exchanges

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