A reasonable price for GRIN

Estimating a price for GRIN is very hard. The chain just launched and the technology and adoption is very uncertain. In addition GRIN initially has a very large inflation making it very hard to factor that into the price.

But getting a rule of thumb for a reasonable price is actually quite easy. Of course my computation depends on a number of factors and you should judge for yourself if you think these are reasonable.

In addition there may be serious flaws in the mimblewimble protocol or other unforeseeable events that make GRIN go to zero, but assuming that the protocol will work out I think a reasonable starting point is looking at the evaluation of Monero. GRIN has some strong advantages above Monero in terms of privacy and scalability, but this comes at a price of reduced friendliness (at least for now).
I personally expect GRIN to become more widely adopted than Monero, but going a little on the conservative side in my price estimation.

Then the question is how to price in the inflation of GRIN. The best way to do so is already taking future inflation into account for the present day price. This would not work if there would be real adoption and supply/demand setting the price, but since GRIN is just speculation on the future that should be quite accurate. We just need to specify a natural timescale when we think that GRIN may gain larger adoption. In crypto it is hard to make long forecasts so I will choose 3 years as a reasonable horizon. But if you want a more conservative computation take 10 years (more really makes no sense in the volatile crypto market.)

I simply compute how many Grins there are mined in 3 years and based on that number find the price each Grin needs to have to give the present day market cap of Monero. This price then gives a good estimate for the price of one Grin should Grin within 3 years be as successful as Monero is now. It makes no assumption on rising or falling crypto prices in the meanwhile. If Monero goes up by 10x in that time, so should the expectation for GRIN. Even though I go 3 years into the future, it is a price for the markets right now.

Doing this I find that one GRIN is worth about 7.90$ and I think this is a rather reasonable price. It would go up when you expect GRIN to outperform Monero and down when you expect more than 3 years until there is some real world use of GRIN.

The current market prices are a bit higher at 8.61$, but actually quite close to my estimate. I will not buy at this moment since I expect that in a month or two the demand will drop as it cannot keep up with the huge current inflation. I expect the price to retest 2$ and think then is a good time to buy. But this may not happen depending on the level of hype around the project and how long we stay in the overall crypto bear market.