FungibleValue

FungibleValue is a term used to describe the value representation of fungible assets, where individual units are interchangeable and indistinguishable in economic value. In finance and accounting, fungible value refers to the monetary value assigned to a single unit of a fungible asset, and by extension the total value of a quantity is the per-unit value multiplied by the number of units.

Fungibility is the property that allows units to be exchanged on a one-to-one basis without altering value. Common fungible assets include fiat currencies, standardized commodities, and many financial instruments such as widely traded stocks. In practice, fungible value is determined by market price: the fungible value per unit is the going price, while the fungible value of a position equals price per unit times the quantity held.

In blockchain and digital asset contexts, fungible value is used to describe tokens like ERC-20 tokens, where each token has identical value and representation. This enables straightforward pricing, accounting, and transfer of large quantities.

FungibleValue is contrasted with non-fungible value, where assets have unique characteristics and cannot be substituted on a one-to-one basis. Non-fungible assets require item-specific valuation, as their value depends on distinct attributes of each unit.

Limitations include that real-world factors such as transaction costs, liquidity, and market frictions can cause the per-unit fungible value to vary across markets or over time. Divisibility and denomination can also affect how fungible value is realized in practice.

See also: fungibility, fungible token, non-fungible token, price, market liquidity.