Abstract
This case study presents an in-depth financial analysis of the Nickelium project, a blockchain-based tokenization initiative that derives its value directly from the nickel market. Using the proprietary Golden Formula, Nickelium links digital token pricing to spot nickel prices reported by the London Metal Exchange (LME). The objective of this study is to evaluate the project’s financial feasibility by calculating its Internal Rate of Return (IRR) under modeled assumptions for 2026–2028.
1. Background
Nickelium is designed as a commodity-backed digital asset that integrates physical market
fundamentals with blockchain tokenomics. Nickel, as a critical industrial and energy-transition
metal, provides a natural foundation for value anchoring. The Golden Formula developed for
Nickelium introduces a dual-mechanism valuation: a base linkage to nickel spot prices and a
convex premium factor governed by the golden ratio.
The IRR framework provides a quantitative assessment of the project’s expected profitability,
balancing traditional financial metrics with innovative crypto-economic design.
2. Methodology
2.1 The Golden Formula
The token value of Nickelium (NCL) is determined by:
NCL = [Ni + max(10000, (Ni – No)^φ)] / 10000
Where:
• Ni = Nickel spot price (USD/ton)
• No = 25-year low price of nickel, currently fixed at 15,000 USD/ton (Jan 2, 2025)
• φ (phi) = 1.618 (the golden ratio)
• The divisor 10,000 tokenizes nickel value into the NCL unit
This design ensures both stability (through a guaranteed minimum premium of 10,000) and
exponential upside potential as prices rise above the floor.
2.2 Market Data & Assumptions
Baseline nickel spot (Q4 2025): 15,300 USD/ton.
Forward projections are modeled as follows:
Year Assumption Growth Ni (USD/ton)
2026 Moderate recovery 4.5% 15,988.5
2027 EV-sector rebound 5.0% 16,787.9
2028 Full recovery/inflation 6.0% 17,795.2
2.3 Application of the Golden Formula
The resulting token values are:
Year Ni (USD/ton) NCL (USD/token)
2026 15,988.5 8.61
2027 16,787.9 19.97
2028 17,795.2 39.48
2.4 Cash Flow Structure Per Token
• CF0 = –2.5 (initial investment)
• CF1 = +8.61 (2026)
• CF2 = +19.97 (2027)
• CF3 = +39.48 (2028)
Cash Flow Series: [–2.5, 8.61, 19.97, 39.48]
3. Results
The IRR is defined as the discount rate r that satisfies:
NPV = Σ [CFt / (1 + r)^t] = 0
Solving for r yields:
IRR ≈ 444.5% per year.
4. Discussion
The results indicate extraordinary return potential under the modeled assumptions. Even moderate
increases in nickel spot prices lead to disproportionately higher token values due to the exponential
factor (Ni – No)^φ.
Key sensitivities:
• Issuance scale: Greater token issuance magnifies inflows relative to fixed initial costs.
• Market volatility: Sharp declines in nickel spot prices could depress NCL valuations.
• Operational costs: Transaction fees, compliance, and infrastructure costs would reduce net IRR.
5. Conclusion
Under the modeled assumptions, the Nickelium project achieves an Internal Rate of Return (IRR) of
approximately 444.5% per annum. This outcome demonstrates the potential financial attractiveness
of combining commodity markets with blockchain tokenization via the Golden Formula. However,
results are highly dependent on nickel market conditions, issuance strategy, and operational
execution.