Are Blockchain Crowdsales the New 'Gold Rush'? Success Determinants of Initial Coin Offerings

Amsden, Ryan; Schweizer, Denis

doi:10.2139/ssrn.3163849

Cited by 123 publications

(113 citation statements)

References 25 publications

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“…Fisch (2018) uses a sample of 238 ICOs campaigns between 2016 and 2017 and finds that the underlying technology of a project determines the amount of funding, while venture characteristics are less relevant. Amsden & Schweizer (2018) show in their sample of 1009 projects between 2015 and 2017 that venture uncertainty is negatively correlated and venture quality is positively correlated to ICO success. The term "success" is somewhat misleading, as it can be applied to funding success, venture success, secondary market access or return on investment.…”

Section: Of 19mentioning

confidence: 99%

Blockchain-Based ICOs: Pure Hype or the Dawn of a New Era of Startup Financing?

Ante¹,

Sandner²,

Fiedler³

et al. 2018

Preprint

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This study explores the determinants of ICO success, where success is defined as the amount of capital a project was able to raise. ICOs are a tool for startups in the blockchain ecosystem to raise early capital with relative ease. The market for ICOs has grown at a rapid pace since its start in 2013. We analyze a unique dataset of 278 projects that finished their ICOs by August 2017 to assess determinants of funding success that we derive from the crowdfunding and venture capital literature. Our results show that ICOs exhibit similarities to classical crowdfunding and venture capital markets. Specifically, we identify resemblances in determinants of funding success regarding human capital characteristics, business model quality, project elaboration and social media activity.

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Section: Of 19mentioning

confidence: 99%

Blockchain-Based ICOs: Pure Hype or the Dawn of a New Era of Startup Financing?

Ante¹,

Sandner²,

Fiedler³

et al. 2018

Preprint

View full text Add to dashboard Cite

show abstract

“…Adhami et al (2018) collected very basic data on a sample of ICOs which mostly ran in 2017. Fisch (2019), Amsden and Schweizer (2018), Blaseg (2018) and Cerchiello et al (2019) use more recent samples and attempt to identify the success factors behind ICOs by looking at the funds raised and token listing status. Adhami and Giudici (2019) study the effect of the governance signals of ICO-backed projects such as token rights, institutional setting and team quality.…”

Section: Literature Reviewmentioning

confidence: 99%

Serial and large investors in initial coin offerings

Boreiko

Risteski

2020

Small Bus Econ

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This study is the first to provide systematic evidence regarding investor behaviour in initial coin offerings (ICOs), their investment patterns and their role in the success of campaigns. Using hand-collected data on 472 public token sales over the period of 2013-2017, we advance the ICO literature by demonstrating that some contributors often invest in more than one campaign, and such serial investors contribute earlier. However, they are not more informed and fail to pick betterquality ICOs. Only large serial investors invest more in campaigns that raise more funds, attract more contributors, are more likely to reach their hard caps, and distribute tokens that are listed on crypto exchange. Our findings raise the question of whether regulatory or industry self-regulation agreements on information provision measures are needed to protect smaller retail ICO investors that exhibit naïve reinforcement learning behaviour.

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“…Regulators have also focussed lots of attention on ICOs. These are considered to pose many risks, particularly with regard to retail investors [13]. The risks associated with an investment in the tokens issued through an ICO are much higher than the traditional form of investing in regulated financial instruments.…”

Section: Regulatory Challengesmentioning

confidence: 99%

Emerging regulatory approaches to blockchain based token economy

Ferreira

2020

The JBBA

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Blockchain-enabled digital scarcity has opened up a whole new dimension of possibilities for the token economy, particularly with regard to rights and assets that have not been traded electronically before. Blockchain-based tokenization of rights and assets has also brought a new set of legal and regulatory challenges. Regulators and legislators are yet to address many of the issues raised by blockchain-based tokenization, from decentralisation and token characterisation to cross-border harmonisation and regulatory compliance with traditional market infrastructure. Lack of regulatory alignment can undermine many of the benefits of the token economy. Lack of legal certainty may not only stifle innovation and slow down mainstream adoption of blockchainbased tokenization, but can also raise the risks for investors and harm the reputation of the industry. The emerging regulations vary in approach. Liechtenstein became the first country to have a comprehensive technology-neutral regulation of the token economy. Malta and Singapore also represent progressive jurisdictions for blockchain regulation. However, most jurisdictions, including the United States and the European Union, have not yet formed a clear policy for blockchain regulation, and many legal questions remain open. The paper examines whether there is an emerging predominant regulatory approach or prevailing regulatory direction for the future of the token economy. It also highlights the existing regulatory void and divergent approaches to blockchain-based tokenization. Finally, the paper concludes that there is an urgent need to provide a clear legal and regulatory framework if the potential of the token economy is to be realised.

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Are Blockchain Crowdsales the New 'Gold Rush'? Success Determinants of Initial Coin Offerings

Cited by 123 publications

References 25 publications

Blockchain-Based ICOs: Pure Hype or the Dawn of a New Era of Startup Financing?

Blockchain-Based ICOs: Pure Hype or the Dawn of a New Era of Startup Financing?

Serial and large investors in initial coin offerings

Emerging regulatory approaches to blockchain based token economy

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