ICO Market Report 2017. Performance Analysis of Initial Coin Offerings (Presentation Slides)

Haffke, Lars; Fromberger, Mathias

doi:10.2139/ssrn.3309271

Cited by 2 publications

(1 citation statement)

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“…We emphasize that Proposition 2 neither reflects nor explains short-term market developments, e.g., it does not apply to exceptional market phases: First, a simultaneous increase in token value and platform usage can occur during a hype. However, first empirical analysis suggest that the median ICO destroys value of its token holders on average after half a year (Haffke and Fromberger 2018;Momtaz 2019). Second, Proposition 2 only applies if the financial incentive is the rationale for platform participation.…”

Section: Overarching Results and Implicationsmentioning

confidence: 99%

The token’s secret: the two-faced financial incentive of the token economy

et al. 2020

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Multi-sided platforms are omnipresent in today's digital world. However, establishing a platform includes challenges: The platform utility usually increases with the number of participants. At an early stage, potential participants expect the platform utility to be low and lack an incentive to join (i.e., "chicken and egg" problem). Blockchain-enabled utility tokens hold the promise to overcome this problem. They supposedly provide a suitable financial incentive for their owners to join the platform as soon as possible. In the first half of 2018, investors seemed to believe in the presumption and spent more than US$ 17.6 billion in token sales. To date, we know little about this financial incentive in the context of the token economy. For this purpose, we model the token value development and the associated incentives in a multi-sided blockchain-enabled platform. The resulting findings suggest that blockchain-enabled utility tokens can help to overcome the "chicken and egg" problem. However, these tokens lead to contradictory incentives for platform participants, and can even inhibit platform usage. The contribution of our work is twofold: First, we develop one of the first models for token value development. Second, our research contributes to a deeper understanding of the utility token's financial incentive.

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Section: Overarching Results and Implicationsmentioning

confidence: 99%

The token’s secret: the two-faced financial incentive of the token economy

et al. 2020

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Theories of Crowdfunding and Token Issues: A Review

Miglo

2022

JRFM

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Entrepreneurial, innovative and small- and medium-sized firms experience difficulties with raising funds using traditional debt and equity. Consequently, they are constantly looking for new strategies of financing. The latest inventions are crowdfunding and token issues. In contrast to traditional ways of raising funds these innovations: (1) use modern technology (online transactions, blockchain, etc.) much more actively; (2) are usually quicker in reaching potential investors/funders; (3) use more active network benefits such as, for example, a large number of interactions between investors/funders and between funders and firms. These changes are so significant that some experts list them among the top business inventions of the 21st century. This article provides a review of the growing number of theoretical papers in the areas of crowdfunding and token issues, compares their findings with empirical evidence and discusses directions for future research. The research shows that a large gap exists between the theoretical literature and empirical literature.

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ICO Market Report 2017. Performance Analysis of Initial Coin Offerings (Presentation Slides)

Cited by 2 publications

References 0 publications

The token’s secret: the two-faced financial incentive of the token economy

The token’s secret: the two-faced financial incentive of the token economy

Theories of Crowdfunding and Token Issues: A Review

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