The New Tokenomics of Crowdfunding

Abstract

Whether proxied by the amount raised or the probability that this amount exceeds the soft cap, the factors driving the fundraising success of token offerings have changed considerably over the past 4 years. Possible factors include target market capitalization for the token, genuine signals of the venture's public credibility, price and momentum of ether, domicile of the venture and distribution of the token. There is a large previous literature on this topic, rooted in the entrepreneurial finance and crowdfunding literature, with numerous hypotheses based on signalling theory in its broadest sense. But due to substantial differences in samples, which end before 2020, the results are not only mixed but out of date. We have built the largest and most complete dataset on token offerings, spanning 2017 and 2022. The determinants of the amount raised were robust to different subsamples until the market virtually disappeared during the Covid pandemic. But it resumed in early 2021 and within 12 months had reached an all‐time high in terms of number if not market capitalization of new offerings. During this period the market changed completely, with success now depending mostly on the type of token offering and the choice of launchpad platform.

Digitalization and Resource Mobilization

“…Digitalization introduces unique aspects necessitating updates to existing theories, as identified by the fourth approach. Alexander and Dakos (2024) address this by reviewing the literature on blockchain finance within the 586 I. Inceoglu, T. Vanacker and Silvio Vismara context of entrepreneurial finance and signalling theory. Focusing on initial coin offerings, the paper explores how various token offering and venture characteristics serve as signals, reducing information asymmetry between ventures and prospective investors.…”