Journal ArticleDOI
Are Blockchain Crowdsales the New 'Gold Rush'? Success Determinants of Initial Coin Offerings
Ryan Amsden,Denis Schweizer +1 more
TLDR
In this article, a theoretical framework for how venture uncertainty, venture quality, and investor opportunity set interrelate is developed to evaluate the performance of initial coin offer (ICO) campaigns.Abstract:
Initial Coin Offerings (ICOs) are a new and unregulated form of crowdfunding that raises funds through a blockchain by selling venture-related tokens or coins in exchange for legal tender or cryptocurrencies. In this paper, we establish token or coin tradability as the primary ICO success measure, and we develop a theoretical framework for how venture uncertainty, venture quality, and investor opportunity set interrelate. We use the largest available dataset to date, consisting of 1,009 ICOs from 2015 to March 2018. Our data highlights that venture uncertainty (not being on Github and Telegram, shorter whitepapers, higher percentage of tokens distributed) is negatively correlated, while higher venture quality (better connected CEOs and larger team size) is positively correlated, with ICO success. Moreover, providing a hard cap in a pre-ICO can help investors measure success in the pre-sale. This is another positive signal of funding success.read more
Citations
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Journal ArticleDOI
Initial Coin Offerings: Financing Growth with Cryptocurrency Token Sales
TL;DR: The authors examined which issuer and ICO characteristics predict successful real outcomes (increasing issuer employment and avoiding enterprise failure). Success is associated with disclosure, credible commitment to the project, and quality signals.
Journal ArticleDOI
The geography of initial coin offerings
TL;DR: In this article, the authors studied the emergence of ICOs across 187 countries and found that ICOs take place more frequently in countries with developed financial systems, public equity markets, and advanced digital technologies.
Journal ArticleDOI
Digital Tulips? Returns to Investors in Initial Coin Offerings
TL;DR: This article analyzed a dataset of 2390 completed ICOs, which raised a total of $12 billion in capital, nearly all since January 2017, and found evidence of significant ICO underpricing, with average returns of 179% from the ICO price to the first day's opening market price, over a holding period that averages just 16 days.
Journal ArticleDOI
Digital Tokens and Platform Building
Jiasun Li,William Mann +1 more
TL;DR: A model rationalizing the economic value of digital tokens for launching peer-to-peer platforms by using the blockchain to transparently distribute tokens before the platform begins operation overcomes later coordination failures between transaction counterparties during the platform operation.
Journal ArticleDOI
The Pricing and Performance of Cryptocurrency
TL;DR: In this paper, the authors examined the performance of cryptocurrencies issued in initial coin offerings (ICOs) over a three-year period after the initial exchange listing and examined the average (median) ICO underpricing amount.
References
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Journal ArticleDOI
Job Market Signaling
TL;DR: In this paper, the authors present a model in which signaling is implicitly defined and explains its usefulness, in which the employer is not sure of the productive capabilities of an individual at the time he/she hires him.
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Informational asymmetries, financial structure, and financial intermediation
TL;DR: This paper argued that the average quality is likely to be low, with the consequence that even projects which are known (by the entrepreneur) to merit financing cannot be undertaken because of the high cost of capital resulting from low average project quality.
Journal ArticleDOI
Signaling Theory: A Review and Assessment
TL;DR: Signaling theory is useful for describing behavior when two parties (individuals or organizations) have access to different information as mentioned in this paper, and it holds a prominent position in a variety of management literatures, including strategic management, entrepreneurship, and human resource management.
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Mental accounting matters
TL;DR: Mental accounting is the set of cognitive operations used by individuals and households to organize, evaluate, and keep track of financial activities as discussed by the authors, where outcomes are perceived and experienced, and how decisions are made and subsequently evaluated.