David Yermack Initial Coin Offerings: Financing Growth with Cryptocurrency Token Sales (10 Jul 2018) Available at ECGI: http://www.ecgi.global/working-paper/initial-coin-offerings-financing-growth-cryptocurrency-token-sales
Initial coin offerings (ICOs) are sales of blockchain-based digital tokens associated
with specific platforms or assets. Since 2014 ICOs have emerged as a new financing instrument, with some parallels to IPOs, venture capital, and pre-sale crowdfunding. We examine the relationship between issuer characteristics and measures of success, with a focus on liquidity, using 453 ICOs that collectively raise $5.7 billion. We also employ propriety transaction data in a case study of Filecoin, one of the most successful ICOs. We find that liquidity and trading volume are higher when issuers offer voluntary disclosure, credibly commit to the project, and signal quality.
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