Initial Coin Offerings, Speculation, and Asset Tokenization

• 成果类型: Article
• 署名作者: Gan, Jingxing (Rowena); Tsoukalas, Gerry; Netessine, Serguei
• 署名单位: Southern Methodist University; University of Pennsylvania
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2020.3796
• 发表日期: 2021
• 关键词: asset tokenization; Blockchain; Crowdfunding; Cryptocurrency; initial coin offerings; ICOs; moral hazard; security token offerings; STOs; speculators; tokenized inventory

摘要

Initial coin offerings (ICOs) are an emerging form of fundraising for blockchain-based startups. We examine how ICOs can be leveraged in the context of asset tokenization, whereby firms issue tokens backed by future assets (i.e., inventory) to finance growth. We (i) make suggestions on how to design such asset-backed ICOs-including optimal token floating and pricing for both utility and equity tokens (a.k.a. security token offerings)-taking into account moral hazard (cash diversion), product characteristics, and customer demand uncertainty; (ii) make predictions on ICO success/failure; and (iii) discuss implications on firm operating strategy. We show that in unregulated environments, ICOs can lead to significant agency costs, underproduction, and loss of firm value. These inefficiencies, however, fade as product margins and demand characteristics (mean/variance) improve, and they are less severe under equity (rather than utility) token issuance. Importantly, the advantage of equity tokens stems from their inherent ability to better align incentives and thus continues to hold even absent regulation.