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On the performance of blockchain-based token offerings

Author

Listed:
  • Marten Risius

    (The University of Queensland)

  • Christoph F. Breidbach

    (The University of Queensland)

  • Mathieu Chanson

    (ETH Zurich)

  • Ruben Krannichfeldt

    (University of St. Gallen)

  • Felix Wortmann

    (University of St. Gallen)

Abstract

Initial coin offerings (ICOs) and initial exchange offerings (IEOs) are distinct blockchain-based token offerings. Following multiple frauds associated with decentralized and unregulated ICOs, IEOs are emerging as a novel pathway that relies on centralized crypto exchange platforms acting as intermediaries. However, the question as to how this shift affects fundraising processes in what has traditionally been a decentralized environment remains unresolved. We here address this issue by empirically comparing the performance of ICOs and IEOs through the lens of signaling theory, focusing specifically on the impact of social media information across 305 token offerings (ICOs and IEOs). Our work introduces IEOs and explains how and why the volume and sentiment of social media signals may serve as predictors of fundraising performance. We furthermore find that the impact of these electronic word-of-mouth (eWOM) media signals is reduced in the case of IEOs—in the presence of a central cryptocurrency exchange platform mediator. We delineate implications for investors, ventures, platform providers, and regulators alike.

Suggested Citation

  • Marten Risius & Christoph F. Breidbach & Mathieu Chanson & Ruben Krannichfeldt & Felix Wortmann, 2023. "On the performance of blockchain-based token offerings," Electronic Markets, Springer;IIM University of St. Gallen, vol. 33(1), pages 1-19, December.
    • Handle: RePEc:spr:elmark:v:33:y:2023:i:1:d:10.1007_s12525-023-00652-5
    DOI: 10.1007/s12525-023-00652-5
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    References listed on IDEAS

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