A token offering is a novel mechanism that enables firms to raise funding by issuing tokens to external investors. Tokens are digital assets that are cryptographically secured and based on distributed ledger technology (DLT), whereas blockchain technology is the most prevalent type of DLT. Depending on the type of token issued in a token offering, one can distinguish between initial token offerings (ICOs) and security token offerings (STOs). Utility and currency tokens are issued in ICOs, security tokens are issued in STOs. Both mechanisms differ in their degree of regulation as STOs fall under much stricter securities regulations.
Fundraising mechanisms are a prime topic in finance literature as firms require capital to grow, and there is fierce competition for capital. Initial work examining token offerings predominantly provides studies focusing ICOs. However, there is a lack of studies focusing on STOs, with the exception of Lambert et al. (2020). I seek to extend the finance literature by focusing on both ICOs, and STOs. Hence, I provide a comparative analysis of both fundraising mechanisms: ICOs vs. STOs.
Table of contents
List of figures
List of tables
1 Introduction
2 Institutional background
2.1 ICOs and STOs: An overview
2.2 ICO process
2.3 STO process
2.4 A comparison: ICOs vs. STOs vs. IPOs
2.5 Evolution of token offering markets
2.6 Regulatory background
2.6.1 Switzerland
2.6.2 Singapore
2.6.3 United Kingdom
2.6.4 United States of America
2.6.5 European Union
3 Theory and hypotheses
3.1 Asymmetric information
3.2 Signaling theory
3.2.1 Certification effect
3.2.2 Information cascades
4 Data and variables
4.1 Data
4.2 Variables
4.2.1 Dependent variables
4.2.2 Independent variables
4.2.3 Control variables
5 Empirical results
5.1 Descriptive analyses
5.1.1 Model 1
5.1.2 Model 2
5.1.3 Model 3
5.2 Main Results
5.2.1 Model 1
5.2.2 Model 2
5.2.3 Model 3
6 Discussion and conclusion
6.1 Discussion of the main results
6.2 Contributions of this study
6.3 Limitations and avenues for further research
References
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