Blockchain Token Sale

Excerpt

Token sales (TSs) have emerged as a new way of raising capital on a peer-to-peer basis enabled by blockchain technology. In TSs, an issuing entity sells proprietary cryptographic tokens to finance further project development – often a blockchain-based platform or application (Catalini and Gans 2018). Since the first TS in 2013, the number of TSs and the amount of funding collected has increased rapidly. In 2017, 552 TSs were completed to collect a total amount of more than USD 7 billion, an average of USD 12.75 million per TS. By January 2019, the all-time funding volume of TSs exceeded USD 23 billion, of which EOS, an operating system for decentralized applications (dApps), collected USD 4.1 billion and the messenger app Telegram collected USD 1.7 billion (PWC 2019; Coindesk 2019; ICObench 2019). The new phenomenon of selling cryptographic tokens on the blockchain is also known as a token generation event, token launch, security token offering (STO) or most prominently initial coin offering (ICO). ICOs have come to be associated chiefly with the issuance of utility tokens, while STOs describe a more mature and regulated form of TS in which security tokens are issued. In the following, we use the neutral term token sale as it is not linked to any specific token type. …