De-Crypto-ing Signals in Initial Coin Offerings: Evidence of Rational Token Retention

Using the market for initial coin offerings (ICOs) as a laboratory, we provide evidence that entrepreneurs use retention to alleviate information asymmetry. The underlying technology and the absence of regulation make the ICO market well suited to study this question empirically. Using a hand-collected data set, we show that ICO issuers that retain a larger fraction of their tokens are more successful in their funding efforts and are more likely to develop a working product. Moreover, we find that retention is a stronger signal when markets are crowded, and investors do not have as much time to conduct due diligence. This paper was accepted by Will Cong, Special Section of Management Science: Blockchains and Crypto Economics. Supplemental Material: The data files are available at https://doi.org/10.1287/mnsc.2022.4631 .

• 저널Management Science · 69(11) · 6584–6624
• 토픽FinTech, Crowdfunding, Digital Finance · Management Information Systems
• DOI10.1287/mnsc.2022.4631
• 저자Tetiana Davydiuk, Deeksha Gupta, Samuel Rosen