Auction design settings and investor behavior of small and large token sales

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Type and Duration

FFF-Förderprojekt, January 2022 until December 2022 (finished)


Chair in Finance

Main Research

Wealth Management


How to effectively and efficiently fund businesses has been an ongoing discussion for multiple decades. Cheap and convenient access to financial resources is key for young and innovative companies to sustain growth and remain competitive. One of the most popular avenues embraced by innovative ventures to finance growth is through crowdfunding campaigns, among which the issuance of digital tokens has been prominent, especially with the exponential growth of digital currencies over the last few years. Digitally issued tokens are based on the blockchain technology, a decentralized, distributed and fully traceable peer-to-peer system, with no central trusted coun-terparty. In a token sales process, the issuer sets up a crowd sale smart contract that follows arbi-trary, pre-specified rules which will execute an automated sequence of code and e.g. lead to an ownership transfer of an underlying asset or company shares. The smart contract can specify a variety of different properties and settings such as token sale duration, funding or valuation caps, price discounts, regulatory or security aspects, etc. Therefore, signaling the right settings and properties in the transparent smart contract is essential to attract investors.

Between January 2016 and August 2019, over USD 31bn were raised via Token Sale Offerings which has substantiated the success of innovative financing forms for businesses as additional options to raise capital. One specific characteristic of Token Sales as a form of financing is the high number of setup options a token issuer has when one programs the token sale.

While some research on ICO success factors has been conducted, to the best of our knowledge there is no research paper that is based on unbiased, primary data which include smaller and larger ICOs. In our work we aim to gain knowledge regarding smaller and larger ICOs and understand how investors interact with crowd sale contracts.

Principal Investigator