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Tarzan and chain: exploring the ICO jungle and evaluating design archetypes

Author

Listed:
  • Nina M. Bachmann

    (University of Augsburg)

  • Benedict Drasch

    (Project Group Business & Information Systems Engineering of Fraunhofer FIT
    University of Bayreuth)

  • Gilbert Fridgen

    (Project Group Business & Information Systems Engineering of Fraunhofer FIT
    University of Bayreuth
    University of Luxembourg)

  • Michael Miksch

    (University of Augsburg)

  • Ferdinand Regner

    (University of Augsburg)

  • André Schweizer

    (Project Group Business & Information Systems Engineering of Fraunhofer FIT
    University of Bayreuth)

  • Nils Urbach

    (Project Group Business & Information Systems Engineering of Fraunhofer FIT
    University of Bayreuth
    Frankfurt University of Applied Sciences)

Abstract

The phenomenon of a blockchain use case called initial coin offering (ICO) is drawing increasing attention as a novel funding mechanism. ICO is a crowdfunding type that utilizes blockchain tokens to allow for truly peer-to-peer investments. Although more than $7bn has been raised globally via ICOs as at 2018, the concept and its implications are not yet entirely understood. The research lags behind in providing in-depth analyses of ICO designs and their long-term success. We address this research gap by developing an ICO taxonomy, applying a cluster analysis to identify prevailing ICO archetypes, and providing an outlook on the token value market performance for individual archetypes. We identify five ICO design archetypes and display their secondary market development from both a short-term and a long-term perspective. We contribute to an in-depth understanding of ICOs and their implications. Further, we offer practitioners tangible design and success indications for future ICOs.

Suggested Citation

  • Nina M. Bachmann & Benedict Drasch & Gilbert Fridgen & Michael Miksch & Ferdinand Regner & André Schweizer & Nils Urbach, 2022. "Tarzan and chain: exploring the ICO jungle and evaluating design archetypes," Electronic Markets, Springer;IIM University of St. Gallen, vol. 32(3), pages 1725-1748, September.
    • Handle: RePEc:spr:elmark:v:32:y:2022:i:3:d:10.1007_s12525-021-00463-6
    DOI: 10.1007/s12525-021-00463-6
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    References listed on IDEAS

    as
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    Cited by:

    1. 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.
    2. Rainer Alt, 2022. "Electronic Markets on platform culture," Electronic Markets, Springer;IIM University of St. Gallen, vol. 32(3), pages 1019-1031, September.
    3. Oscar Lage & María Saiz-Santos & José Manuel Zarzuelo, 2022. "Decentralized platform economy: emerging blockchain-based decentralized platform business models," Electronic Markets, Springer;IIM University of St. Gallen, vol. 32(3), pages 1707-1723, September.

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    More about this item

    Keywords

    Blockchain; ICO; Taxonomy; Archetypes; Success analysis;
    All these keywords.

    JEL classification:

    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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