IDEAS home Printed from https://ideas.repec.org/p/chf/rpseri/rp1978.html
   My bibliography  Save this paper

Optimal Financing with Tokens

Author

Listed:
  • Sebastian Gryglewicz

    (Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE))

  • Simon Mayer

    (Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE))

  • Erwan Morellec

    (Ecole Polytechnique Fédérale de Lausanne; Swiss Finance Institute)

Abstract

We develop a unifying model of the optimal issuance and design of tokens in the presence of frictions typical to the financing of entrepreneurial projects, such as the need to raise outside funds to finance platform development and the ensuing agency conflicts between platform developers and outsiders. Tokens possess utility features when they serve as the transaction medium on the platform. They possess security features when they distribute dividends. The paper shows how the optimal provision of utility and security features relates to financing needs, moral hazard, and platform characteristics and specifies the conditions under which initial coin offerings or security token offerings are optimal for platform financing.

Suggested Citation

  • Sebastian Gryglewicz & Simon Mayer & Erwan Morellec, 2019. "Optimal Financing with Tokens," Swiss Finance Institute Research Paper Series 19-78, Swiss Finance Institute.
    • Handle: RePEc:chf:rpseri:rp1978
    as

    Download full text from publisher

    File URL: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3485880
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Anton Miglo, 2021. "STO vs. ICO: A Theory of Token Issues under Moral Hazard and Demand Uncertainty," JRFM, MDPI, vol. 14(6), pages 1-35, May.
    2. Barth, Andreas & Laturnus, Valerie & Mansouri, Sasan & Wagner, Alexander, 2021. "ICO analysts," VfS Annual Conference 2021 (Virtual Conference): Climate Economics 242429, Verein für Socialpolitik / German Economic Association.
    3. Ye Li & Simon Mayer & Simon Mayer, 2021. "Money Creation in Decentralized Finance: A Dynamic Model of Stablecoin and Crypto Shadow Banking," CESifo Working Paper Series 9260, CESifo.
    4. Cong, Lin William & Li, Ye & Wang, Neng, 2022. "Token-based platform finance," Journal of Financial Economics, Elsevier, vol. 144(3), pages 972-991.
    5. Jingxing (Rowena) Gan & Gerry Tsoukalas & Serguei Netessine, 2021. "Initial Coin Offerings, Speculation, and Asset Tokenization," Management Science, INFORMS, vol. 67(2), pages 914-931, February.
    6. Lin William Cong & Yizhou Xiao, 2021. "Categories and Functions of Crypto-Tokens," Springer Books, in: Maurizio Pompella & Roman Matousek (ed.), The Palgrave Handbook of FinTech and Blockchain, edition 1, chapter 0, pages 267-284, Springer.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:chf:rpseri:rp1978. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ridima Mittal (email available below). General contact details of provider: https://edirc.repec.org/data/fameech.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.