Security Token Offerings

STO vs. ICO: A Theory of Token Issues under Moral Hazard and Demand Uncertainty

“…Theoretical papers on ICOs include, among others, Canidio (2018); Catalini and Gans (2018); Bakos and Halaburda (2018); Cong et al (2018); Li and Mann (2018); Lee and Parlour (2020); Chod and Lyandres (2019); Garratt and van Oordt (2019); Holden and Malani (2019); Miglo (2020d). 4 Research on STOs is in its early stages and it includes Gan et al (2020) and several empirical papers (e.g., Adhami et al 2018;Ante and Fiedler 2019;Lambert et al 2020). In this article, we focus on the analysis of economic ideas behind issuing hybrid tokens that have features of both ICOs and STOs.…”

Linguistic errors and investment decisions: the case of ICO white papers

“…This type of financing has been particularly popular in the earlier days of digital offerings, because of the large flexibility given the lack of proper regulation (see Momtaz 2020b). Security tokens (also referred to as Security Token Offerings or STOs) approximate a more traditional investment product, in which the value of the token is inherently tied to the value of the company, and which are subject to traditional securities law (Lambert et al 2021;Momtaz 2021). 7 Ultimately, these offerings allow investors to receive financial rewards such as interest or dividends from the issuing company Regardless of the nature of the token, parallels can be drawn between ICOs and (i) initial public offerings (IPOs), where firms sell a part of their equity to the public in a stock market and (ii) the crowdfunding market, where entrepreneurs raise money from a heterogeneous set of investors through online platforms.…”

Token Economy

“…Payment tokens include cryptocurrencies, such as Bitcoin or Ripple (XRP). Security tokens correspond to classic securities in their design in that they resemble stocks (Lambert et al 2020). Finally, utility tokens, like vouchers, grant access to services or goods of the respective issuer.…”