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

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.

Decentralized Finance (DeFi): Foundations, Applications, Potentials, and Challenges

“…Lower costs can be achieved by cutting the middlemen and reducing bureaucracy regarding compliance (Arnold et al, 2019). Moreover, given different types of assets, for example, native tokens, fungible tokens, and NFTs, DeFi funding tools are highly customizable to individual use cases and can range from providing utility and ownership such as shares to a token for crowdfunding (Bachmann et al, 2019;Fridgen et al, 2018b). In addition, smart contracts can be used to separate different utilities and authorizations that a token provides to its owner.…”

Electronic Markets on platform culture

“…Based on an in-depth analysis of 131 ICOs collected from diverse sources, they aim at "exploring the ICO jungle" and create a taxonomy that, like the previous paper, comprises 23 characteristics as clustering variables to identify archetypes, in this case the five archetypes visionary, average, liberal, compliant and fundraising ICO. These archetypes are characterized using the taxonomy dimensions and illustrated with an existing ICO example from practice (Bachmann et al, 2022). The research is helpful in understanding the various purposes of conducting an ICO and in navigating as well as mapping the complex field of ICOs.…”