TOKEN OFFERINGS : A REVOLUTION IN CORPORATE FINANCE?

PAUL P. MOMTAZ | Ph.D. Candidate, Anderson School of Management, UCLA
KATHRIN RENNERTSEDER | Consultant, Financial Advisory, Deloitte
HENNING SCHRÖDER | Assistant Professor of Corporate Finance, University of Hamburg, and Hamburg Financial Research Center

Token offerings or initial coin offerings (ICOs) are blockchain-based smart contracts designed to raise external finance without an intermediary. The new technology might herald a revolution in entrepreneurial and corporate finance, with soaring market growth rates over the last two years.

This paper surveys: 

• Market evolution
• Offering mechanism
• Token types

The paper also presents stylized facts on the pricing and long-term performance of ICOs and examines lessons learned from the first wave of token sales.