Initial Coin Offerings (ICOs): An Introduction to the Novel Funding Mechanism Based on Blockchain Technology

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Chanson, Mathieu; Risius, Marten; Wortmann, Felix
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Initial Coin Offerings (ICOs) are a novel form of funding mechanism that is based on blockchain technology. While ICOs are already the dominating financing paradigm in the blockchain industry, they might also disrupt well-established industries that rely on extant funding systems. ICOs are a recent phenomenon. Hence, research on the topic is scarce and the phenomenon not yet well-understood. To address this research gap, we try to build a basic understanding of ICOs in this paper. More specifically, we identify constituent ICO building blocks by drawing on financialization literature. In addition, we analyze 96 ICOs with respect to these constituent building blocks. Our analysis provides first evidence that ICOs differ considerably regarding the identified building blocks. Based on these insights, we specify future research plans that encourage the development of a well-founded taxonomy and highlight limitations of our study.