As digital currency continues to sweep the financial sector, this study investigates the inquiry of whether the success of Initial Coin Offerings (ICOs) is correlated with the fraction of tokens retained by the issuers. ICOs involve the sale of digital assets, typically “utility” tokens, which have specific functions within a platform or product. The study suggests that entrepreneurs signal their quality and commitment to the project by retaining a larger portion of tokens, which may positively impact the success of the ICO. The analysis is supported by a significant increase in capital raised through ICOs over the period studied. This finding is relevant to ongoing debates about the regulatory treatment of ICOs and their potential as a fundraising method in the blockchain space.
De-Crypto-ing Signals in Initial Coin Offerings: Evidence of Rational Token Retention
