Title
Initial Coin Offerings (ICOs): benefits, risks and success measures
Abstract
The initial coin offering is usually defined as a new, innovative way of raising funds used by organizations, companies, or entrepreneurs, attracting funds through a cryptographic exchange in exchange for the coins that can be sold, used for future products or services purchase or profit. This article provides an overview of the evolving ICO market and indicates the main advantages and risks of the ICO. It is pointed out that ICO offers many advantages, such as high liquidity, return on investment, availability, fast capital raising process, minimization of capital raising costs. Nonetheless, the noticeable benefits of ICOs are often available only when companies or investors agree to take considerable risks, caused by the information asymmetry, lack of investor protection, proper regulation and methodical guidance both for investors and entrepreneurs. Considering the novelty, volatility, emerging risks, growing popularity of the ICO market and the lack of research in the scientific literature, it is important to investigate the factors that influence the success of the ICO, which is usually defined as the amount of funds attracted, listing of the coins, return on investment, market capitalization or the duration of the ICO.
Keywords
Initial Coin Offering (ICO), token, blockchain, cryptocurrencies, diversification, FinTech, open innovation
JEL classifications
G15 , G24 , O31 , L26
URI
http://jssidoi.org/jesi/article/469
DOI
Pages
1472-1483
Funding
This research was supported by Kaunas University of Technology, School of Economics and Business, LithuaniaThis is an open access issue and all published articles are licensed under a
Creative Commons Attribution 4.0 International License
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