Growing entrepreneurship with crypto tokens

Wei Chen, Weifeng Li, Karen Xie

Research output: Chapter in Book/Report/Conference proceedingConference contribution

Abstract

The advent of crypto tokens has enabled ventures to raise funding through initial coin offerings (ICOs). As of 2019, ventures worldwide have raised over $27 billion from token-based financing. Yet, crypto tokens' developmental value to ventures is less understood but of significant interest to entrepreneurs and policymakers. In this study, we examine the developmental value of crypto tokens through the lens of token liquidity obtained on secondary market exchanges. Specifically, we study how exchange-listed tokens affect a venture's growth toward application development. We study a sample of 1,285 ventures that have collectively raised $15.6 billion in ICO funding and committed 28.4 million code updates to application development. We find that ventures with exchange-listed tokens experienced more tangible growth relative to counterpart ventures without tokens listed on exchanges. The mechanism centers on demand discovery and price change that facilitate application development. Our findings indicate that access to token liquidity has important implications for venture growth.

Original languageEnglish (US)
Title of host publicationInternational Conference on Information Systems, ICIS 2020 - Making Digital Inclusive
Subtitle of host publicationBlending the Local and the Global
PublisherAssociation for Information Systems
ISBN (Electronic)9781733632553
StatePublished - 2020
Event2020 International Conference on Information Systems - Making Digital Inclusive: Blending the Local and the Global, ICIS 2020 - Virtual, Online, India
Duration: Dec 13 2020Dec 16 2020

Publication series

NameInternational Conference on Information Systems, ICIS 2020 - Making Digital Inclusive: Blending the Local and the Global

Conference

Conference2020 International Conference on Information Systems - Making Digital Inclusive: Blending the Local and the Global, ICIS 2020
Country/TerritoryIndia
CityVirtual, Online
Period12/13/2012/16/20

Keywords

  • Application development
  • Blockchain
  • Exchange listing
  • Initial coin offering
  • Token liquidity

ASJC Scopus subject areas

  • Computer Science Applications
  • Statistics, Probability and Uncertainty
  • Library and Information Sciences
  • Applied Mathematics

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