Much of the theoretical literature on ICOs highlights the coordination benefits inherent to utility tokens; see, for example, Li and Mann , Sockin and Xiong , and Catalini and Gans . Further theories on ICOs include Chod and Lyandres , Chod, Trichakis and Yang , Goldstein, Gupta and Sverchkov , Holden and Malani , Lee and Parlour , Lyandres , Malinova and Park , and Mayer . In contrast to these papers, our model is not limited to utility tokens but encompasses a richer class of tokens.

Since the underprovision of security features reduces platform adoption and value, moral hazard intensifies financing constraints. Symmetrically, larger financing needs imply that developers retain fewer tokens, thereby exacerbating the moral hazard problem. Financing needs and moral hazard thus reinforce each other, leading to low levels of token security features and token retention. We also show that moral hazard is more severe when network effects are low or the platform development phase is long, which induces low levels of security features and token retention.

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The Q2 decrease was driven by crossmarket selloff across the fund’s liquid portfolio, somewhat offset by the large increase in the value of OpenSea. Also to note is the recent underperformance of Coinbase the largest holding of the fund, the value was $328.28 per share in its Nasdaq debut on April 14th, 2021, but the share price is currently $233.72 as of this writing. The token page shows information such as price, total supply, holders, transfers and social links. Digitalcoinprice.com needs to review the security of your connection before proceeding. Please also note that data relating to the above-mentioned cryptocurrency presented here are based on third party sources. They are presented to you on an “as is” basis and for informational purposes only, without representation or warranty of any kind.

We are multi-stage investors and invest in both equity and crypto assets. This week, OSL Digital Securities, the only SFC-licensed digital asset exchange and brokerage in Hong Kong conducted its first successful trades in BCAP Tokens, a security token. This is the first security token to be traded via a regulated digital asset trading platform operator in Hong Kong, following the first licence to be issued by the Securities and Futures Commission to a virtual asset trading platform.

Initial coin offerings and the value of crypto tokens

BCAP Tokens are Ethereum-based smart contract digital tokens originally issued in 2017 by Blockchain Capital TokenHub Ptd. Blockchain Capital was founded in 2013, is one of the oldest and most active venture investors in the blockchain industry and has financed 75+ companies and projects since its inception. Blockchain Capital, founded in 2013, is one of the oldest and most active venture investors in the blockchain industry and has financed 75+ companies and projects since its inception. Their mission is to help entrepreneurs build world-class companies and projects based on blockchain technology. They invest in both equity and tokens and are a multi-stage investor. Blockchain Capital also pioneered the world’s first ever tokenized investment fund and the blockchain industry’s very first security token, the BCAP, in April of 2017.

Seminal contributions include Townsend , Gale and Hellwig , and Bolton and Scharfstein , or, in dynamic settings, DeMarzo and Sannikov and DeMarzo and Fishman . Our focus is on the design of tokens and the comparison of tokens with equity financing. A distinguishing feature of our framework is that platform financing (i.e., the design of tokens) affects endogenous platform adoption, cash flows, and firm value, even if there are no frictions. By contrast, in standard models of security design, such a link between firm value and financing requires frictions .

• Section 5 derives conditions under which equity financing with fiat money as transaction medium is optimal.
• Coinbase started trading on the Nasdaq Private Markets and reached a market cap of over $100B, increasing the value of the position by 9.5x.
• Many firms issuing tokens develop a decentralized platform that promises network effects.

Track the ETH gas price automatically, and get notified when it’s a smart time to send a transaction. Choose from many ways to receive alerts, such as our Telegram, Discord or Slack bots. The Q1 increase was driven by multiple major moves across the fund’s portfolio, both from equity and token holdings. This risk is higher with Cryptocurrencies due to markets being decentralized and non-regulated.

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Specifically, we develop a model in which a start-up firm, owned by penniless developers, builds a platform that facilitates peer-to-peer transactions among users. As in Cong, Li, Wang, 2020, Cong, Li, Wang, 2021, the platform features network effects that imply complementarities in users’ endogenous adoption and transaction decisions. We develop a model in which a start-up firm issues tokens to finance a digital platform, which creates agency conflicts between platform developers and outsiders. We show that token financing is preferred to equity financing unless the platform expects strong cash flows, has large financing needs, or faces severe agency conflicts. Tokens are characterized by their utility features, facilitating transactions, and security features, granting cash flow rights. In the model, developers’ revenues stem from selling tokens to platform users and from the ownership of the start-up equity, which is a claim on the cash flows that the platform generates.

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More recently, important progress has been made on platform finance with tokens. Notably, Cong, Li and Wang analyze the pricing implications of users’ intertemporal adoption decisions. Cong, Li and Wang connect tokenomics to corporate finance, with a focus on optimal token-supply policy to finance investment in platform quality. While we employ similar modeling of users’ platform adoption decisions, our paper differs from Cong, Li, Wang, 2020, Cong, Li, Wang, 2021 in several important dimensions. First, Cong, Li, Wang, 2020, Cong, Li, Wang, 2021 do not consider tokens with dividend rights and security features. Second, while Cong, Li and Wang features conflicts of interest between users and developers, they abstract from moral hazard and platform financing needs, which are the key frictions we model in this paper.

In a pooling equilibrium in which all platforms are financed with the same tokens, adverse selection decreases the provision of token security features. Initial coin offerings have become an important source of financing for firms that develop digital platforms (Howell et al., 2020). By the end of 2018, over 5500 firms had attempted to raise funds using an ICO, raising over 30 billion dollars (Lyandres et al., 2020) and with at least 20 ICOs taking in more than 100 million dollars (Howell et al., 2020). In an ICO, a firm raises funds by issuing cryptographically secured tokens. Because these tokens serve as the means of payment on a platform or offer access to the firm’s services, they possess utility features and are therefore often called utility tokens.

Our curve is globally smooth while still capturing important local variation. Economically, we show that applying our data leads to different conclusions from using the leading alternative data of Gürkaynak et al. when we repeat two popular studies of Cochrane and Piazzesi and Giglio and Kelly . Statistically, we show our dataset preserves information in the raw data and has much smaller pricing errors than GSW. Our new yield curve is maintained and updated online, complemented by bandwidths that summarize information content in the raw data.

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The company offers OTC, iRFQ and electronic trading services giving traders access to the world’s deepest liquidity pools, as well as secure and insured wallets to ensure the safekeeping of digital assets with timely transaction settlement. You can buy, sell or trade Blockchain Capital on more than 10 exchange listed above. The total trade volume of Blockchain Capital in last 24 hour is around 0 USD. You can select some of above exchanges to buy Blockchain Capital with USD, INR, CAD, EUR, GBP, RUB, etc.

A theory of ICOs: diversification, agency, and information asymmetry

The selection of underlying exchanges is subject to change at OSL’s sole discretion. Currently, we don’t have information about the price of crypto currency BCAP . So far, we don’t know how the price of BCAP has changed in the past 7 days.

• This week, OSL Digital Securities, the only SFC-licensed digital asset exchange and brokerage in Hong Kong conducted its first successful trades in BCAP Tokens, a security token.
• Finally, we study various extensions of the model, in particular the relation between optimal platform financing and adverse selection.
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• The total dollar value of all transactions for this asset over the past 24 hours.
• Our focus is on the design of tokens and the comparison of tokens with equity financing.

We don’t have any information about the change in BCAP price for the last 24 hours. Our work is related to the literature on blockchain economics, tokenomics, and cryptocurrencies. A review of this rapidly evolving research area is provided by Chen, Cong and Xiao . Link your account with our Telegram bot to receive customizable crypto alerts.

BCAP Price

First, considering the financing problem of a platform that uses tokens as a transaction medium, we demonstrate that issuing tokens to finance the start-up generally maximizes both developers’ payoff and the value of the platform. We also show that while token security features trigger endogenous network effects and spur platform adoption, their provision is affected by moral hazard and financing needs. Specifically, granting cash flow rights to token holders improves the return to holding tokens and therefore boosts the platform transaction volume. This, in turn, raises the platform’s cash flows, which implies even more transactions and dividends.

• The BCAP NAV finished down 31.3% for the second quarter of 2021.
• The reason is that security features generate endogenous network effects that increase the sensitivity of platform adoption to productivity shocks.
• The effects of security features on the token price volatility are larger when the token possesses more utility features or when network effects are stronger.
• Unlike most crypto bots, you create and manage alerts from our web interface.
• We show that token financing is preferred to equity financing unless the platform expects strong cash flows, has large financing needs, or faces severe agency conflicts.

An ICO is also preferable to an STO if financing needs, agency frictions, or the platform development phase are large. Moreover, our model implies that start-ups with innovative business models, which are particularly prone to moral hazard, optimally raise best laptops for ethereum mining funds via ICOs, consistent with Fahlenbrach and Frattaroli or Howell, Niessner and Yermack. Our paper also advances the literature on the economics of platforms. Early contributions in this literature, such as Rochet and Tirole , do not consider tokens.

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However, token security features dilute developers’ equity ownership in the start-up firm. Because the incentives generated by each dollar of equity ownership are stronger than the incentives from a dollar of token ownership, token security features undermine incentives. As a result, the optimal level of cash flow rights granted to token holders decreases in the extent of moral hazard.