# kaal:claim:3067615-023

**Claim.** Because the token supply is controlled by ICO promoters who must reserve tokens for future funding needs, token holders can be diluted by later issuance of reserve tokens and their token value can be diminished without any ability to protect themselves against such events.

**Type.** failure  **Support.** argued

**Holds when.**

- platforms that reserve tokens for future funding needs

**Source quote.**

> Because the token supply is controlled by the ICO promoters, the token holders may be diluted in the future if the platform decides to issue more reserve tokens to additional investors.

**From.** Wulf A. Kaal, Marco Dell'Erba, *Initial Coin Offerings Emerging Practices, Risk Factors, and Red Flags* (2017), IV.1 Intangible or No Product, page 16

**Cite as.** Wulf A. Kaal, Marco Dell'Erba, Initial Coin Offerings Emerging Practices, Risk Factors, and Red Flags (2017). SSRN: https://ssrn.com/abstract=3067615

**Verify.** sha256 of source PDF `164ce15b9eb1e8847ebcb073f5b23a96b4974ad0308d77469a9455d4a1ebeb38` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20and%20Dell%27Erba%20-%202017%20-%20Initial%20Coin%20Offerings%20Emerging%20Practices%2C%20Risk%20Factors%2C%20and%20Red%20Flags.pdf

**Failure mode.** Reserve token dilution  (family: investor-protection-gap)

**Topics.** tokenomics

**Keywords.** dilution, reserve-tokens, token-supply, investor-protection

**Related claims.**

- restated_by: https://wulfkaal.github.io/claims/3117224-010

**Canonical form.** This markdown file is the canonical hashed representation of the claim. Its sha256 is the content hash used for attestation.