# kaal:claim:3067615-027

**Claim.** Legacy businesses own their code and can sue competitors who copy it, whereas open source crypto start-ups rely only on licenses, and this weaker incentive structure makes ICO investments riskier.

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

**Holds when.**

- open source crypto start-ups compared to legacy code-owning businesses

**Source quote.**

> While open-source crypto start-ups have licenses that help protect them from competitor companies who may be using their code for profit, legacy businesses that own their code and can sue competitors who copy such code which provides a different incentive structure and makes ICO investments riskier.

**From.** Wulf A. Kaal, Marco Dell'Erba, *Initial Coin Offerings Emerging Practices, Risk Factors, and Red Flags* (2017), IV.3 Open Source, page 18

**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.** Weak legal protection for open source code  (family: investor-protection-gap)

**Topics.** open-source-and-code, risk-and-incentives

**Keywords.** intellectual-property, open-source, licensing, incentive-structure

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