# kaal:claim:3067615-028

**Claim.** On bankruptcy or termination of the platform, token holders typically have no liquidity preference and no recourse at all once debt holders and outside creditors are satisfied, so unlike a venture capital seed investor with at least a simple liquidity preference, they typically lose everything they invested.

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

**Holds when.**

- bankruptcy or termination of the promoter's business or platform

**Source quote.**

> Again, by contrast, token holders typically lose everything they invested as they have no liquidity preference at all.

**From.** Wulf A. Kaal, Marco Dell'Erba, *Initial Coin Offerings Emerging Practices, Risk Factors, and Red Flags* (2017), IV.4 No Liquidity Preference, page 19

**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.** No liquidity preference in insolvency  (family: investor-protection-gap)

**Topics.** defi, systemic-risk, innovation, risk-and-incentives

**Keywords.** liquidity-preference, bankruptcy, creditor-priority, venture-capital, downside-risk

**Related claims.**

- restated_by: https://wulfkaal.github.io/claims/3117224-012

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