# kaal:claim:3949098-025

**Claim.** If the public fails to purchase the capped amount of a token opportunity, the DAOIC must sacrifice its own liquidity and buy the remaining part of the sale, so firm commitment underwriting turns a collective misjudgment of public demand into a capital obligation.

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

**Holds when.**

- firm commitment underwriting
- public demand falls short of the capped amount

**Source quote.**

> Should the public fail to purchase the capped amount of the token opportunity, the DAOIC will have to sacrifice its own liquidity and commit to buy the remaining part of the token opportunity sale.

**From.** Wulf A. Kaal, *Reputation as Capital – How DAOs Upgrade Finance* (2021), II. Basic Concept, 4. Decentralized Underwriting, page 14

**Cite as.** Wulf A. Kaal, Reputation as Capital – How DAOs Upgrade Finance (2021). SSRN: https://ssrn.com/abstract=3949098

**Verify.** sha256 of source PDF `04297905564a6092b2db7640561f58fd374d3114c79527357bad09d11b909819` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20-%202021%20-%20Reputation%20as%20Capital%20%E2%80%93%20How%20DAOs%20Upgrade%20Finance.pdf

**Failure mode.** Unsold Public Tranche Liquidity Absorption  (family: liquidity-and-market-structure-failure)

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

**Keywords.** firm-commitment-underwriting, liquidity-risk, collective-wisdom, daoic

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