{
 "@context": "https://schema.org",
 "@type": "DefinedTerm",
 "@id": "https://wulfkaal.github.io/entities/cost-of-capital",
 "identifier": "kaal:entity:cost-of-capital",
 "name": "Cost of capital",
 "termCode": "cost-of-capital",
 "inDefinedTermSet": {
  "@id": "https://wulfkaal.github.io/entities/index.json"
 },
 "author": {
  "@type": "Person",
  "name": "Wulf A. Kaal",
  "identifier": "https://orcid.org/0000-0003-0757-275X"
 },
 "dateModified": "2026-07-29",
 "canonicalForm": "https://wulfkaal.github.io/entities/cost-of-capital.md",
 "sha256": "b89a097864222e522770242e5ba683805f57cd5cd1c688e8c49f53086e23d380",
 "additionalProperty": [
  {
   "@type": "PropertyValue",
   "name": "status",
   "value": "derived"
  },
  {
   "@type": "PropertyValue",
   "name": "claim_count",
   "value": 3
  },
  {
   "@type": "PropertyValue",
   "name": "work_count",
   "value": 3
  },
  {
   "@type": "PropertyValue",
   "name": "year_span",
   "value": [
    "2019",
    "2020"
   ]
  },
  {
   "@type": "PropertyValue",
   "name": "non_current_claims",
   "value": 0
  }
 ],
 "subjectOf": [
  {
   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/3396522-011",
   "identifier": "kaal:claim:3396522-011",
   "text": "The minimum price of a fiat backed stable cryptocurrency is the interest rate of the fiat currency it is pegged to, because the collateral must sit liquid rather than earn a return.",
   "abstract": "Therefore, the price tag of fiat-backed tokens is, at a minimum, the interest rate of the pegged fiat currency.",
   "citation": "Craig Calcaterra, Wulf A. Kaal, Vadhindran K. Rao, Stable Cryptocurrencies (2019). SSRN: https://ssrn.com/abstract=3396522",
   "datePublished": "2019",
   "claim_type": "mechanism",
   "confidence": "argued",
   "is_failure_mode": false,
   "scope_conditions": [
    "applies to fully collateralized fiat backed tokens"
   ],
   "source_pdf_sha256": "ef5031b16aa53476ed618f0bdf92601cd4affb893692c701134bd9cba3ea8acf",
   "status": "current"
  },
  {
   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/3402701-003",
   "identifier": "kaal:claim:3402701-003",
   "text": "The minimum cost of a fiat-backed token equals the interest rate of the pegged fiat currency, because the backing capital must sit idle and liquid.",
   "abstract": "Therefore, the price tag of fiat-backed tokens is, at a minimum, the interest rate of the pegged fiat currency",
   "citation": "Craig Calcaterra, Wulf A. Kaal, Vadhindran K. Rao, Stable Cryptocurrencies - First Order Principles (2019). SSRN: https://ssrn.com/abstract=3402701",
   "datePublished": "2019",
   "claim_type": "mechanism",
   "confidence": "argued",
   "is_failure_mode": false,
   "scope_conditions": [],
   "source_pdf_sha256": "72ed2581b4cac2bd18a5b2640be959487a3cbc34c86ab5e5664924bcdb53c8e0",
   "status": "current"
  },
  {
   "@type": "Claim",
   "@id": "https://wulfkaal.github.io/claims/3606663-007",
   "identifier": "kaal:claim:3606663-007",
   "text": "Once the staggered private sale discounts of up to fifty percent are counted as a cost of capital, the cost structure of an ICO is arguably significantly higher than that of an IPO, notwithstanding the ICO's lower legal and offering expenses.",
   "abstract": "Considering these steep discounts to incentivize earliest possible investments, the cost structure of ICOs is arguably significantly higher than the cost structure of an IPO.",
   "citation": "Kaal, Digital Asset Market Evolution (2020). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3606663",
   "datePublished": "2020",
   "claim_type": "failure",
   "confidence": "argued",
   "is_failure_mode": true,
   "scope_conditions": [
    "ICOs conducted in 2017 and 2018 with staggered discount structures",
    "comparison against average IPO underwriting fees of four to seven percent"
   ],
   "source_pdf_sha256": "d1d4a15a293b715bb6a5a32e689f59c3a1587915039ba9a1cf4eeb8ee2a1e57c",
   "status": "current"
  }
 ],
 "description": "3 claims in the published works of Wulf A. Kaal carry the concept tag 'cost-of-capital'. Derived node: a roster, not an adjudicated definition."
}