# Ico `kaal:entity:ico` **Status.** derived This node is assembled mechanically from the 22 claims that carry the concept tag `ico`. It is a roster of what the corpus says under this term. It is **not** an adjudicated definition: no single statement here has been ruled canonical, and no first-appearance call has been made. Read the claims and judge for yourself. ## Every claim under this term 22 claims across 5 works, 2018 to 2022. **2018** - [3249860-008](https://wulfkaal.github.io/claims/3249860-008) [mechanism/asserted] -- An issuer's ICO strategy can pre-define the token economy's monetary policy by predetermining the fixed number of tokens created and issued in the ICO. > An issuers' ICO strategy can pre-define monetary policy by predetermining the fixed number of tokens created and issued in the ICO. Wulf A. Kaal, Crypto Economics - The Top 100 Token Models Compared (2018). SSRN: https://ssrn.com/abstract=3249860 - [3249860-016](https://wulfkaal.github.io/claims/3249860-016) [empirical/evidenced] -- For token issuers in the dataset that did not conduct an ICO, the author used the date of first publicly listed trade as a proxy variable for launch date. > For token issuers in the dataset that did not engage in an ICO, the author used the date of first publicly listed trade as a proxy variable. Wulf A. Kaal, Crypto Economics - The Top 100 Token Models Compared (2018). SSRN: https://ssrn.com/abstract=3249860 - [3249860-021](https://wulfkaal.github.io/claims/3249860-021) [empirical/evidenced] -- Of the top 100 tokens, fifty-six held an ICO and thirty-eight did not. > Of the top 100 tokens, fifty-six tokens held an ICO and thirty-eight tokens did not. Wulf A. Kaal, Crypto Economics - The Top 100 Token Models Compared (2018). SSRN: https://ssrn.com/abstract=3249860 **2019** - [3409548-014](https://wulfkaal.github.io/claims/3409548-014) [failure/argued] *(failure mode)* -- The 2018 ICO boom exposed a core limitation of blockchain technology: ICOs sold investors decentralized infrastructure products on the assumption that a baseline infrastructure already existed, and that assumption proved false. > The limitations of blockchain technology became most apparent in the aftermath of the ICO boom of 2018. ICOs promised investors core decentralized infrastructure products that assumed a baseline infrastructure existed. This turned out to be false Kaal, Financial Technology and Hedge Funds (2019). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3409548 - [3409548-031](https://wulfkaal.github.io/claims/3409548-031) [empirical/argued] *(failure mode)* -- The shift of the digital asset market back from the ICO model to the venture model since late 2017 has reduced, not increased, diversification for investors. > Since late 2017, the market for digital assets has moved back from the ICO model to the venture model, leading to less diversification. Kaal, Financial Technology and Hedge Funds (2019). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3409548 - [3409548-032](https://wulfkaal.github.io/claims/3409548-032) [empirical/evidenced] -- ICO funding collapsed as a share of blockchain startup fundraising, falling from 80% to around 35% by August 2018, recovering only marginally to 40% to 50% between September 2018 and February 2019, and dropping to 20% in March 2019. > The percentage of ICOs in relation to total fundraising of blockchain startups dropped from 80% to around 35% in August 2018 and only marginally recovered between September 2018 and February 2019 at around 40% to 50% before dropping to 20% in March 2019. Kaal, Financial Technology and Hedge Funds (2019). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3409548 - [3409548-033](https://wulfkaal.github.io/claims/3409548-033) [mechanism/argued] -- The legacy private investment fund model delays liquidity: the investment process is long, complex and time intensive and leads up to a very late liquidity event in the form of an IPO or acquisition, which is why funds seek the early liquidity cryptocurrencies provide. > In the existing legacy business for private investment funds, the investment process is subject to long, complex, and time intensive processes leading up to a very late liquidity event in the form of an IPO or acquisition. Kaal, Financial Technology and Hedge Funds (2019). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3409548 **2020** - [3606663-001](https://wulfkaal.github.io/claims/3606663-001) [mechanism/argued] -- Equity funding and token funding are substitutes: because equity investment in a blockchain startup makes issuing a digital currency both less likely and less necessary as a funding source, a market shift back toward equity funding should shrink the total volume of digital currencies issued. > Because equity investments in blockchain startups make it less likely and less necessary for the respective startups to issue digital currencies, at least as a funding source, the market for digital currencies and the total volume of issued digital currencies is likely to recede Kaal, Digital Asset Market Evolution (2020). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3606663 - [3606663-002](https://wulfkaal.github.io/claims/3606663-002) [empirical/evidenced] -- The funding sources for digital asset and blockchain startups cycled through four stages since 2016 and 2017: equity funding, then initial coin offerings, then equity offerings, then initial exchange offerings, and back to equity funding by the early 2020s. > Since 2016/17, the funding sources for digital asset startups and blockchain startups moved from equity funding to initial coin offerings (ICOs), to equity offerings, and initial exchange offerings (IEOs), just to return back to equity funding in the early 2020s. Kaal, Digital Asset Market Evolution (2020). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3606663 - [3606663-005](https://wulfkaal.github.io/claims/3606663-005) [failure/argued] *(failure mode)* -- The assumption by ICO issuers that token sales let them circumvent securities registration and disclosure requirements proved to be a fallacy for many U.S. issuers, who faced increased SEC enforcement actions in late 2019. > Of course, for many U.S. issuers of tokens in ICOs this presumption became in retrospective a fallacy that should haunt them in the aftermath of increased SEC enforcement actions of ICOs in late 2019. Kaal, Digital Asset Market Evolution (2020). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3606663 - [3606663-006](https://wulfkaal.github.io/claims/3606663-006) [failure/argued] *(failure mode)* -- By 2019 the ICO market had lost its defining advantage over venture capital: because most ICOs between 2018 and 2019 imposed one to three year lockups, neither market offered early liquidity to investors or issuers, making the two substantively similar. > Most ICOs during that period required one to three-year lockup period for their investors. Accordingly, the ICO market in 2019 is very similar to the venture market in the sense that neither of these markets offers early liquidity to investors and issuers. Kaal, Digital Asset Market Evolution (2020). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3606663 - [3606663-007](https://wulfkaal.github.io/claims/3606663-007) [failure/argued] *(failure mode)* -- 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. > 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. Kaal, Digital Asset Market Evolution (2020). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3606663 - [3606663-008](https://wulfkaal.github.io/claims/3606663-008) [empirical/evidenced] -- ICO issuance exceeded venture capital financing of startups for the first time in the second quarter of 2017, with $210 million invested through ICOs against $180 million invested through traditional venture capital funds. > In the second quarter of 2017, ICO issuances exceeded venture capital financing of start-ups for the first time,56 with $210 million invested in ICOs versus $180 million invested into start-ups via traditional venture capital funds. Kaal, Digital Asset Market Evolution (2020). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3606663 - [3606663-009](https://wulfkaal.github.io/claims/3606663-009) [mechanism/argued] -- Initial exchange offerings emerged as a market response to the near disappearance of the ICO market in January 2019, driven by the cryptocurrency exchanges that were most affected by the collapse. > Initial exchange offers ("IEO") 66 evolved as a response to the near disappearance of the ICO market in January 2019. Kaal, Digital Asset Market Evolution (2020). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3606663 - [3606663-011](https://wulfkaal.github.io/claims/3606663-011) [failure/argued] *(failure mode)* -- Capped ICO raises, adopted by the crypto community to reduce investor uncertainty about platform valuation in uncapped raises, backfire because the cap creates strong incentives for investors to get in first, raising the likelihood of retail investor frenzy. > However, capped ICO raises create significant incentives for investors to attempt to get in first, raising the likelihood of retail investor frenzy. Kaal, Digital Asset Market Evolution (2020). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3606663 - [3606663-012](https://wulfkaal.github.io/claims/3606663-012) [failure/argued] *(failure mode)* -- The absence of mandatory disclosure obligations for ICOs leads promoters to make irregular disclosures or none at all as time passes, producing a significant lack of transparency in the ICO market. > Moreover, the lack of mandatory disclosures for ICOs leads many promoters to make irregular or no disclosures about the platform as time passes, leading to a significant lack of transparency in the ICO market. Kaal, Digital Asset Market Evolution (2020). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3606663 - [3606663-013](https://wulfkaal.github.io/claims/3606663-013) [failure/asserted] *(failure mode)* -- ICO sale terms are not fixed at launch: promoters can alter the smart contract to change the sales rules mid course during an offering, a risk factor for retail investors that has no analogue in a registered offering. > Promoters can also alter the smart contract to change ICO sales rules mid-course during an ICO. Kaal, Digital Asset Market Evolution (2020). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3606663 **2021** - [3962614-016](https://wulfkaal.github.io/claims/3962614-016) [mechanism/evidenced] -- Alternative early round funding methods matter because they get entrepreneurs over the VC investment threshold or help them bypass the VC model completely. > These alternative funding methods are important to get entrepreneurs over the VC investment threshold, or to help entrepreneurs completely bypass of the VC model. Wulf A. Kaal, REPUTATION AS CAPITAL – How Decentralized Autonomous Organizations Address Shortcomings in the Ventu (2021). SSRN: https://ssrn.com/abstract=3962614 - [3962614-017](https://wulfkaal.github.io/claims/3962614-017) [empirical/evidenced] -- At its peak in the 2019 cycle the volume of initial coin offerings surpassed venture capital firms and business angels as a fundraising method for startups. > At its peak in the 2019 cycle, the volume of ICOs has surpassed VCs and BAs as a fundraising method for startups. Wulf A. Kaal, REPUTATION AS CAPITAL – How Decentralized Autonomous Organizations Address Shortcomings in the Ventu (2021). SSRN: https://ssrn.com/abstract=3962614 **2022** - [4015908-001](https://wulfkaal.github.io/claims/4015908-001) [failure/asserted] *(failure mode)* -- Even after the ICO boom of 2017 and 2018, many digital asset projects and token launches are designed with the primary focus on benefiting the founding group, which often finds creative ways to cash out of the project after a successful run. > many digital asset projects and token launches are designed with the primary focus on benefiting the founding group, which often finds creative ways to cash out of the project after a successful run. Wulf A. Kaal, Fair Token Launch (2022). SSRN: https://ssrn.com/abstract=4015908 - [4015908-003](https://wulfkaal.github.io/claims/4015908-003) [failure/asserted] *(failure mode)* -- The foundation model for token issuance is a core form of centralized top-down governance, and most ICO projects were governed by a small group of individuals rather than by the community at large or a DAO. > The foundation model for token issuance is a core form of centralized top-down governance in the context of token offerings. Wulf A. Kaal, Fair Token Launch (2022). SSRN: https://ssrn.com/abstract=4015908 - [4015908-004](https://wulfkaal.github.io/claims/4015908-004) [failure/argued] *(failure mode)* -- ICOs that allowed their token to trade before the underlying product existed, at least in beta, created significant risk for investors because the product might never go live and the token could lose its value entirely. > ICOs that allowed their token to trade before the underlying product was built, at least in a beta version, create significant risk factors for the investors as the product may not go live at all and the token may lose its value entirely. Wulf A. Kaal, Fair Token Launch (2022). SSRN: https://ssrn.com/abstract=4015908 ## Verify Every claim above resolves to a record carrying a verbatim source quote, the sha256 of the source PDF, and a preformatted citation. Nothing here asks to be taken on trust. curl -s https://wulfkaal.github.io/entities/ico.md | sha256sum **Canonical form.** This markdown file is the canonical hashed representation of this entity node. Its sha256 is the content hash.