Abstract
In the wake of blockchain technology, token offerings emerged as a new way of corporate finance, whereby companies sell digital tokens representing some kind of value to the public, typically in exchange for cryptocurrency or fiat money. Within a short couple of years, various types of tokens were developed that serve different purposes, and numerous potentials and shortcomings of the so-called token economy have surfaced. Its potential impact reaches far beyond the financial sector and entails profound implications on businesses and the economy as a whole. In this paper, a mixed-methods approach is used, which consists of a quantitative analysis of the properties of 254 tokens in combination with 15 qualitative expert interviews to present a thorough investigation of the constituents and consequences of the token economy. Furthermore, a definition of token economy is proposed; the business, economic, and legal implications are investigated; and the roles of the stakeholders in a token ecosystem are highlighted. Finally, a structured agenda for future research is presented.
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Notes
- 1.
In the remainder of the paper, we use the term blockchain to denote all kinds of distributed ledger technologies independent of their underlying data structure.
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Appendix
Appendix
Business Aspects
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Which type of security token will be most relevant for start-ups/corporates in the future?
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From a business point of view, what are current challenges security tokens need to overcome in order to succeed?
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How will security tokens change the future of financing for start-ups and corporates (SMEs)?
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What type of infrastructure (e.g., exchanges, custody, rating agencies) is needed for security tokens, and what is currently missing?
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Is there a higher potential for debt (e.g., bonds) or equity financing (e.g., profit participation rights)?
When should equity tokens be used? When should debt tokens be used? When should other tokens be used?
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Will there be different tokens for different stages of financing?
If yes, how could they look like?
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How important are liquid assets to buyers and sellers?
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How much does an STO cost? What are the main cost drivers?
Technical Aspects
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From a technical point of view, what are barriers that could hinder the adoption of security tokens?
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Do you see a broad application of tokens standards such as ERC-1400?
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Is there a need for different tokens standards, depending on the characteristics of the financing instrument? If so, which standards?
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What are the best blockchain systems for token creation?
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Are there STO platforms that you think will be important in the future?
Regulatory Aspects
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From a legal point of view, what is needed for security tokens to become a prime financing vehicle for start-ups?
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As a company issuing a security token, what needs to be reported?
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How do the current law/regulations need to change in order to accelerate adoption?
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What are current best practices?
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Lesche, P., Sandner, P., Treiblmaier, H. (2022). Implications of the Token Economy: A Taxonomy and Research Agenda. In: Lacity, M.C., Treiblmaier, H. (eds) Blockchains and the Token Economy. Technology, Work and Globalization. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-95108-5_1
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