Kickstarting blockchain: designing blockchain-based tokens for equity crowdfunding
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Blockchain-based tokens seek to overcome the friction and opaqueness of the legacy financial infrastructure in the company funding process, particularly in the early-stage and equity crowdfunding domain. While Initial Coin Offerings and Security Token Offerings proposed a solution for crowdfunding, early-stage companies still face challenges in using blockchain as an alternative equity funding infrastructure. In this context, the idea of blockchain-based equity tokens remains hypothetical. In addition, the literature lacks design theory for the development and implementation of blockchain-based equity tokens. This research bridges this gap by designing, developing, and evaluating an equity token prototype for crowdfunding, following the design science research approach. We propose a refined crowdfunding model and derive seven design principles that contribute to the design theory of equity tokens. The research results show that blockchain-based equity tokens improve efficiency, transparency, and interoperability while meeting regulatory requirements and facilitating secondary market trading.
Original language | English |
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Journal | Electronic Commerce Research |
Volume | 24 |
Pages (from-to) | 239–273 |
ISSN | 1389-5753 |
DOIs | |
Publication status | Published - 2024 |
Bibliographical note
Publisher Copyright:
© 2023, The Author(s).
- Blockchain, Design science, Equity crowdfunding, Initial coin offering, Security token offering, Tokens
Research areas
ID: 335957822