The new tokenomics of crowdfunding
Carol Alexander, Michael Dakos
Abstract
Alexander and Dakos explore the evolution of crowdfunding through the lens of modern tokenomics. The authors analyze how token-based platforms differ from traditional equity-based crowdfunding portals, specifically examining the role of decentralization in democratizing access to capital. The paper evaluates the impact of smart contracts on transaction costs and trust, concluding that tokenized crowdfunding increases global participation but introduces new risks related to liquidity and project accountability. Using financial market data, the study contrasts the success rates of tokenized raises against traditional platforms. The research concludes that while tokens have expanded the reach of capital formation, they necessitate a new set of regulatory and due-diligence standards to protect participants from the unique hazards of decentralized, automated crowdfunding.
Key Findings
- 1Tokenized crowdfunding significantly lowers barriers to entry compared to traditional platforms.
- 2Automation via smart contracts creates efficiency but shifts the burden of trust to code.
- 3Global liquidity pools in tokenized crowdfunding enhance capital accessibility.
- 4Improved due-diligence and standardized disclosure are necessary to mitigate retail investor risks.
Topics
Citation
BibTeX
@misc{thenew2024,
title = {The new tokenomics of crowdfunding},
author = {Carol Alexander and Michael Dakos},
year = {2024},
howpublished = {\url{https://onlinelibrary.wiley.com/doi/10.1111/1467-8551.12772}},
}Knowledge Explorer
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