Data: coinschedule
for comparison: total size of
Toronto Stock Exchange: $2,200B
Toronto Venture Exchange: $41B
Source: Tokendata
native to a blockchain for payment
examples: Bitcoin, Bitcoin Cash, Ether, Lumens, Cardano
Source: Satis Group LLC
Source: Morgan Stanley (Nov 2018) “Update: Bitcoin, Cryptocurrencies and Blockchain”
Source: Tokendata
price
demand
marginal cost
marginal revenue
general idea: sell future output
two approaches for token sales
price
demand
marginal cost
marginal revenue
\(\Rightarrow\) shifts marginal revenue for entrepreneuer left because get only fraction of revenue
Result: underproduction
NB: Chod and Lyandres (2018) have the same result
price
demand
marginal cost
marginal revenue
Entrepreneur does not internalize that extra output unit affects revenue for tokenholders!
Result: overproduction
\(c\)
\(MR\)
general idea: sell future output
two approaches for token sales
Common result in the literature: only debt guarantees effort
Idea: entrepreneur can influence expected demand with "effort"
effort is costly
Is it worth it for the entrepreneur?
Optimal contract looks like debt:
Feb 2000
Aug 2014
blockchain only useful with applications
applications require (tech + economics) + business
understanding of economics on blockchain requires development
our paper: \(\exists\) real economic value in tokens, when used properly
@financeUTM
andreas.park@rotman.utoronto.ca
slides.com/ap248
sites.google.com/site/parkandreas/
youtube.com/user/andreaspark2812/