Thursday , November 21 2024
Home / Dirk Niepelt / Initial Coin Offerings and the Pecking Order

Initial Coin Offerings and the Pecking Order

Summary:
On Alphaville, Izabella Kaminska comments on the pecking order induced by initial coin offerings (ICOs). All of this raises an important point about actual shareholder rights within these structures. Say a legally-incorporated institution with actual shareholders dishes out an uncapped amount of tokens promising a share of revenues or dividends via the ICO process. Do shareholders’ rights to those revenue/dividends trump rights of the token holders? And if so, how does that square with the way risk is distributed through these systems? As Unseth notes, more often than not, it’s the token holders taking the bulk of the early concept risk, yet the inferiority of their ranking relative to shareholders kind of sees the latter receiving a free lunch.

Topics:
Dirk Niepelt considers the following as important: , , , , , , ,

This could be interesting, too:

Fintechnews Switzerland writes 21Shares and Crypto.com Forge Strategic Partnership

Fintechnews Switzerland writes Taurus Partners with Aktionariat to Launch Token Secondary Market for SMEs

Dirk Niepelt writes “Governments are bigger than ever. They are also more useless”

Fintechnews Switzerland writes LUKB bietet neu sichere Ein- und Auslieferung von Kryptowährungen an

On Alphaville, Izabella Kaminska comments on the pecking order induced by initial coin offerings (ICOs).

All of this raises an important point about actual shareholder rights within these structures. Say a legally-incorporated institution with actual shareholders dishes out an uncapped amount of tokens promising a share of revenues or dividends via the ICO process. Do shareholders’ rights to those revenue/dividends trump rights of the token holders? And if so, how does that square with the way risk is distributed through these systems? As Unseth notes, more often than not, it’s the token holders taking the bulk of the early concept risk, yet the inferiority of their ranking relative to shareholders kind of sees the latter receiving a free lunch.

Dirk Niepelt
Dirk Niepelt is Director of the Study Center Gerzensee and Professor at the University of Bern. A research fellow at the Centre for Economic Policy Research (CEPR, London), CESifo (Munich) research network member and member of the macroeconomic committee of the Verein für Socialpolitik, he served on the board of the Swiss Society of Economics and Statistics and was an invited professor at the University of Lausanne as well as a visiting professor at the Institute for International Economic Studies (IIES) at Stockholm University.

Leave a Reply

Your email address will not be published. Required fields are marked *