Whitepaper-Based Analysis of Success Factors for Token Offerings

Proceedings of The 4th International Conference on Applied Research in Business, Management and Economics

Year: 2022



Whitepaper-Based Analysis of Success Factors for Token Offerings

Christian Abel, Cam-Duc Au, Eric Frère und Alexander Zureck



Token offerings, such as initial coin offerings (ICOs) and security token offerings (STOs), are an increasingly popular method to raise funds. This applies especially to small and medium-sized enterprises as these financing options entail low access barriers and minimal friction costs. For this paper, an investigation into whitepaper-based success factors is conducted. Utilizing automated routines, quantitative analyses of 326 whitepapers, issued for ICOs, are conducted. These analyses are concerned with the usage of stylistic devices, such as alliterations, onomatopoeias and allusions. Also, direct addresses of the reader, references to the project’s staff and the sentiment of the whitepapers are analyzed. For all analyses, the dependent variable is the amount of funds raised for the respective project. The prevalence of the mentioned text features varies strongly across the analyzed data sets. The results show that none of the analyzed text features of the whitepapers have a significant impact on the amount of funds raised with the token offering. Other current research indicates that reducing information asymmetry is a property of whitepapers, that is valued by investors. The current findings are in line with this research, as the analyzed text features do not contribute to this objective. This research paper is of high relevance to the field of research of distributed ledger technology in the financial industry as text and sentiment analyses are not widely utilized thus far.

keywords: security token offering, blockchain, distributed-ledger-technology, financial innovation, digital assets.