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The Tokenization of Assets: Using Blockchains for Equity Crowdfunding

Roth, Jakob and Schär, Fabian and Schöpfer, Aljoscha. (2019) The Tokenization of Assets: Using Blockchains for Equity Crowdfunding. New York.

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Official URL: https://edoc.unibas.ch/74074/

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Abstract

In this paper, we present tokenization of equity crowdfunding on a Blockchain as a possible approach to ease access to capital for startups. We propose a categorization of token standards into UTXO-based, layer-based and smart contract-based tokens. In a second step, we analyze the advantages that tokenization can bring, such as cryptographically secured ownership, programmability of assets, access to the Blockchain-ecosystem, enhanced divisibility of shares as well as the formation of a well-functioning secondary market. Tokenization allows to decouple the ledger of assets from the crowdfunding platform, thus lowering the cost of secondary market trading and the intermediary's power. We conclude by mentioning several drawbacks including information asymmetries between investors and campaign creators, regulatory issues and high energy intensity of Proof-of-Work-secured Blockchains.
Faculties and Departments:06 Faculty of Business and Economics > Departement Wirtschaftswissenschaften > Professuren Wirtschaftswissenschaften > Distributed Ledger Technology/Fintech (Schär)
UniBasel Contributors:Schär, Fabian and Roth, Jakob and Schöpfer, Aljoscha
Item Type:Working Paper
Publisher:SSRN
Number of Pages:33
Note:Publication type according to Uni Basel Research Database: Discussion paper / Internet publication
Identification Number:
Last Modified:23 Jul 2020 13:38
Deposited On:23 Jul 2020 13:38

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