Implications of the Token Economy: A Taxonomy and Research Agenda

Abstract

In the wake of blockchain technology, token offerings emerged as a new way of corporate finance, whereby companies sell digital tokens representing some kind of value to the public, typically in exchange for cryptocurrency or fiat money. Within a short couple of years, various types of tokens were developed that serve different purposes, and numerous potentials and shortcomings of the so-called token economy have surfaced. Its potential impact reaches far beyond the financial sector and entails profound implications on businesses and the economy as a whole. In this paper, a mixed-methods approach is used, which consists of a quantitative analysis of the properties of 254 tokens in combination with 15 qualitative expert interviews to present a thorough investigation of the constituents and consequences of the token economy. Furthermore, a definition of token economy is proposed; the business, economic, and legal implications are investigated; and the roles of the stakeholders in a token ecosystem are highlighted. Finally, a structured agenda for future research is presented.KeywordsTokenToken offeringsToken economySecurity token offeringQualitative researchExpert interviewsBlockchainDistributed ledger technology