As expected, once blockchain technology was introduced, several uses followed. In particular, with the increasing development of the market for blockchain-based businesses, a new form of capital raising more suitable for these projects was needed (Fisch, 2018; Momtaz, 2018; Rhue, 2018). Indeed, the Initial Coin Offering emerged as a new source of financing and immediately increased and revolutionized competition in the market (Bourveau, 2018). However, as Zetzsche (2018) and Martinez (2018) point out, it is no longer aimed solely at the blockchain community, as investor groups and goals are rapidly expanding and the phenomenon has already become global and relevant. Say no to plagiarism. Get a tailor-made essay on “Why Violent Video Games Should Not Be Banned”?Get the original essayFirst of all, having highlighted how the authors describe the phenomenon, it is important now to consider the fundamental aspects of this innovative method of fundraising. Therefore, the Initial Coin Offering, which can also be called "token sale" or "crowdsale", can be seen as a hybrid fundraising instrument between the more traditional IPO and the more modern crowdfunding. Indeed, through an ICO, a start-up can issue a stock of specific cryptographic tokens for sale and these tokens can be used as a means of exchange to access the digital platform created by the start-up itself (Catalini, 2018). By purchasing the issued tokens, in exchange for cryptocurrencies or fiat currencies (more rarely), investors provide the capital that is usually committed to the early development of the company or project (Catalini, 2018). Technically, an ICO is based on a smart contract developed within a blockchain platform and contains the address under which the exchange of cryptocurrencies and tokens between investors and companies takes place (Rhue, 2018). In particular, most ICOs use the Ethereum platform whose main attribute is precisely the smart contract and the possibility of easily programming the guidelines on which the ICO system is built and launched (Martinez, 2018). Indeed, Ethereum, with its ERC-20 protocol, offers a standardized infrastructure for generating new tokens on its blockchain platform (Martinez, 2018). Beyond the technical aspects, in order to further study the benefits and risks of Initial Coin Offerings, it is equally important to understand the procedure and basic structure of this fundraising method. First, to attract investors and give them information about the project, the creators should circulate the White Paper on their website (Collomb, 2018). It is a document that basically produces the typical business plan and should contain the project objective, management team, idea, product, roadmap and all necessary data of the process ICO that an investor might need to make an informed decision (Benedetti, 2018). ; Bourveau, 2018). Despite the importance of the White Paper, according to Martinez (2018), its structure is not yet regulated and there is no standard model to follow. As a result, in general, the prospectus of ICOs contains almost only a technical explanation of the technology underlying the project (mainly blockchain projects) and the benefits it can bring to users. In the next chapter, looking at all the potential risks that an ICO embodies, I will reiterate this point because the lack of information disclosure and guidelinesfor the white paper is the main reason that generates information asymmetry (Martinez, 2018). However, at this stage, during which the ICO announcement is communicated via conferences, meetings, online and on social networks, the tokens developed by the issuers should not yet be usable and functional (Collomb, 2018). Indeed, as Rhue (2018) makes clear, before launching the ICO, the company requesting capital must also define the total supply of specific tokens, the decimal value of the token, the initial value of a single token and, furthermore, the cryptocurrencies accepted in exchange. In particular, Conley (2017) also highlights the relevance of creating a fixed number of tokens and clearly announcing it before selling them. Furthermore, once the declared maximum number is reached, the company should no longer issue these specific tokens, otherwise problems with pricing, opportunistic behavior and speculation are likely to arise (Conley, 2017). Subsequently, it is common to have a pre-ICO, or pre-sale of tokens as it is allowed for investors to purchase the tokens before the official public sale begins (Martinez, 2018). Presale, usually defined with smart contracts different from crowdsale, offers discounts and, therefore, investors can buy tokens at cheaper prices and, sometimes, get an additional bonus (Martinez, 2018). It is therefore clear that first-time buyers benefit from several advantages. However, Martinez (2018) specifies that, in the majority of cases, start-ups offer the opportunity for a pre-ICO, particularly to “accredited” investors, who constitute a larger share of the funds raised during this stage. the official sale of tokens to the public takes place according to the guidelines published in the corresponding White Paper. At this stage, the exchange of tokens and cryptocurrencies between issuers and buyers takes place via the code or address provided. As explained previously, the accepted cryptocurrencies are specified in the initial document; otherwise, the most commonly negotiated ones are generally recognized (Martinez, 2018). There is no general principle that concerns and manages the duration of the ICO, since it can be fixed or neither; it can last a few seconds, weeks or months (Collomb, 2018). According to Martinez (2018), the duration of the call for ICOs can vary depending on the nature and objectives of the project: in fact, the more the network is necessary, the longer the ICO will last. Alternatively, as Collomb (2018) points out, token issuers often determine the closure of an ICO crowdsale when the “cap,” or predefined maximum amount, is reached. Likewise, a minimum threshold is set and if it is not reached, the project and the ICO risk being canceled (Collomb, 2018). However, Bourveau (2018) clarifies that there can be capped and uncapped ICOs. Furthermore, it is fundamental to specify that one of the major characteristics of the ICO is to offer token holders the possibility of creating a secondary market by exchanging the tokens. purchased and, therefore, generate cash from their investment. Indeed, Momtaz (2018) argues that, since the main source of liquidity for investors is to exchange the tokens acquired via the ICO, the objective is to insert it on the list of a token exchange after the closing of the ICO crowdsale. Exchanges take place on the cryptocurrency market, which is still based on a blockchain system and ensures verification, authentication, security, anonymity and data integrity (Bourveau, 2018). For example, some of the major public exchanges where tokens are listed and traded are Binance, Bitfinex, Bittrex, Kraken, and Poloniex(Bourveau, 2018; Momtaz, 2018). However, if there is no exchange accepting a specific token and its relative project, the ICO is doomed to failure, and already at the beginning of 2018 it was reported that almost half of 2017 ICOs failed (Momtaz, 2018). ).The Undefined Framework of Token PropertiesAs previously anticipated, there is no complete and exhaustive definition of ICO, mainly due to the fact that issued tokens may have different properties and rights embedded in them. Indeed, even in the literature this is confusing because the term "token" is often used for the more general term "coin". In this section, after an in-depth study of several articles, I will provide an overview of the attributes a token can assume. However, it is fundamental to keep in mind that at the technical level, all tokens have the same principles and bases of the blockchain system and cryptography (Shroff, 2018). To distinguish the types of coins, it is appropriate first to mention “cryptocurrency coins” or “currency tokens” which generally designate a digital medium for the exchange of value and function like a currency (Allen, 2018; Bourveau, 2018; Then there are “coin infrastructures”, as defined by Bourveau (2018), which support the creation of a new platform with the development of smart contracts. Third, some ICO tokens are often denominated differently and not all authors include all properties. Indeed, Bourveau (2018) describes them as “utility coins” because, generally, they offer token holders the benefit of receiving products or services previously revealed in the White Paper. For example, these digital tokens can provide access to the platform, the system, or even benefit from other advantages made accessible by the project and the decentralized service in question (Adhami, 2017; Pilkington, 2018, Shroff, 2018). Similarly, utility tokens could imply future rights that holders have obtained during the ICO (Allen, 2018). However, the specific rights conveyed by a token may differ and may encompass several subcategories: the “use token” which provides use rights such as a license to use software; the “community token” which gives membership to a community; “participation tokens” which allow you to be part of governance and often voting rights (Zetzsche, 2018; Collomb, 2018). Indeed, tokens might resemble characteristics of securities, assets or equity, inferring ownership or control rights from traditional shares, but there are also emerging types such as reputation or reward tokens ; or they might exhibit entirely new properties in the future (Fisch, 2018, Nica, 2017). In particular, among the “equity tokens” which generally confer participation rights, there are “Investment Tokens” or “Security Tokens” which allow their holders to obtain a share of future profits, dividends or other financial returns put forward. available by the company. platform (Allen, 2018; Collomb, 2018, Shroff, 2018). Furthermore, other tokens could embody ownership rights over an asset, property or commodity and they are called “asset-backed tokens” (Collomb, 2018). After understanding that a digital token can embed several characteristics, it is worth emphasizing that all the rights mentioned above are not exclusive of each other and that the contours evolve over time with new properties (Collomb , 2018). Furthermore, as the author points out (Collomb, 2018), since a token has no status,.