ECIS 2020 Research Papers

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Abstract

Enabled by blockchain technology, token sales (TSs) have emerged as a new type of crowdfunding. Startups raise money through the sale of crypto tokens, which grant rights on a future application. In contrast to traditional forms of crowdfunding, issuers and buyers transact directly in TSs using blockchain technology. Owing to the absence of trust-creating intermediaries and control instances, a socalled ‘trust frontier’ emerges. Thus, the role and formation of trust in the context of TSs is an interesting field of study. Through an explorative qualitative study, we identify and analyse trustestablishing technological artefacts in TSs. We find that while some factors equally create trust in traditional crowdfunding and in TSs, TSs give rise to new trust-building technological artefacts (e.g., code hosting services, crypto exchanges) or increase the importance of existing artefacts (e.g., social media platforms). Our study contributes to research on blockchain and crowdfunding and provides guidance for issuers, buyers, and regulators in understanding the mechanisms of trust formation in the context of TSs.

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