As anticipated, once blockchain technology was introduced, several uses followed. In particular, with the growing development of the blockchain-based business market, a new and more adequate form of capital raising for these projects has become necessary (Fisch, 2018; Momtaz, 2018; Rhue, 2018). Indeed, the initial coin offering began 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 only at the blockchain community as the investor groups and purposes are rapidly expanding and the phenomenon has already become global and of significant dimensions. plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an original essay First of all, after having highlighted how the authors describe the phenomenon, it is important to now consider the fundamental aspects of this innovative fundraising method. Therefore, the Initial Coin Offer, which can also be called "token sale" or "crowdsale", can be considered as a hybrid fundraising tool between the more traditional IPO and the more modern crowdfunding. In fact, 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 generally engaged in the initial development of the business 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 takes place between investors and businesses (Rhue, 2018). In particular, most ICOs use the Ethereum platform whose main attribute is 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, suggests a standardized infrastructure for generating new tokens on its blockchain platform (Martinez, 2018). Beyond the technical aspects, in order to subsequently study the benefits and risks of initial coin offerings, it is equally important to understand the basic procedure and structure of this fundraising method. First, to attract investors and provide them with information about the project, the developers 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 the necessary data of the ICO process that an investor might need to make an informed decision (Benedetti, 2018 ; Bouvreau, 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 ICO prospectus contains almost only a technical explanation of the technology behind the project (mainly blockchain initiatives) and the benefits it can bring to users. In the next chapter, studying all the potential risks that an ICO entails, I will remember this point since the lack of information disclosure and in the White Paper guidelines constitutes the main reason that generates information asymmetry (Martinez, 2018). However, at this stage, during which the announcement of the ICO comescommunicated through conferences, meetings, online and social media, the tokens that have been developed by issuers should not yet be usable and functional (Collomb, 2018). In fact, as Rhue (2018) clearly specifies, before launching the ICO, the company requesting capital must also define the total supply of specific tokens, the decimal token, the initial value of a single token and also the accepted cryptocurrencies in exchange. In particular, Conley (2017) also highlights the importance of creating a fixed number of tokens and announcing it clearly before selling them. Furthermore, once the declared maximum number is reached, the company should not issue these specific tokens again, otherwise pricing problems, opportunistic behavior and speculation may arise (Conley, 2017). Subsequently, it is common to have a pre-ICO, or token pre-sale as investors are allowed to purchase the tokens before the official crowdsale begins (Martinez, 2018). Pre-sale, usually defined with smart contracts other than crowdsale, offers discounts and, therefore, investors can purchase tokens at cheaper prices and sometimes get extra bonuses (Martinez, 2018). As a result, it is clear that first-time buyers have several advantages. However, Martinez (2018) specifies that, in most cases, start-ups offer the opportunity of a pre-ICO especially to “accredited” investors, which constitutes a larger share of the funds raised in this phase. The official sale of tokens to the public takes place according to the guidelines published in the relevant White Paper. At this stage, the exchange of tokens and cryptocurrencies between issuers and buyers takes place through the provision of the code or address. As explained before, the accepted cryptocurrencies are specified in the initial document; otherwise, the most commonly traded ones are usually recognized (Martinez, 2018) There is no general principle that concerns and manages the duration of ICOs, since it can be fixed or cannot even be declared; it can last a few seconds, weeks or months (Collomb, 2018). According to Martinez (2018), the duration of the ICO call could vary depending on the nature and objectives of the project, in fact the larger the network needed, the longer the ICO will last. Alternatively, as Collomb (2018) recalls, token issuers often determine the closure of the crowdsale of an ICO when the "cap", i.e. the preset maximum amount, is reached. Likewise, a minimum threshold is also set and, if not reached, the project and the ICO risk being canceled (Collomb, 2018). However, Bourveau (2018) specifies that both capped and uncapped ICOs can exist. Furthermore, it is essential to state that one of the main characteristics of ICOs is to provide token holders with the possibility of creating a secondary market by exchanging the purchased tokens and, consequently, generating liquidity from their investment. In fact, Momtaz (2018) claims that, since the main source of liquidity for investors is the exchange of tokens acquired through the ICO, the objective is to include it in the list of a token exchange after the closing of the ICO crowdsale. The exchange takes place on the cryptocurrency market for tokens, which is still based on a blockchain system and guarantees 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 that accepts a specific token and its project, the ICO is doomed to fail, and as early as early 2018, it was reported that nearly half of 2017's ICOs failed (Momtaz, 2018 ).Theundefined framework of token properties As mentioned before, there is no complete and exhaustive definition of ICO mainly due to the fact that the tokens issued may have different properties and rights incorporated. Even in the literature, in fact, confusion is created as the term "token" is often used for the more general term "money". In this section, after an in-depth study of several articles, I will provide a scheme of the attributes that a token can take on. However, it is essential to keep in mind that, on a technical level, all tokens have the same principles and foundations of the blockchain system and cryptography (Shroff, 2018). To distinguish the types of money, first, it is worth mentioning “cryptocurrency coins” or “currency tokens” which generally denote a digital means of exchanging value and function as a currency (Allen, 2018; Bourveau, 2018; Fisch, 2018; Shroff, 2018; Zetzsche, 2018). Secondly there are “infrastructure coins”, as defined by Bourveau (2018), which support the creation of a new platform with the development of smart contracts. Thirdly, there are ICO tokens that are often named differently and not all authors include the full range of properties. Indeed, Bourveau (2018) refers to them as “utility coins” because they generally offer token holders the benefit of receiving products or services previously disclosed in the White Paper. For example, these digital tokens may give access to the platform, the system, or may receive other benefits made accessible by the project and the decentralized service in question (Adhami, 2017; Pilkington, 2018, Shroff, 2018). Similarly, utility tokens could entail future rights that holders obtained during the ICO (Allen, 2018). However, the specific rights granted by a token may differ and may include several subcategories: “usage tokens” which provide usage rights such as a license to use a software program; the “community token” which gives membership to a community; the “participation tokens” that allow one to be part of governance and often voting rights (Zetzsche, 2018; Collomb, 2018). Indeed, tokens might resemble characteristics of securities, assets or shares, inferring ownership or control rights of traditional shares, but there are also emerging typologies such as reputation or reward tokens; or they could exhibit entirely new properties in the future (Fisch, 2018, Nica, 2017). In particular, among the "equity tokens" that generally confer participation rights, there are "investment tokens" or "security tokens" that allow holders to obtain a share of future profits, dividends or other financial returns made available by the platform (Allen, 2018; Collomb, 2018, Shroff, 2018). Furthermore, other tokens may incorporate ownership rights to an asset, property or commodity and are called “asset-backed tokens” (Collomb, 2018). After understanding that a digital token can incorporate different characteristics, it is worth highlighting the fact that all the rights mentioned above are not mutually exclusive, and the framework evolves over time with new properties (Collomb, 2018). Furthermore, as the author points out (Collomb, 2018), since a token does not have a globally accepted legal status, it is not appropriate to classify it in a clearly pre-established legal category such as an investment contract. However, it is now clear that tokens, mainly used during the ICO process in a cryptocurrency exchange, entitle holders to exercise various rights and are always protected with their own cryptographic code and protocol (Collomb, 2018). Despite this undefined picture of the properties of tokens, as explained, the authors agree on the,.