Investigating Factors Affecting the Success of the Initial Coin Offering method with the Random Forest Algorithm

Document Type : Research Paper

Authors

1 Professor of Economics, Department of Economics, Yazd University

2 PhD Candidate, Department of Management and Economic, Tarbiat Modares University

3 Associate Professor, Department of Management and Economic, Tarbiat Modares University

10.30465/jnet.2023.44220.1994

Abstract

At the current time, the aggravation of the problem of stagflation in the country has caused more emphasis on all policies of the supply-side, and on top of that, the financing of entrepreneurs with an emphasis on reducing inflation. The initial coin offering method is a new method for financing businesses based on blockchain technology, which realizes the possibility of attracting high capital in a short time compared to other methods. In the meantime, small and medium-sized enterprises that, despite the need for small levels of resources, have an undeniable role in production of Countries, can be good candidates for applying this method. The explanation of this method and the identification of factors affecting its success to solve the existing information gaps can provide the process of perfect use and benefiting from its potentials. Therefore, in this article, by collecting 307 ICO in 2016 to the end of 2018, the factors influencing their success-include the characteristics of the team, project, campaign and social networks- in a cumulative process by Random Forest algorithm has been investigated. In the recent article, the total raised capital and Percentage of hard cap raised has been considered as a criterion of success in two series of separate models. By dividing the level of priority of the features into three levels, the findings show that three features of the total number of project tokens, the number of white paper pages, the clarity of the team's share of the token have the priority of level one and have the highest role in the success of an ICOs campaign.

Keywords


بهاری­فر، حامد، شهرابی، محسن، جلال، محمد (1395)، الگوی تأمین مالی بنگاه­های کوچک و متوسط 6. تأمین مالی جمعی: مفاهیم، مدل­ها و ملاحظات قانون‌گذاری، مرکز پژوهش­های مجلس شورای اسلامی.
چاره­خواه چیا، فرطوسی، محمدرضا و ملایری، محسن (1393)، سرمایه­گذاری در کسب­وکارهای نوپا با نگاهی بر وضعیت کشور و منطقه، دفتر مطالعات و برنامه­ریزی گروه مطالعات راهبردی.
چیت­ساز، احسان، بیگدلی، محمد (1400)، عوامل مؤثر بر موفقیت تأمین مالی جمعی به روش عرضه­ی اولیه­ی بهامُهر از طریق صرافی­های آنلاین، توسعه کارآفرینی، دورة 14، شمارة 2، تابستان 1400، صص 221-240.
گروه مطالعات محیط کسب­و­کار، (1397)، گزارش نظارتی عملکرد دولت در بهبود رتبه ایران در گزارش سال 2018 رقابت­پذیری جهانی»، مرکز پژوهش­های مجلس شورای اسلامی.
Ackermann, E. Bock, C. & Bürger, R. (2020). “Democratising Entrepreneurial Finance: The Impact of Crowdfunding and Initial Coin Offerings (ICOs)”. In A. Moritz, J. H. Block, S. Golla, & A. Werner, Contemporary Developments in Entrepreneurial Finance (pp. 277-308). Switzerland: Springer.
Adhami, S. Giudici, G. & Martinazzi, S. (2018). Why do businesses go crypto? An empirical analysis of initial coin offerings. Journal of Economics and Business, 100, 64–75.
Albrecht, S. Lutz, B. & Neumann, D. (2019). The behavior of blockchain ventures on Twitter as a determinant for funding success. Electronic Markets, 30, 241–257.
Amsden, R. Schweizer, D(2019), Are Blockchain Crowdsales the New “Gold Rush”? Success Determinants of Initial Coin Offerings.
Anson,Mark,(2018),"Initial coin Offering: Economic Reality of Virtual Economics?" Journal of Private Equity 21(4):41-52.
Beck, Thorsten, Demirguc-Kunt, Asli (2006), Small and medium-size enterprises: Access to finance as a growth.
Berg, Andrew, Ed Buffie, Catherine Pattillo, Rafael Portillo, Andrea Presbitero, and Luis-Felipe Zanna. (2015). “Some Misconceptions about Public Investment Efficiency and Growth.” IMF Working Paper, forthcoming.
Biasi, J. & Chakravorti, S. (2019). The Future of Cryptotokens. Disruptive Innovation in Business and Finance in the Digital World, 20, 167-187.
Bourveau, T. George, E. T. Ellahie, A. & Macciocchi, D. (2018). Initial Coin Offerings: Early Evidence on the Role of Disclosure in the Unregulated Crypto Market
Brochado, A. (2018c). Snapshot das Initial Coin Offerings (ICOs). (CMVM, Ed.) Cadernos do Mercado de Valores Mobiliários, 60, 53-76.
Breiman, L. (2001). Random forests Machine Learning 45(l), 5-32.
Campino, J. (2021), "Success Determinants of Initial Coin Offerings (ICOs)", Management, specialization of Strategy and Entrepreneurship, Business School.
Chen, R. R. & Chen, K. (2020). A 2020 perspective on “Information asymmetry in initial coin offerings (ICOs): Investigating the effects of multiple channel signals”. Electronic Commerce Research and Applications, 40.
Cohney, S., Hoffman, D., Sklaroff, J., & Wishnick, D. (2019).Coin Operated capitalism. Columbia Law Review, 119(3), 591-676.
Coinschedule.(2020, January 22). Coinschedule. Retrieved from https://www.coinschedule.com/.
Cui, Xue, Shibata, Takashi.(2017)," Investment strategies, reversibility, and asymmetric information", European Journal of Operational Research, 2017, vol. 263, issue 3, 1109-1122.
Fahlenbrach, Ruediger, Frattaroli, Marc (2020), " ICO investors", forthcoming in Financial Markets and Portfolio Management, available at: Financial Markets and Portfolio Management.
Fisch, C. (2019). Initial coin offerings (ICOs) to finance new ventures. Journal of Business Venturing, 34(1), 1–22.
Frankenfield,J.(2019)," Initial Coin Offering (ICO) Definition. Retrieved Sep 2, 19.
Hartmann, F., Grottolo, G., Wang, X., & Lunesu, M. I. (2019). Alternative Fundraising: Success Factors for Blockchain-Based vs. Conventional Crowdfunding. Blockchain Oriented Software Engineering (IWBOSE), (pp. 38-43).
Hastie, T. 2001, The elements of statistical learning: data mining, inference, and prediction, In Springer series in statistics New York, xvi: p. 533.
Greiner, M., Pfeiffer, D., Smith, R.D., (2000)," Principles and practical application of the receiver-operating characteristic analysis for diagnostic tests", Preventive Veterinary Medicine, Elsevier, 30 May 2000.
ICOBench. (2020, January 1). ICO Bench. Retrieved from https://icobench.com.
Jong, A. d., Roosenboom, P., & Kolk, T. v. (2018). What determines success in Initial Coin Offerings? SSRN.
Kaivanto, Kim, Stoneman, Paul (2007), Public provision of sale contingent claims backed finance to SMEs: A policy alternative, Research Policy36.
Min, J.H., Y.C. Lee, 2005, Bankruptcy Prediction Using Support Vector Machine With Optimal Choice of Kernel Function Parameters, Expert Systems with Applications, No. 28, PP. 603–614.
Momtaz, P. P. (2020). Initial coin offerings, asymmetric information, and loyal CEOs. Small Business Economics. .
Sidiki, Sanita(2014), " Startup Financing Trends in Europe.", Tilburg University law school. 1-65.