Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/316874 
Year of Publication: 
2025
Series/Report no.: 
CESifo Working Paper No. 11760
Publisher: 
CESifo GmbH, Munich
Abstract: 
After initial coin offerings (ICOs), decentralized digital platforms (DDPs) decide whether to go public or remain private. We explore the implications of the public-versus-private decision for the growth and decentralization of DDPs. Employing a difference-in-differences framework, we find that public DDPs scale faster post-listing relative to matched private DDPs. An important driver behind public DDPs' superior growth is a spillover effect of financial speculation on fundamental platform activity, especially when DDPs are undervalued, hastening network effects. The going-public decision also facilitates DDP decentralization, although this stems mostly from the left tail of the token ownership distribution, while blockholders largely remain in control. Exploring the trade-off between going public through token exchange listings and remaining private with the help of institutional investors, we find that crypto fund-endorsed token listings yield more platform growth than unendorsed listings, while crypto fund backings without listings create the least value. Overall, our study suggests that early-stage startups may economically benefit from tokenization and creating liquid markets for venture tokens.
Subjects: 
entrepreneurial finance
decentralized platforms
tokenization
blockchain technology
JEL: 
G24
G32
K22
L26
Document Type: 
Working Paper
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