The Role of Trust in the Context of Initial Coin Offerings
Author
Summary, in English
This thesis investigates the role of trust in the context of decentralised finance (DeFi). Representing a new paradigm shift in finance, DeFi emerge from the technological developments that we have witnessing in the last decades, particularly decentralised ledger technologies (DLTs) of which Blockchain is perhaps the most popular. DeFi is changing the way that firms raise financial capital and a clear example is Initial Coin Offerings (ICOs) – a financing mechanism in which new ventures issue tokens in exchange for established cryptocurrencies through a decentralised and desintermediated process.
Despite the several benefits associated to ICOs, such as no intermediation costs, absence of geographical limitations, and the possibility of smaller investors and innovative firms to be included in the financial markets, the fact is that this financial source entails significant risks. For instance, the lack of information available about the firm, the absence of a central entity to coordinate the financial transactions, and the digital nature of the business, might represent a threat for prospective investors.
While the existing literature suggests that trust has a significant role in mitigating information asymmetries between investors and firms and that entrepreneurs can send trustworthiness signals to propsective investors in order to earn their trust and consequently experience easier access to financial capital, it primarily focuses on traditional finance. In this thesis I ivestigate the influence of signalling the two dimensions of trust – goodwill trust and competence-based trust – on the fundraising success of token offerings. Thus, this thesis aims to test the previous knowledge from trust literature in a novel and distinct context: decentralised finance.
The analysis employs a quantitative approach, using a cross-sectional dataset and diverse quantitative methodologies in order to enhance our understanding of how signals of trustworthiness sent out by the top management teams of new ventures influences the probability of reaching the soft cap during ICOs.
Despite the several benefits associated to ICOs, such as no intermediation costs, absence of geographical limitations, and the possibility of smaller investors and innovative firms to be included in the financial markets, the fact is that this financial source entails significant risks. For instance, the lack of information available about the firm, the absence of a central entity to coordinate the financial transactions, and the digital nature of the business, might represent a threat for prospective investors.
While the existing literature suggests that trust has a significant role in mitigating information asymmetries between investors and firms and that entrepreneurs can send trustworthiness signals to propsective investors in order to earn their trust and consequently experience easier access to financial capital, it primarily focuses on traditional finance. In this thesis I ivestigate the influence of signalling the two dimensions of trust – goodwill trust and competence-based trust – on the fundraising success of token offerings. Thus, this thesis aims to test the previous knowledge from trust literature in a novel and distinct context: decentralised finance.
The analysis employs a quantitative approach, using a cross-sectional dataset and diverse quantitative methodologies in order to enhance our understanding of how signals of trustworthiness sent out by the top management teams of new ventures influences the probability of reaching the soft cap during ICOs.
Department/s
Publishing year
2025-10-08
Language
English
Publication/Series
Lund Studies in Economics and Management
Issue
176
Full text
Document type
Dissertation
Publisher
Media-Tryck, Lund University, Sweden
Topic
- Business Administration
Keywords
- Initial Coin Offerings
- Decentralised Finance
- Tust
- Human Capital
- Behavioural Finance
- Entrepreneurial Finance
Status
Published
ISBN/ISSN/Other
- ISSN: 0284-5075
- ISBN: 978-91-8104-603-8
- ISBN: 978-91-8104-602-1
Defence date
10 November 2025
Defence time
13:30
Defence place
EC3:108
Opponent
- Larisa Yarovaya (Associate Professor)