What Matters to Crypto Investors? Insights From Token Offerings on the Ethereum Blockchain

Abstract

This paper studies when entrepreneurs disclose qualitative or soft firm information to raise external capital through token offerings. By using transaction-level blockchain data and real-time disclosure for a sample of 3,009 token offerings, this study demonstrates three main results. First, successful entrepreneurs report more soft information in the pre-announcement period when information asymmetry is high. Second, among all information items disseminated to investors, corporate strategy is the most value-relevant type of content. Third, during fundraising campaigns, soft information disclosure becomes costly because it increases the risk of creating investor disagreement. Consistent with theory, this study shows that a low-disclosure practice induces more investments when information asymmetry decreases.