The Life and Times of Blockchain Ventures: Innovation, Vulnerability, and Survival

Abstract

Blockchain ventures exhibit failure rates markedly higher than those of conventional startups, yet the technological drivers of their survival remain underexplored. This study examines how innovation and security risk shape the long-term survival of blockchain ventures. Drawing on detailed source code data from blockchain ventures' GitHub repositories, together with corresponding survival and market data, I employ two code-based metrics, code originality and code vulnerability, and estimate their effects on venture survival using Cox proportional hazards and Weibull accelerated failure time models. The results reveal a two-sided dynamic: higher code originality decreases failure risk through an appropriability channel, whereas greater code vulnerability increases failure risk through a legitimacy channel. Further analyses reveal that these effects are heterogeneous across venture development profiles. Originality reduces failure risk for pioneering ventures but increases it for imitative ventures, while vulnerability raises failure risk for both groups, with a substantially stronger effect among imitative ventures. Overall, this study links code-level technological characteristics to venture survival and highlights that effective survival strategies should align with a venture's development profile.