Research On Blockchain Enterprise Financing Methods And Optimal Decision-makin

With the development of a new-wave digitalization in the world,the blockchain technology is applied in all walks of life,so a large number of blockchain start-ups have emerged rapidly in recent years.For start-up companies,financing is an important means for most companies to grow and develop.Generally,companies will obtain capital through bank loans or venture capital.Due to the development of blockchain technology,blockchain start-ups have a new financing method,which is different from traditional financing methods,namely ICO(Initial Coin Offering)financing method.And the blockchain startup can build a global blockchain platform and raise funds from investors through ICO,and after the product is put on sale,consumers need to buy tokens to exchange products.Meanwhile,investors can sell the tokens purchased during the ICO and obtain high pay-back.This dissertation focuses on this new financing method,and helps readers understand its characteristic from the following perspectives.First,how to reasonably set the terms of ICO to promote the success of financing.Second,the advantages and disadvantages of ICO financing compared to traditional financing.Third,whether the company can obtain market information from investors by designing the ICO mechanism or not.Fourth,whether regulatory intervention is a good thing for companies or not,and what impact will it have on blockchain company.This dissertation assumes that there are three parties in the economic system: blockchain company,investors,and consumers.According to the research framework of game theory,blockchain company and investors will choose their own optimal behavior strategy to make the entire system reach equilibrium state.When studying multi-period problem,since the participants’ decision is affected by the current and future expected parameters,we also adopt research methods such as dynamic programming and numerical simulation.In most cases,we give the explicit expression of the participants’ optimal decision-making.For the blockchain firm using ICO to make production and financing decisions,we propose a multi-stage model to describe the transaction behavior of risk-neutral investors,and to explain how the firm organizes production in the long-run and also describe the optimal issuance and production strategy of the firm,and to describe the dynamic trend of the token price and its factors.We show how the firm designs mechanism to make its ICO success,and find that market participants’ decision-makings do not affect token market price,but firms’ parametric design of ICO can.We compare ICO financing mechanism with the traditional bank-financing mechanism and find that it is significantly better than traditional bank-financing when the relative capacity cost is low,but when the relative capacity cost is high,the firm may under-build its capacity.It is also find that the firm can flexibly adjust the allocation of their total revenue between ICO phrase and production phrase by setting ICO parameters.In numerical experiments,we consider three demand distribution scenarios(IID,super-martingale process and sub-martingale process),and explore the factors that affect token price and company profitability.Subsequent expansion relaxes the assumption of investor risk preference in the model,and discusses the situation of risk aversion and risk preference.When investors are risk-averse,the firm’s profitability is insensitive to the degree of speculators’ risk aversion.When investors are risk-averse,firms have higher expected profits and realize revenue earlier.In terms of the authenticity of the project,it is obvious that blockchain company has more information than investors,but experienced investors will have more market demand information than blockchain start-up.Facing information asymmetry,blockchain firm can choose to obtain accurate consumer willingnessto-pay from investors through mechanism design.We construct a mechanism design model for blockchain company,and describe how enterprise formulates ICO contracts under two kinds of equilibrium—pooling equilibrium and separation equilibrium to maximize their own profits.The study found that,due to the cost of acquiring information,the firm is not always able to eliminate information asymmetry.In most cases,the firm will be better at distinguishing market conditions than not,that is,production and profit will be higher.We also characterize the optimal mechanism choice for firm in different situations,and compare other financing methods with ICO financing.Due to the quick procedure of ICO financing and the lack of supervision,investors are likely to encounter the default risk after the financing of the company,such as running away with money,suspending operations,etc.,which will make investors lose a lot of money.The introduction of regulation is beneficial to investors,but the impact of regulation on blockchain firm is unknown.By constructing an unsupervised model,we discuss the operation strategy of the company under the default risk and the investment strategy of investors who know the firm’s potential behavior,so as to deduce the optimal behavior of the firm and get its profit under different circumstances.After that,we built a regulatory model and compared two models.We found that regulation will not reduce the profit of firm,and in most cases,it is beneficial to the production of enterprises,increasing the production quantity and total social welfare.However,in a few cases,the regulation will reduce the production quantity and total social welfare.In some cases,the presence or absence of regulation will not affect the production quantity and profit of the firm.For investors,the existence of supervision eliminates the default risk,but meanwhile reduces the risk compensation that the firm give for investors.In some areas without supervision,the expected returns of investors are greater than those when supervision exists.The innovation of this dissertation lies in the theoretical model.First,most of the existing ICO research focuses on empirical research,describing what factors are related to the successful issuance of ICO.We give blockchain company a clear issuance strategy to guide the success of ICO.Second,the firm’s production decision and financing decision will influence each other.Existing research usually separates financing behavior from production and operation behavior and conducts conclusion separately.We study the long-term blockchain company from the perspective of operation management,and combine the firm’s production and financing decisions,and then provide management suggestions for enterprise operation.Compared with the existing research,this paper not only further studies ICO financing,but also closer to reality.Third,the existing literature lacks research on investors,and simply assumes that the participants who buy tokens are all blockchain users,but it is clear that cryptocurrencies have financial attributes and there will be a large number of investment behaviors.We describe the behavior of company and investors from the perspective of the modeling,as well as the token trading market which is under the joint influence of both parties.Fourth,it innovatively studies the design of ICO mechanism in the environment of information asymmetry.Fifth,we innovatively characterize the impact of regulation from the perspective of modeling.We explore the impact of regulation on enterprise,hoping to provide academic insights for subsequent policy formulation.