StandortRoom BZ E4.22, Universitätsplatz 1 - Piazza Università, 1, 39100 Bozen-Bolzano
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Kontakt Sabine Zanin
SchoolofEconomics@unibz.it
Financial incentives for open source development: the case of Blockchain
Andrea Canidio, IMT Lucca
StandortRoom BZ E4.22, Universitätsplatz 1 - Piazza Università, 1, 39100 Bozen-Bolzano
Dienststellen Press and Events
Kontakt Sabine Zanin
SchoolofEconomics@unibz.it
Abstract
Unlike traditional open-source projects, developers of open-source blockchain-based projects can reap large financial rewards thanks to a modern form of seigniorage. I consider a developer working on an open-source blockchain-based software that can be used only in conjunction with a specific crypto-token. This token is first sold to investors via an Initial Coin Offering (ICO) and then traded on a frictionless financial market. In all equilibria of the game, in each post-ICO period there is a positive probability that the developer sells all of his tokens on the market and, as a consequence, no development occurs .