On July 19, a group of interdisciplinary researchers from the University of Pennsylvania, with guidance from the esteemed Penn Law professor David Hoffman, published an in-depth study of initial coin offerings (ICOs) that promise innovative concepts like autonomous governance and operate by the belief that ‘code is law’. However, most of the ICOs the group researched failed to match the original contractual promises and the so-called ‘trustless trust’ offered by these projects had very little merit.
Also read: Japan Tax Agency Says Individuals Earning $1,800+ in Crypto a Year Will Declare Tax
University of Pennsylvania Study Looks Into Whether ICO White Paper Promises Match the Project’s Codebase
This week, researchers from the University of Pennsylvania and Penn Law professor David Hoffman have published an interesting working paper on ICOs called “Coin Operated Capitalism.” The paper was authored by university members Shaanan Cohney (computer science PHd), David Wishnick (a fellow at Penn Law’s interdisciplinary Center for Technology), and Jeremy Sklaroff (Penn’s JD/MBA program).
The study’s authors surveyed and audited the top 50 ICOs that raised the most funds in 2017 and researchers looked at whether or not the ICO promises made by the promoters and white papers actually matched the technology’s codebase. The study finds that there are glaring differences between what the ICOs’ code delivers and what the creators promised to their investors.
“The automated mechanisms found in code—known as ‘smart contracts’—are not the only way entrepreneurs can deliver on their promises,” Wishnick explained.
But, according to proponents, they are what make ICOs innovative.
Researchers from Penn Law looked at ICOs such as Tezos, Filecoin, EOS, Bancor, Tron, Tenx, Civic, Chainlink, Storj, Power Ledger, and many more.
