Blockchain and capital markets refers to the application of distributed-ledger technology to the systems through which businesses raise capital and investors hold and trade financial claims. Capital markets have historically relied on chains of intermediaries — banks, brokers, exchanges, clearinghouses, and transfer agents — to establish trust between strangers. A blockchain maintains a shared, tamper-resistant record without a central operator, which allows some of those functions to be performed by open protocols instead.
The academic literature approaches this shift from two directions: a microeconomic strand examining how decentralization changes the business models of finance, and a market-infrastructure strand that places blockchain among a succession of technologies reshaping how securities are traded and capital is raised. A macroeconomic frame comes from work on Schumpeterian creative destruction, in which technological innovation displaces incumbents and generates short-run turbulence alongside long-run productivity gains.
Decentralized business models and disintermediation
In an influential analysis of blockchain's disruption of finance, Chen and Bellavitis argue that blockchain technology reduces transaction costs, generates distributed trust, and empowers decentralized platforms, potentially providing a new foundation for decentralized business models. They draw a sharp distinction from earlier waves of financial technology: where fintech largely substituted banks with technology companies, blockchain enables true disintermediation, turning previously infeasible business models into viable ones.
The authors identify four decentralized financial business models: decentralized currencies (with Bitcoin as a form of "digital gold"), decentralized payment services, decentralized fundraising through ICOs and IEOs — directly a new capital-formation channel — and decentralized contracting through smart contracts and peer-to-peer lending, the same substrate on which decentralized autonomous organizations operate. Compared with traditional financial services, decentralized finance (DeFi) services tend to be more decentralized, innovative, interoperable, borderless, and transparent. On this view, DeFi can broaden financial inclusion, facilitate open access, encourage permissionless innovation, and create new opportunities for entrepreneurs; decentralization can reduce transaction costs and create network effects without incurring the costs of monopoly.
The same analysis is explicit about the limits of the model. Key challenges include fraud vulnerabilities, cryptocurrency volatility, regulatory uncertainty, and technical constraints. Building distributed trust on decentralized platforms can itself be costly, and decentralized systems face tensions between transparency and privacy as well as gaps in accountability.
The economics of technology in securities markets
The disintermediation thesis sits within a broader economics literature on technology and market structure. Malinova surveys the economic implications of fintech innovation for securities and capital markets, outlining the key economic issues, reviewing the relevant literature, and identifying open questions. The survey is organized around the technological developments affecting capital-market infrastructure and data analytics — electronic trading venues and high-frequency trading, blockchain technology, cloud computing, and machine learning — placing distributed ledgers as one of several forces remaking market plumbing rather than an isolated phenomenon. It also covers new investment and financing tools enabled by these advances, including exchange-traded funds and blockchain-based assets: technology reshaping both the trading side and the capital-raising side of markets. How such blockchain-based assets are priced is treated separately under token valuation.
Creative destruction and uncertainty
The macroeconomic frame for episodes in which a new technology displaces incumbent practices is Schumpeterian creative destruction. Sedláček models counter-cyclical uncertainty fluctuations as a by-product of technology growth: in a firm-dynamics model with endogenous technology adoption, faster technology growth widens the dispersion of firm-level productivity shocks, a benchmark measure of uncertainty. Faster technology growth spurs a creative-destruction process in which firms adopting the newest technology vintage enjoy productivity gains and create jobs, while non-adopters face rising labor costs, shed workers, and shut down more often — producing a temporary "Schumpeterian downturn." In contrast to uncertainty-driven business-cycle models, these uncertainty spikes are associated with positive long-run effects: aggregate productivity rises as more firms adopt the leading technology and obsolete production units are weeded out.
The empirical evidence supports this mechanism. Structural VARs on U.S. data from 1977 to 2014 show that after positive technology shocks, firm-level uncertainty, job creation, and job destruction all rise while aggregate employment falls temporarily. On average, about one quarter (27%) of the business-cycle variation in uncertainty is driven by technology shocks alone, and more than two thirds of the uncertainty spike around the 2001 dot-com bubble was growth-driven, whereas the Great Recession spike was essentially unrelated to technology shocks.
This framework offers a lens for interpreting volatility in blockchain finance: the dot-com episode shows that turbulence and elevated uncertainty accompanying a genuine technology wave can coexist with underlying productive change. Whether blockchain-based finance follows the same pattern is an empirical question the model does not itself address.
Relevance to Caper
Launchpads occupy the primary-market layer of decentralized finance. Where traditional capital formation is episodic and gated — an IPO or venture round occurs once, on negotiated terms, through intermediaries — a launchpad makes capital formation continuous and permissionless. On Caper, capers raise capital through bonding-curve markets that quote a continuous price, and token holders govern through on-chain proposals; see raising funds. This places launchpad fundraising within the decentralized-fundraising business model that Chen and Bellavitis identify as a new capital-formation channel, implemented as standing market infrastructure rather than a one-off issuance event.
References
- Yan Chen and Cristiano Bellavitis (2020). Blockchain disruption and decentralized finance: The rise of decentralized business models. Journal of Business Venturing Insights, Vol. 13, e00151.
- Katya Malinova (2019). Economics of Technology, Securities and Capital Markets. SSRN Working Paper No. 3461760.
- Petr Sedláček (2020). Creative Destruction and Uncertainty. Journal of the European Economic Association, Vol. 18, Issue 4, pp. 1814–1843.