A study recently conducted by Satis Group has found that in 2017 “over 80 percent” of ICOs were scams that cumulatively managed to get about 11 percent of the funds investors poured into the industry. This suggests that while a large number of token sales are scams, most of the money still goes to legitimate projects.

The 11 percent figure the 30-page document reveals is significant, but the number drops to 0.3 percent if we stop considering the three largest scams that raised funds last year. These were Pincoin, which raised $660 million, Arisebank, which raised $600 million, and Savedroid, which raised $50 million. Their total equals $1.31 billion.

The study identified scams as projects that didn’t initially plan on following their roadmap, or that were deemed by the community as scams. Aside from these, it found that four percent of ICOs failed to go through with their plans, and three percent ended up “dead.”

ICO death, according to Satis, means that the project has “not [been] listed on exchanges for trading and has not had a code contribution in Github on a rolling three-month basis from that point in time.”

Per Satis’ research “over 70% of ICO funding (by $ volume) to-date went to higher quality projects.” An analysis of the over 1,500 crypto assets in circulation showed that about half were launched on top of an existing blockchain. The most popular platform was Ethereum, launching 86 percent of tokens, with Waves following at 2.9 percent. NEO came third at 2.3 percent.

The group noted that Ethereum has a number of advantages over other similar platforms, including a first mover advantage, “the entire market share of the ICO discovery phase through 2017,” community support, and more liquidity. The document reads:

Emerging platforms have been able to differentiate themselves with higher levels of transaction throughput (transactions per second), which generally comes at the cost of higher levels of centralization.

Satis Group

Avoiding Regulatory Hurdles

Elsewhere in its study, Satis also found that the number of ICO projects based in countries known for their appealing regulations has significantly increased. While in 2017 most projects were US-based, this year the Cayman Islands dominate every other territory, being chosen by 40 percent of projects, up from 3 percent.

In the US, the number of fundraising projects dropped from about 32 to 10 percent. Countries like China and Russia lost their representation on the charts from 2017 to 2018, presumably because of their approaches to ICOs.

Near the end of the report Satis Group’s author Sherwin Dowlat hinted more are set to come in the future, as the organization delves into the “wide variety” of regulatory approaches states throughout the world are choosing.