Research Report: 54% of All Money Raised Through ICOs Has Gone to Successful Projects

Siamak Masnavi
  • 15 Jul 2018
  • /
  • In #ICO

On Thursday (12 July 2018), Bloomberg released a research report (about the creation of cryptoasset platforms), which is the second part of a five-part series on the cryptoasset market, prepared by premier ICO advisory firm Satis Group.

Here, we focus on the section of the report that deals with the Initial Coin Offering (ICO) market and highlight some of the most interesting findings:

  • Despite regularity uncertainty and a generally bearish mood in the crypto markets, ICO fundraising is still doing very well. 
  • Globally, so far this year, ICOs have raised over $7 billion; this is nearly 50% of the amount raised in the whole of 2017 (despite a significant reduction in the prices of Bitcoin and Ethereum, which are typically used to fund ICOs, during the first half of this year).
  • Year to Date (YTD), the global ICO market is currently worth around 20% of the U.S. ICO market, which has had a strong first half (the highest volume since 2014).
  • Year on Year (YoY), growth has slowed for three reasons: regulatory uncertainty (primarily in the US); worries over upcoming infrastructure changes to the major platforms (such as Ethereum) on which most ICOs are built, with some ICOs hesitating around using the few recently introduced alternative platforms; and understandably smaller appetite (due to the recent six-month broad crypto market decline) amongst retail investors.
  • YTD, the global ICO market, which was almost non-existent a few years ago, has raised around 20% of the total for the U.S. Initial Public Offering (IPO) market.
  • In response to the U.S. SEC's tough stance on ICOs, some crypto projects have migrated from the U.S. to more crypto-friendly jurisdictions (such as Switzerland and Cayman Islands) for launching their ICOs.
  • Although the total amount raised through ICOs has continued to go up, the average deal size in premium projects (those raising over $6 million) and across all projects has gone down.
  • In terms of the total number of ICOs, approximately, 78% were identified as scams, 4% failed (i.e. "succeeded to raise funding but did not complete the entire process and... abandoned and/or refunded investors as a result of insufficient funding"), 3% were presumed dead (i.e. "succeeded to raise funding and completed the process, however... not listed on exchanges for trading and... not had a code contribution in Github on a rolling three-month basis from that point"), and 15% were successful (i.e. "succeeded to raise funding and completed the process and... listed on an exchange.. began trading", and managed to achieve deployment, a transparent published project roadmap, and some GitHub code contribution activity).
  • In terms of total U.S. dollars (around $12 billion) raised for ICOs to date, approximately, only 11% ($1.3 billion) went to scam ICOs (with the vast majority of that $1.3 billion going to just three fraudulent ICOs, which were Pincoin, AriseBank, and Savedroid), 14% ($1.7 billion) went to failed projects, 5% ($624 million) went to projects presumed dead, and 70% ($8.4 billion) went to higher quality projects that got as far trading on one or more exchanges, with nearly 79% of the $8.4 billion going to projects doing well enough to be considered successful. In other words, 54% of the total U.S. dollars raised to date went to successful ICOs.

 

Featured Image Credit: Courtesy of the Satis Group

South Korean Startup That Raised 29,000 ETH via ICO Is Shutting Down

Contents Protocol Team, a South Korean cryptocurrency startup that raised over 29,300 ether via an initial coin offering (ICO) and a private token sale in 2018, is shutting down and refunding its investors.

According to the startup’s website, Contents Protocol decided to shut down and refunds its investors over a continued lack of regulatory uncertainty, and over difficulties with its own goal of collecting data from local platforms like Watcha and Watcha Play. Watcha is a Korean movie rating and recommendations service, while Watcha Play is a streaming service similar to Netflix.

The startup was looking to reward the platforms and their users with its own native token, the CPT, for the data it collected, so it could then sell the data to content providers and create a better content production ecosystem. The idea didn’t seem to work as the platform didn’t see cryptocurrencies in a favorable light. The website reads:

There were numerous difficulties in encouraging participation from content consumers because of their negative perception toward cryptocurrency, price volatility and complex user experience. It was also a challenge to bring in content platforms who would provide data to Contents Protocol.

The firm added that since its capacity to collect data was limited, it was hard to give content producers insightful data that helped them improved the ecosystem. Legal and accounting risks associated with the uncertainty surrounding crypto taxes also contributed to the firm’s fallout.

Contents Protocol detailed it’s liquidating and distributing its remaining assets to investors based on the legal opinion and advisory from law firms in both Korea and Singapore. Its assets are to be converted to ether and then distributed to CPT token holders who requested an ETH compensation.

Its initial coin offering was held in December 2018, where it raised 29,337 ETH when the cryptocurrency was trading at about $115. It currently has 26,878 ETH in its reserves which will be distributed to CPT holders following a specific ratio:

asset distribution ratioSource: Contents Protocol

According to CryptoCompare data, ether is currently trading at $281 after rising over 72.8% in the last 30 days.

Featured image via Pixabay.