One of the main themes of 2017 was the ICO phenomenon. New technologies blockchain and cryptocurrency allowed startups from around the world to gain access to capital, which they had never dreamed of before. As a result, for the year with the help of sales of tokens more money was raised than venture investors gave out to the projects. However, such a fairy tale could not last forever, and sobering came pretty quickly, and the ICO projects began to die one by one.
Gradually, the credibility of this investment tool was shaken. Today we will talk about the scale of the problem and how a new generation of blockchain startups is trying to solve it.
Some statistics: survival of ICO-projects
According
to Tokendata
statistics , out of 902 ICO 2017, 142 projects failed even at the fund-raising stage, another 276 ceased to exist, either as a result of the flight of founders with investors' money, or because of the gradual cessation of activity. Thus, 46% of last year’s ICOs had already collapsed by the winter of 2018.
At the same time, another 113 projects can be described as “half-failed” - in their case the team’s activity in social networks is minimized or the supporting community is so small that there are no chances for future success. Taking into account these figures, the number of unsuccessful ICO-projects in 2017 is already increasing to 59%.
Despite the fact that many projects initially looked suspicious, investors invested $ 233 million in them. All this could not pass without a trace, and by the spring of this year, the ICO image was seriously shaken. As a result, teams of new projects are forced to put more effort into convincing investors of their chances for final success. And that's how they do it.
How ICO-projects convince investors
Currently, there are three areas of activity for the teams of ICO-projects, aimed at building relations with investors and minimizing their doubts about the prospects of companies.
Maximum openness
If last year for a successful sale of tokens to the project, only a beautiful site and a short White Paper could suffice, now the situation has changed. At the moment, for a successful ICO project, it is necessary not only to prepare marketing materials, but also to build an active community.
That is why project teams are forced to engage in the development of offices in social networks and answer questions in forums. However, this is not enough, investors want to see real work from the very beginning of the project, so many teams now open the development process and publish the source code of their applications on GitHub, so that anyone can see and study it.
An example of such openness: the
BitDegree platform
recently conducted a successful ICO and raised $ 22 million. The project team has a number of repositories on GitHub. Spread the source code and representatives of the blockchain-payment system
Monetha .
Relationship with real assets
Another way to demonstrate the fact of reduced risks is to link products and manufactured tokens to real assets. This has its own logic - at the peak of ICO's popularity in 2017, most projects literally sold air. There was nothing behind the tokens except the founders' plans to create revolutionary services that are inevitable success. As later statistics showed, such optimism was premature.
Therefore, now investors are more trusted by projects that stand more firmly on their feet and whose activity is reflected in the real world, for example, by linking to an asset. This is logical, if the project team has a real company that owns some assets tied to the land or geographic location, then it will be difficult for the founders to just drop it all.
Therefore, there are projects like
Ligthcash , whose team creates its own cryptocurrency,
backed by gold. Gold is mined in real deposits - the project owns a real gold mining company, publishes licenses for gold mining and processing, and even shows videos of how these works are conducted:
And, of course, demonstrates the final result:
Real Money Offer
Some projects go even further, and convince potential investors even easier - by offering them a stake in the future company. Indeed, one of the main claims of many analysts and experts to ICO is that blockchain startups take investors' money for tokens, with a significant part of the tokens remaining in the ownership of the project’s founders, and investors can only hope for an increase in the price of tokens. In the case of buying shares, the same investor can count on both the rise in the value of the security and dividends.
Today, projects are beginning to emerge that seek to transfer this model to the world of ICO. Example: an escort agency that works on the blockchain (this is a niche!)
PinkDate offers to its ICO participants not just tokens, but “token-shares” that imply dividend payments.
Another way to stimulate investors is to offer them the opportunity to open a deposit in tokens, on which interest will then accrue (the Lightcash project already mentioned above follows this path).
Conclusion
The unprecedented growth of ICO simply had to end. As in any other new industry, the blockchain start-up market is still emerging and growing up. And the fact that in the past to attract millions of dollars was enough a couple of beautiful documents, but today you need to write and upload code, invest in real assets and share profits with investors - these are positive signs that suggest that, despite the statistics, ICO still has there is a future.