According to the ICO advisory firm Satis Group, cryptoasset platforms have grown significantly since trading networks came into being.
Currently, the cryptocurrency industry boasts more than 1,500 cryptoassets compared to just 14 in 2013. The study shows that although 50 percent of the cryptoassets are classified as tokens, nearly 90 percent of this value lies in coins.
According to the Satis Group Crypto Research, more than 70 percent of all ICO funding went to high-quality projects, though out of the 70 percent, 8 out of 10 projects turned out to be scams.
The ICO Market Overview
The need for funding has continued to grow, despite the decline in regulatory uncertainty and declining market performance. However, the growth has slowed down, an aspect that is attributed to the lack of regulation for this digital currency and various concerns that have been raised concerning the technical changes on various networks, such as Ethereum. The crypto market decline also led to a lower enthusiasm among retailers.
Due to this, the major ICO projects have shifted outside the US to launch their ICOs due to the increasing regulations in the US. The market share has shifted to, among others, countries such as Singapore and Switzerland.
In terms of the average ICO size, the report states:
“Although aggregate fundraising has continued to grow, deal quality (measured by average deal size) in both our premium (projects raising $6M+) and total baskets has declined.”
Satis Group attempted to classify ICOs using quality. The perspective used was based on the number of ICOs on the market and the amount raised. Both the analysis looked at the lifecycle of the ICO, right from the original project proposal to the last phase of being listed on a cryptocurrency exchange.
This led to the breakdown of the ICOs into groups: identified scams, failed ICOs, gone dead ICOs, successful ICOs, Promising ICOs and Dwindling ICOs. Among these, it was found that approximately 78 percent of the total ICOs analyzed turned out to be Identified scams. This means that the project expressed the availability of an ICO investment via social media, a website or an ANN thread. However, these ICOs never had the intention of fulfilling the project implementation duties using the funds raised and were deemed to be scams on the forums and boards.
Another report from a research team at Boston College reports that only 4 out of 10 projects are active way into the fifth month of trading.
Whether this state of affairs will change for the better remains to be seen. However, the report applauds the adoption of Ethereum which has a high level of community support and developer buy-in.
Yet for all the growth around these assets, the report also points out one troubling fact – a majority of the ICOs launched to date have been scams.
This being the second research so far by the group, we look forward to more information from the series.