Welcome to Smart Valley blog!
Dear friends,
It is our pleasure to present you the Smart Valley project and our team of enthusiasts, explorers, and pioneers. We often embark on new ventures and launch new initiatives, and this Medium blog is that latest of the bunch :)
Only a year or so ago the general public was hardly aware that blockchain technologies even existed. Than a real explosion happened in this field, and suddenly everyone was studying the market, creating project, and investing in ICOs. As you can imagine, we could not remain outside this phenomenon.
In 2016, only 46 ICOs were held, raising a total of $96 million. In 2017, the dynamics was completely different: several new ICOs are launched almost every day, and their number keeps growing. The amounts of investment raised by ICOs have grown, too: a total of $3.7 billion in 2017 (as opposed to $96 the year before). As the number of projects willing to hold an ICO increases, investors’ demands to their quality become higher. Early in 2017, almost every project presented to investors managed to achieve its Soft Cap; by contrast, at the end of 2017, only 20% of projects hit the mark. Investors’ interest has fallen somewhat after the peak reached by mid-2017, the market has become more mature, and the investors more cautious.
There is a number of reasons for this, including the disappointment experienced by those investors who participated in ICOs in the first half of 2017, expecting high ROIs, only to see the projects they had invested in launch under-cooked projects (or not launch anything at all). The value of such projects’ tokens fell relative to their ICO token price, and their investors, instead of enjoying profits, had to count their losses and hope for some future growth. Some countries, such a China, introduced harsh new regulations of the cryptocurrency market, forcing projects to either close or switch to other jurisdictions, resulting in wasted time and extra costs.
Yet another reason for investors’ reduced interest is the high number of failed projects, which can be divided in two groups. The first group includes those projects that were originally created with the intention to earn money (not for investors, though, but for the founder), also known as SCAMs. The second consists of projects that for one reason or other did not deliver on their claims (e.g., did not raise enough funds, to launch the product, made errors in their financial and economic model calculations, fell victim to new regulations, etc.). One of the most infamous recent cases is the project Tezos, which has raised $232 million during its ICO but now finds itself hit by numerous lawsuits from its investors.
SCAMs, however, are far more numerous. For instance, the Razormind project, which launched its ICO in in spring to create a blockchain-based OS called DeOS. The project recruited numerous media resources for its marketing campaign, including the popular site Coinidol.com. The team of Coinidol, upon receiving $1000 from the founder of Razormind Jawad Yaqub, began work on the promotional materials for the project; however, soon they realized that the project description was too vague and began doubting the founder’s motives. After they failed to receive from Yaqub any proof of his intentions, they decided not to publish the planned articles. Mr. Yaqub is not insisting that Coinidol return the money; meanwhile, the ICO was a success, raising $10 million, but so far there is no product, no MPV, no published code — nothing. The case of Razormind is just the tip of the iceberg: try searching for “SCAM” or “ICO fraud”, and you will get dozens of reports. What’s more, you have to consider that far from all frauds have been exposed!
As you can see, participating in an ICO is far from elementary. While transferring funds from A to B can be easy enough, the issue is choosing the B wisely — that is, selecting a worthy project to invest your hard-earned money into and avoiding SCAMs and potential failures.
Of course, issues experienced by investors are only one side of the coin. The other side is represented by the problems encountered by projects themselves: launching ICOs and raiding the necessary amounts of investment is becoming ever more difficult.
As for our own opinion on the issue and on the short-term prospects of the market, we agree with the Swedish economist, author, and public speaker Kjell Nordström, who famously said, “Everything that can be digitalized will be digitalized”. We view ICOs as not just a tool for launching projects and earning ROIs for investors but rather as a step into the future — a future based on ubiquitous implementation and successful use of the blockchain technology.
As we have already mentioned, at present only 20% of projects managed to raise the funds they need to launch the company. This is both by the unreliability of many themselves (or a lack of interest in their proposed products among the public) and investors’ well-founded caution. However, it is not just worthless or fraudulent projects that constitute the failed 80% but also — who knows? — potential unicorns, new Apple or Google.
For a successful project launch, an efficient communication has to be established among the three main market players: investors, the project itself, and experts. That’s what we were aiming at when creating Smart Valley: a closed, self-sufficient ecosystem that can ensure such efficient communication. Once it is achieved, the survival chances of high-potential innovative projects will grow dramatically, making us ever closer to the bright digital future :)
In our upcoming articles, we will explain how we are going to realize our plans. Please do ask questions — we will be glad to answer them! An exciting new era is beginning, and we are looking forward to your participation: feel free to take part in online discussions or visit one of our planned events, which we will announce in advance. And of course, stay tuned to all our news and updates published in our social medial channel!
See you soon in new blog posts!
Smart Valley Team
