4 Major Changes in ICO World
Major Changes in the Modern ICO World
Some still consider Initial Coin Offering (ICO) a buzzword. In reality, although it still has its impact on the IT-world, the situation has changed drastically over a single year. Old concepts of ICO process are lost forever. Instead, a new, significantly different era has come. Let’s find out which 4 substantial changes it brings to the ICO scene and how founders, investors, and other market players need to respond.
Image source: Hacker Noon
How ICOs Came Along in the First Place
The ICO dawn goes back to 2013 when MasterCoin launched the very first fundraising event and raised approximately 5k bitcoins ($500,000 of value back then). It was the first reported ICO ever. By the way, MasterCoin is now called Omni.
Image source: Bitcoin Magazine
Although MasterCoin was the very first project, it wasn’t the most successful one. Let’s discover the first biggest ICOs that established the Initial Coin Offering market direction.
You most probably know about the Ethereum network. It is the second largest blockchain network now (in terms of volume). How did it grow so big?
The ICO, of course, was one of the kickstarters for Ethereum. Launched on July 20 and ended on September 2, 2014, it lasted for 42 days. Neither the amount of tokens nor the funding target was limited. Ethereum accepted investments only in BTC, and the initial exchange rate was 2000ETH/1 BTC.
Image source: Bitcoin Wiki
The success was too big to predict. The company sold 50,000,000 tokens worth more than $15,500,000. It was one of the highest crowdfunded projects the world had ever seen. The profit percentage of Ethereum is more than 64,000% now.
Neo (rebranded from AntShares in 2017) is a blockchain startup from China. Their scope is digital asset ownership. Neo launched its ICO in 2015. That year — in October — they managed to raise $550,000 by selling 17.5m tokens at $0.03 each.
Image source: Medium
In September 2016, Neo held a crowdsale again. This time they needed funds for further platform development. They sold 22.5m tokens for $4.5 million. Now Neo can boast of 50,000 percent rally since its very first ICO in 2015.
NXT had a much more mysterious Initial Coin Offering than the other networks mentioned. Starting his crowdsale in November 2013, BCNext — the anonymous developer of NXT — raised only around $17,000, and there was a reason for it. The general audience was completely unaware of the blockchain technology and hence wasn’t exceedingly supportive of it.
Image source: Bitcoin News
At the same time, NXT was one of the first ones and thus was able to occupy the niche of baas (blockchain-as-a-service) products. NXT has attracted a vast community of dedicated developers and issued 1 billion of tokens. Its ROI is now close to 400,000%, which is considered the biggest return on investment in the ICO history.
How ICO Changed over a Year
Those were super successful ICO projects. However, nowadays the reality is different. Over the past year, this IT-market has drastically changed. Different development approaches, different project requirements, different investor expectations. The year 2018 brought a new concept of the proper ICO. Let’s figure out how it affects the market these days.
Image source: BlockGeeks
Back in 2017, blockchain was a buzzword, a mainstream thing. Everyone wanted to become the founder of the next Bitcoin. And some people used it for their own benefit.
You see, investors were not experienced enough to understand what a decent ICO project was. A bunch of teenagers could post a few words on the Web and receive enormous funding. The same approach isn’t going to work now.
Image source: BlockChainDesk
An ICO team in 2018 needs to be a truly dedicated group of developers with a progressive goal. They get investor attention only if they genuinely strive for a technological breakthrough. Consistency, comprehensive approach and proven potential are becoming mandatory for teams that want to keep their heads above the water.
ICO Project Assets
What did a blockchain developer need to win investors’ trust in 2017? A whitepaper with some promising lines about the revolutionary coin and a couple of images were enough. If they presented a logo, investors were sold. A paradise for lazy and careless developers, wasn’t it?
Image source: Blokt
The world is different now. Over a single year the project assets required by investors grew tremendously. This is what a decent blockchain network must provide to at least get a chance to run a successful ICO:
- Landing page. No company will get a single cent without a serious website covering all the aspects of the actual product.
- MVP. Minimum Viable Product is a modern way to demonstrate the high potential of agile projects. As you may have guessed, investors will hardly invest in blockchain products without an MVP.
- Constant brand website updates. How can investors know whether you are consistent and dedicated? They monitor your website activity. Regular blog posts, social network activity, even Youtube videos — modern ICO team needs to put all this content on the web to assure investors of their motivation.
Once again, ICO used to be a buzzword. With that being said, it was just big. Anyone who had a buck or two would invest in some network just because it was “a huge opportunity”. At least, big influencers said so.
Image source: Bitcoin News
It created a certain level of dishonesty. More and more influencers were nicely paid for every sponsored post or video. Unfortunately, as the technology was new, many investors trusted it because of the lack of information.
Nowadays the market is significantly more mature. People can spot paid promotion a mile away and will try to avoid any contact with its sponsor. ICO teams need to find ways to promote their product organically. The web community has experience with ICO scams. It’s made them 10 times more careful with their investments.
Blockchain enthusiasts were the core of 2017 community. Countless projects, sky-high motivation, infinite expectations, and keen discourse. “It’s a new era, it’s a revolution” — this was the motto of the community attitude in 2017. The things have changed since then, and we can’t call them univocal.
Image source: Crypto Compare
Unfortunately, a skeptic sentiment is getting more prominent. Full of worries after the failed investments, people trust new projects less. Disappear from radars for a single day during the ICO stage — and you’ll get a million accusations of scam.
At the same, it has a bright side as well. The overly careful community leaves no chances for scammers to enter the stage. People need information, people need proof. It means that only the most responsible and dedicated teams will make it to the end. It’s a natural filter build on community experience, and it works quite effectively.
The Bottom Line
The ICO market has changed a lot. In some sense, it matured. More professional teams, more strict project requirements, more careful community — all these aspects of the current situation are a sign of a strong market position. Of course, there are some market drops, but those are drops in terms of quantity, not quality.
The changes the ICO market has undergone are positive. After all, it’s not a playground for the inconsistent and profit-first players. It’s a global scope of the IT-world, and it will keep making more and more impact on the data revolution over time.