IdeaFeX has attempted to raise funds through an ICO, and the results have been highly disappointing. In this short series, I give a postmortem for the ICO / cryptocurrency market. It is not a postmortem for IdeaFeX for a simple reason, and it follows in spirit the points I have made in the Make Blockchain Work series: these analyses highlight the fact that the future of crypto assets must be backed by real-world assets.
In Part 2, I take one step further into marketing of projects to audiences in blockchain space. My findings echo what others have written on Medium and how the overall market may progress / regress. This part also leads to the next two parts, which are forthcoming.
Selling tokens is no different than selling a product: When selling a product, you want to reach your potential customers and convince them that your product is the right one for them. The same happens with ICOs. Unless we are talking about semi-public money-laundering schemes (which has been my suspicion in regard to certain “private” sales, not least because possible money launderers have contacted me directly), some form of promotion is needed.
Bounty Campaigns & Airdrops
Arguably, bounty campaigns and airdrops have worked for some ICOs before. I can definitively say that they work against you now. All you will get is retweets or disinterested comments from empty accounts created just for this purpose. Apparently, for an increasing number of people this is their job.
What they fail to understand (and so did I) is that as their number increases the prospects of ICOs overall have been falling steadily. The incessant queries about when they will receive tokens on social media despite the fact that notices are repeatedly reposted, sometime right before they ask again, reduce the quality of the discussion considerably. Again, the worst place is Telegram.
Overall, while not bringing any new attention, these bounty hunters damage the image of the company and the project. Worse, some “bounty groups” or “airdrop channels” misrepresent the company and the project.
Incentives & Referrals
Incentives to join as a user and referrals for inviting a new user are common practices among online companies. I still think this may be transferable to blockchain / ICO, but there is a caveat:
If you give incentives without the need for purchase, you will again attract a large number of disinterested participants, now without accompanying “simulated interactions” on social media. On the other hand, if you give incentives with the need for purchase, such participants will ask why they are not getting their rewards incessantly.
There is a fundamental reason for this dilemma. It is the same thread that runs through this entire series.
These are articles that talk about the company or the project. We do not have any budget for these activities, but someone offered us a few free articles. The results are as expected: 0 link referrals.
This is to be expected because nowhere else in the world today is more impatient. People are all looking for the get-rich-quick tips. The last thing they do would be to read some articles (let alone white papers). As a digression, I recently had a look at the white papers of some of the most successful ICOs / IEOs: one says that those who purchase would get 6% of the tokens in total, while they keep 60%, that the tokens do not have much use right now, and that they will just use a well-known open-source protocol; they do not have a product now, and it is not clear what will be their product…
On the other hand, I can understand how these “press releases” may work: if you released some fake news, for example a certain big international company partners with you…
Most major online advertising channels have banned ICOs, for good reason: after telling the truth becomes useless, the only good marketing may well be to “make sh!t up”. A cynic may say, “this is how all marketing works”. S/he may be right. Then, perhaps it is us not wanting to buy fake followers or issue fake news that has led to the closure of our ICO.
I however should like to think that there are more fundamental reasons: I think the market has truly disappeared from beneath our feet, perhaps because “sh!ts” that are made up cannot hold for long and the public has grown immune to them.
IdeaFeX is the marketplace for tokenized real-world assets. We will launch a working product in 2019. For more details about us, we encourage you to follow us on Medium and read our Make Blockchain Work series as well as our White Paper.
This series is an extension to the original ICO series that I have written months ago.