How Yggdrash Smashed Their $40m Hard Cap in a Bear Market

In early 2018, I worked closely with the Yggdrash core team throughout their ICO to help secure investment for the private sale round. The Yggdrash ICO was in March 2018, which some have characterized as the worst bear market in cryptocurrency history, having hit an ATH (all time high) exceeding 800 billion at the time.

If the market was in an uptrend (bull market), the ICO surely would have been much easier. However, the Yggdrash ICO hit the hard cap of pre-ICO within 20 hours; a remarkable feet given the conditions. Specifically, Yggdrash raised $22mm in their Private Sale round and $18mm in their Pre Sale round, which caused them to cancel their Crowd Sale round, since they met their hard cap prior to the crowd sale. A surprising fact is that to give more opportunities to broader communities and participants, the Yggdrash team lowered the ETH max cap of each participant from 50 ETH to 10 ETH a few days before launching the pre-sale round, which resulted in more than 7,000 participants from 128 countries.

Given the market conditions, there were definitely moments during the Yggdrash ICO when I was not sure how the ICO would end up. However, the Yggdrash team did an absolutely incredible job of getting the world’s attention. There was a whirlwind of energy surrounding the Yggdrash project.

CLEVER BRAND NAME — It started for many with the controversial brand name. Yggdrash? How do you pronounce it? What does it mean? Some loved the name and some did not. Regardless, the controversy worked and got everyone talking about the project. For those curious, Yggdrash is a mash-up of Yggdrasil and Hash. Yggdrasil is a gigantic tree that connects the nine worlds of Norse mythology, and Ash — the tree itself, is presumed by scholars to have been an ash tree, and ASH is derived from HASH. They marketed that Yggdrash is “an immense mythical tree that connects wells of the world and locations from the underground and to the heaven; and the hash for blockchain transaction and network”.

Yggdrasil — an Ash Tree

VISIONARY WHITE PAPER — The Yggdrash team analyzed the market and sought to tackle the most significant issues prevalent with current blockchain projects. They focused on solving sync speed, incentives, and scalability. They fundamentally aimed to position Yggdrash to be able to “apply blockchain technology to 4th Industries, such as IoT and Big-Data analysis”. The technology itself fit the profile many investors were looking for in a project. A next generation blockchain platform. In their own words, “YGGDRASH is a trust-based, multi-dimensional blockchain ecosystem”, wherein each branch is governed by reputation to ensure integrity. What sets Yggdrash from their competitors is a Zero Network fee reputation score system and a DPOA (Delegated Proof of Authority) Consensus system. YGGDRASH rewards user with higher reputation with Zero Fee or lower fees. Reputation score is measured on time and beneficial activities spent on the network, the higher the reputation the lower the fees.

To be clear, however, during the ICO in Q1 2018, Yggdrash was more of a powerful concept than an impressive MVP product, with test net due in Q3 2018 and mainnet Q3 2019. Therefore, it required a good amount of faith in the team, which they clearly achieved.

CHALLENGED 100X LEADER IN TRENDING REGION— Other key factors that I personally believe led to their success was the fact that Blockchain was heating up in Korea, where Yggdrash is from. ICON, also a blockchain platform, had hit their hard cap of $42m in September of 2017 and did a 100X ROI for early stage investors ($.11 per token to $12/token at ATH). This certainly helped paved the path for Yggdrash.

ALL-STAR TEAM — Establishing an “all-star” team was a core strategy from day one at Yggdrash. Starting with the founding team:

• David Seo, CEO: Former COO for CoinOne, one of the largest Crypto-exchanges in Korea and has strong Crypto-business experience in remittance (one of the largest Crypto-remittance in the world).
• Peter Ryu, CTO: Previously in charge of blockchain development at ICON.
• Ayden Kim, COO: Former Team Leader at Bithumb, one of the largest exchanges as well.
• Joon Seo, CFO: The youngest Korean CPA in 2005, has financial background as an auditor, M&A advisor, and industry experience in the strategy team at Hyundai Card/Capital, the Hyundai Motor’s financial subsidiaries.

With these core members, Yggdrash felt their core team “is able to build not only a practical blockchain network solution, but also business models using blockchain”. In addition to the founding team, Yggdrash worked hard to invest in their team by recruiting many members whom were from the blockchain industry since it’s first generation. It was interesting to learn that the core Yggdrash team feels that their investment on building a “strong team brought a network effect”, where serious talent began approaching Yggdrash with an interest in joining and this indeed “became one of our project strengths”.

COMMUNITY & MARKETING — When asked about their strategy surrounding building a strong community and hype on their project, the Yggdrash team stated “We were open to the community and, when it is necessary, our team members jumped into the communication on channels. We focused on the characteristic of our project which the decentralized platform empowers, participants, and this eventually led the community to be interested in our project and ICO”.

NO PAID ADS OR INFLUENCERS — While other projects were investing heavily in marketing, advertising, and incentivizing influencers to cover their project, the Yggdrash team states “We did not ask anyone to promote our project, yet many influencers, such as Youtubers, Crypto Analysts, and ICO Rating websites, became enthusiastic about our project and the solutions we suggested. Therefore, these project theme itself naturally led many others to cover our project.”

NO FORMAL PITCH PROCESS — Seeing as they hit their $40mm hard cap in their private/pre-sale rounds, I was most surprised to learn that the Yggdrash team did not even orchestrate a formal private sale process where they pitched 50 VCs. They stated, “We met a couple of VCs in person, most of them came to us through referrals, but it was not a serious process. Most of them were casual and they loved to get to know more about our project. We didn’t give extra discount on private ICO, but most of them were happy to become our partners.

SINCERITY WAS A FACTOR — When asked if any other factors led to success, Yggdrash stated, “Sincerity — it cannot be measured, but we felt it when we had the first meet-up after ICO. Many participants in other ICOs are only looking for the profit; however, those who support our project understand the reason why blockchain is necessary to do away with current centralized and intransparent structure of society. Our team is enthusiastic and passionate, and so is our community. This will eventually nurture our blockchain network environment.”

In closing, the Yggdrash team impressed me, as an entrepreneur, blockchain analyst, and investor, with a deep commitment to their vision. When I asked if they had anything else to share, they stated “We were innocent, passionate, and with integrity when we started and decided to go for ICO. There is nothing else more important than the team’s efforts and hard work to change the world.”

To summarize, the primary factors that led to success for Yggdrash were:

• VISIONARY WHITE PAPER
• CHALLENGE 100X LEADER
• ALL-STAR TEAM

Secondary factors that may have helped include:

• TRENDING REGION
• PRIVATE SALE INVESTOR SUPPORT
• SINCERITY & INTEGRITY
• CLEVER BRAND NAME
• AVG FOCUS ON COMMUNITY & MARKETING
• NO PAID ADS OR INFLUENCERS
• NO FORMAL PITCH PROCESS