It’s all gone tokens. Blockchain startups: one year evolution.
Originally published as part of icobench.com industry review as my expert take.
It is fascinating to share the opinion based on tracking the evolution of market and quality of projects itself through the prism of the projects design, token economy, as well as the depth of team preparation for building something related to the integration of digital assets into the business model.
Digital wild west
In summer 2017 almost nobody cared about the token economy.
Only a few teams conducted an extensive research on this point and created a strong token economy model for their projects. Majority of «mass market» ICOs had a «token will work everywhere in our system» approach to token design that looked more like «we don’t know how it works, first we collect money and then we will decide what to do». Majority of project creators were thinking mainly about the fundraising process and not the future project execution. At that time industry was very young, and lack of experience predictably resulted in many dead projects. This situation had occurred due to a high level of hype around industry and completely irrational optimism, which always accompanies market bubbles.
Better late than never
But when crypto-hype had went down, the amount of investors’ funds, which
the projects were able to raise, significantly decreased. It was associated with a number of reasons, including an advertising ban on Facebook and other traffic sources, fainting optimism of investors and increased regulatory pressure. Crypto funds, investment companies and individual investors with significant average investment amount had to adopt a much more serious approach to the start-up selection process. Now it is not enough to buy traffic, present a good idea in a pretty written whitepaper and take influential advisors from crypto industry on board.
Smart money is exploring project code, token economy, financial models and other things related to detailed examination of the project. Working MVP is the compelling point to attract attention. The excellent legal structure is necessary.
It’s not about hype anymore, but about quality and professionalism of teams and fundraising advisors.
If there is a will, there is a way
Today many investment funds have public blogs, where they are studying token economy and postindustrial business models on an almost academic level. Many guys and pros from the community do their serious research in different fields of crypto and then publish it. Venture companies are looking at ICO’s and STO’s investments now and share the experience of startups and token valuation with the audience. Having observed this change, now I have substantial evidence that confirms the following point: it is time for quality. The industry is maturing, and it is an excellent thing to happen. I hope that soon we will see the crypto-fundraising world being divided on STO and ICO, or maybe the appearance of combined fundraising models which would suit different investor types. Hype might return, but I think all industry will be on a significantly higher level of development at that moment.
Work, work, work — it is best advice for any upcoming startup. Don’t hype. Work!
