The State Of Token Offerings In 2019
Token offerings burst into the spotlight in 2017, when Initial Coin Offerings (ICOs) gained immense popularity among aspiring technology entrepreneurs. ICOs were a great alternative to traditional fundraising methods, not just for token issuers but also for investors as well.
On the investors’ end — ICOs enabled them to back early-stage tech startups that could become the next Uber or Tesla, for token issuers — ICOs enabled them to raise funds without incurring significant costs while also being more convenient and less time-consuming.
But the mass-adoption of ICOs also exposed their downsides — including numerous exit scams where investors were left in the dust with very few ways to get compensated.
Blockchain and crypto report: H1 2019
Following the numerous setbacks faced — from being considered as a security offering to the numerous ICO exit scams, the number of ICOs took a severe hit with just 403 being launched during H1 2019. In H1 2018, ICO projects formed over 95% of the total number of token offerings but only formed 70% of the projects during H1 2019. Clearly, ICOs have lost significant popularity as a fundraising tool.
While ICOs have declined, IEOs and STOs have observed an uptick.
While the funds raised by ICO projects have declined by over 90% over the year, IEO and STO projects have witnessed significant growth. IEOs raised more than 5000% more funds during H1 2019 when compared to the previous year at an eye-watering $1.62 billion. While STOs raised 51% more funds when compared to H1 2018 at a whopping $419 million.
The facts are now as clear as day, ICOs while being a lucrative way to raise funds as declined in popularity significantly. Now, newer fundraising models like IEOs and STOs are taking its place. As with any nascent market, its changes like these that help the market mature and flourish.