ICO results: September 2017—September 2018

ICO results: September 2017—September 2018

According to ICORating data, during the period from September 2017 until September 2018 1,002 ICO projects have taken place which has raised substantial USD 17.2 billion during their ICOs in total

Out of these, 545 ICOs which have total funding raised in the amount of USD 3.7 billion are not traded on exchanges as of October 5, 2018.

52 projects with total funding raised in the amount of USD 1.3 billion are currently traded in exchanges but do not have data on capitalization on publicly available sources like Coinmarketcap.

Remaining 405 projects which have raised funding in the total amount of USD 12.2 billion are currently traded on exchanges and have total market capitalization in the amount of USD 12.1 billion, or 1% lower than the funds raised. We will look into some notable projects to see what happened to their valuation after listing on exchanges and we will try to find reasons for the respective change in valuation.

However, sometimes it is difficult to distinguish the real reasons behind the decrease in valuation due to the overall market downtrend in January-September 2018.

Notable projects

EOS

  • Investment rating — not assigned
  • Hype score — High
  • Risk score — Medium

The largest project in terms of funds raised during the period under analysis (USD 4.2 billion), EOS is very hard to analyze due to the fact that the ICO was ongoing for almost a year and the token was traded on exchanges at that time, as well. So investors gains or losses highly depend on the exact date when the investment was made. Apart from that, EOS had some problems with the launch of their mainnet in June 2018, reasonable criticism regarding decentralization when having a small number of nodes (21) and doubts regarding the need for such huge funding.

Nevertheless, EOS’s current market cap is 18,4% higher than the total funds raised, which is not that bad in a bearish market.

Envion

  • Investment rating — not assigned
  • Hype score — High
  • Risk score — High

Envion raised substantial USD 100 million during the ICO promising to deliver mobile mining units. Questions regarding the feasibility of and need for such solution, e.g. the drawbacks associated with closed contour within the container and usage of water cooling in closed contour. There were also reasonable concerns regarding promises made by the company regarding future gains from mining (no one can predict mining profitability even in short-term. But at the date of ICO (mid-January 2018) the hype around ICOs and altcoins was so high that these criticisms were ignored. In addition to that, a scandal broke out when the CEO of Envion covertly issued more shares in Envion AG and left the founders with almost no funds and right. Later this article from Handelsblatt proven that the concerns were right.

Project’s capitalization dropped by 95.8% since the ICO date.

Savedroid

  • Investment rating — not rated
  • Hype score — High
  • Risk score — High

Savedroid promised to build AI-based ecosystem for cryptocurrency investing and saving, and raised USD 50 million during its ICO in February-March 2018. Despite the questionable idea (AI works not so well yet even in traditional markets) and several potential scam indicators like promises to be listed on HitBTC, the community ignored these indicators. Moreover, Savedroid made a very questionable move in April 2018 — exit scam which later was explained as a 'marketing campaign to show how easy it is to scam people' by Savedroid.

All of the above resulted in substantial capitalization drop 95.3% as compared to the funds raised.

Zilliqa

  • Investment rating — Positive (Post-ICO)
  • Hype score — High
  • Risk score — Medium

Zilliqa raised USD 22 million during its ICO which ended in the beginning of January 2018 — not as much as the previous projects in our list, however the team managed to deliver results so far, having released public testnet and reaching 2,5k TPS on it. In addition to that, Zilliqa has a decent team, which is solving a significant problem (scalability of blockchain) with a promising technology (sharding).

All of the above resulted in Zilliqa being valued 1093% higher than as at the ICO date.

BLOCKv

  • Investment rating — Positive
  • Hype score — High
  • Risk score — Low

BLOCKv raised modest USD 1.9 million in the ICO during October 2017. It is now valued 1013% higher than at the date of ICO. Such increase is caused by several factors — relatively unlucky ICO period (October 2017), insufficient marketing before the ICO and plenty of other highly hyped projects like Wanchain which took place at the same time. Nevertheless, the team was able to develop an interesting idea and later partner with Russia’s largest mobile operator Megafon in order to demonstrate its working technology in a live concert.

Conclusion

Current market capitalization of an ICO project as compared to its raised funds during ICO is supposed to demonstrate the success or a failure of a given project. However, while it is true in majority of the cases, that is not always the case due to immaturity of the market. The simplest illustration of that is that the projects which are currently valued more than 90% lower than their funding may have actually delivered returns to their investors due to high hype and uptrend of winter 2017/2018, regardless of the actual results of the project. On the other hand, a project with promising tech, good team and ongoing development may have not delivered any gains to investors due to excessive hype, bearish market or lack of proper marketing.

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