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ICO Analysis for August 2018: “Plateau of Maturity”

This month brings some fresh air to the ICO market. The key findings for this month are presented below.

In all our ICO reports, we use the same success criteria.

Please have a look at our previous reports in our blog.

The Number of ICOs is Falling Significantly

This report covers 73 ICOs completed in August, 2018 (pre-ICOs are not included). However, we analyzed the ICOs based on different phases. The results are calculated separately for each phase.

The number of ICOs has continued to fall since December, 2017.

Number of ICOs per month.
Diagram 1. Number of ICOs per month.

Almost 80% of ICOs Failed

The distribution of projects by status.
Diagram 2. The distribution of projects by status.

August, 2018 was one of the least positive months for ICO success. You can see the dynamics below.

The dynamics of ICO success in raising funds.
Diagram 3. The dynamics of ICO success in raising funds.

Some projects are considered unsuccessful due to their enormously high hard caps, which they are unable to cover. However, they may have enough money to deliver good products.

The Market Volume Stays Stable

Raised by Total Funds Median Funds
All projects $503M $6.0M
Successful projects $367M $19.8M
Unsuccessful projects $136M $1.3M
Raised in crypto (ETH) ETH 1.6M ETH 0.021 M

Table 1. Funds raised (if stated)

The dynamics of the funds raised.
Diagram 4. The dynamics of the funds raised.

The amount of funds stays stable with the decreasing number of ICOs

The dynamics of the total funds raised compared with the number of ICOs.
Diagram 5. The dynamics of the total funds raised compared with the number of ICOs.

Successful ICOs, which are only 20% of all ICOs, collected 80% of the total funds this month. We can indicate the perfect Pareto principle in play.

The total funds raised by successful and unsuccessful ICOs, in millions of USD.
Diagram 6. The total funds raised by successful and unsuccessful ICOs, in millions of USD.

$136M was raised by unsuccessful ICOs according to our success criteria. While part of this amount may actually go to development, the greater portion sinks into oblivion in private offshores.

The Amount of Funds Raised in Crypto Increased by 45%

The total amount of crypto raised, in millions of ETH.
Diagram 7. The total amount of crypto raised, in millions of ETH.

If we convert these funds to the current price of ETH ($232 as of August 5), we can see a significant growth, despite the falling ETH price.

Total funds raised in fiat and crypto.
Diagram 8. Total funds raised in fiat and crypto.

The ETH price has dropped by more than 30% during this month, but it hasn’t stopped ICO investors.

The Median Amount of Funds Raised Increased by 58%

This indicator was quite volatile for the last couple of months.

The median funds raised compared with the total funds, in millions of USD.
Diagram 9. The median funds raised compared with the total funds, in millions of USD.

If we look at medians depending on the ICO success, we see it’s mostly driven by a small number of very successful projects.

Median funds raised, in millions of USD.
Diagram 10. Median funds raised, in millions of USD.

The greater difference between successful and unsuccessful ICOs gives us a hint of the market maturing.

The Top 10 ICOs Accounted for 80% of the Total Funds Raised

The Top 10 ICOs compared to the rest.
Diagram 11. The Top 10 ICOs compared to the rest.

This trend is increasing with a significant boost this month.

The percentage of funds raised by the Top 10 ICOs
Diagram 12. The percentage of funds raised by the Top 10 ICOs

The largest ICO this month is Hedera Hashgraph, the blockchain platform based on an asynchronous Byzantine-Fault Tolerance (aBFT) consensus algorithm with a security token. They have concluded their longlasting private sale with an accredited public sale ended this month.

Total funds raised by the top 10 ICOs, in millions of USD.
Diagram 13. Total funds raised by the top 10 ICOs, in millions of USD.

There are Several Non-ICO Investments Accounting for Almost Half of the ICO Market

TZero, Overstock’s blockchain subsidiary, was invested by $260M, $160M of which were distributed in tZERO Security Tokens. Dfinity completed the private presale for $102M. Icash $30M raised $30M in private sale, ICO to be announced. There are several more similar cases.

All these projects are not selling tokens publicly. A lot of ICO agencies includes these projects in their data; however, it’s misleading, as these projects are not collecting crypto nor issuing tokens for such amounts. We are following their development and will include them in our reports if they complete an actual ICO round.

There Are Very Few Successful Low-Capped Fundraisers

This month, 25% of all ICOs were hard-capped at under $10M. However, only 10% of them were successful.

Distribution of ICOs by funds raised (from the 35 that stated their results).
Diagram 14. Distribution of ICOs by funds raised (from the 35 that stated their results).
The distribution of successful and unsuccessful projects by funds raised, in millions of USD.
Diagram 15. The distribution of successful and unsuccessful projects by funds raised, in millions of USD.
The distribution of projects by funds raised, as a percentage of the target or hard cap.
Diagram 16. The distribution of projects by funds raised, as a percentage of the target or hard cap.

Only 9 ICOs raised 90+% of their hard caps, collecting $180M altogether.

More Than Half of All ICOs Didn’t Provide Results Following the Sale

The dynamics of ICOs with no financial information.
Diagram 17. The dynamics of ICOs with no financial information.

This suggests most of these ICOs are almost certainly dead or very poorly funded.

Each Month There Are Fewer ICOs Concluding Within a Few Days

We still have a long tale of long-lasting ICOs trailing for several months.

The distribution of ICO quantity by duration.
Diagram 18. The distribution of ICO quantity by duration.
The distribution of funds raised by ICO duration, in millions of USD.
Diagram 19. The distribution of funds raised by ICO duration, in millions of USD.

Only 11% of ICOs opened and closed within this month. However they collected more than $150M which is around 30% of the market.

Key Findings

  • The overall amount of funds raised was $503M, which is almost the same as in July.
  • The total amount of crypto raised was ETH 1.6M, an increase of 45%.
  • The total number of ICOs was 73, 30% less than in the previous month.
  • This month, there were only 10 pre-ICOs, which raised around $100M. The biggest pre-ICO was Dfinity, collecting $102M.
  • Only 21% of ICOs were successful, the same as in July.
  • The median funds collected by all projects comprised $6.0M, an increase of 63%.
  • The top 10 projects collected 80% of all funds.
  • 52% of ICOs did not report the amount of capital raised.
  • 88% of ICOs launched on Ethereum.
  • The blockchain platform was the most popular sector among blockchain projects. For the first time, it’s overlapped in the Finance category by the number of projects and the total funds raised.

Conclusions

The main breakthrough for this month is the 45% rise in the amount of crypto spent on ICOs. This comes with a 30% drop in the number of ICOs giving us clear signs of the market maturing with great big projects popping up. Every month, there are less and less obvious scams entering the market.

The ICO is, of course, still an actual way of raising funds for blockchain projects. There are many experiments in the area regarding ICO procedures and legal interpretations. Some great projects are going around the actual ICO funding rounds and distributing token in other ways. We will try to investigate these cases more closely and present it in a separate report.

We see ICOs slowly merging with other forms of investment to create some hybrid mechanisms. The potential of blockchain technology is no longer subject to doubt and every month we see new influential players entering the market.

Suicide.Ventures will continue to provide ICO analyses on a monthly basis.