The report provides data on the ICO market movements over 2018, with special emphasis placed on the analysis of trends of the second quarter of 2018.
Information as of July 2, 2018
This report was created by:
- Professor Dmitrii Kornilov, Doctor of Economics, Member of the Russian Academy of Natural Sciences, and Leading Analyst at ICOBox;
- Dima Zaitsev, PhD in Economics, Head of International Public Relations and Business Analytics Department Chief at ICOBox;
- Nick Evdokimov, Co-Founder of ICOBox;
- Mike Raitsyn, Vision Director of Snowfox Technology
- Anar Babaev, Co-Founder of ICOBox;
- Daria Generalova, Co-Founder of ICOBox
This report presents data on ICO market changes during 2018. Special emphasis has been placed on an analysis of the changes that took place in the second quarter of 2018.
1. General analysis of the ICO market (during the second quarter)
1.1. Brief overview of ICO market trends
The second quarter of 2018 was successful for ICOs. The total amount of funds collected exceeded $4.3 billion, and that is without counting the large EOS ICO that concluded on June 1, which was the unquestioned leader in funds collected. The Block.one project issued 900,000,000 EOS tokens. This blockchain project ultimately collected $4 billion, or 7.12 million ETH (The fundraising brought in 7.12 million in total ether as of Wednesday night, according to Token Report, a division of blockchain advisory firm New Alchemy). The distinguishing feature of this project is the lengthy period of performance of the ICO. The issue of tokens was performed over the course of a year, from June 26, 2017, to June 1, 2018. During its first five days the ICO sold 200,000,000 EOS tokens, with another 2,000,000 tokens subsequently being sold every 23 hours.
This project, which, like the two previous large projects TON and Petro, which were held in the first quarter of 2018, once again confirms the well-known Pareto Principle: 20% of efforts give 80% of results, and the other 80% of efforts give only 20% of results. The applicability of the principle to the performance of ICOs was considered in the article “ICO Success and Performance. The Pareto Principle [80/20 Rule].” The analysis discovered that the largest 345 ICOs accounted for $17.85 billion, or 90%, of all funds collected.
More than 600 ICOs were completed during the second quarter. The resource icodata.io alone shows 375 completed projects during April-June 2018. Another resource, icobench, shows more than 450 projects that are already scheduled to start after July 1, 2018.
There have been a variety of projects over the past quarter, for example:
- The project to create the stable cryptocurrency Basis collected $133 million.
- The US Securities and Exchange Commission (SEC) launched a fake ICO, to teach investors to recognize the typical warning signs of fraudulent campaigns.
- During its ICO, the TaTaTu project, which plans to issue films on blockchain and is basically an entertainment video platform, managed to collect the surprisingly large amount of $575 million (June 20, 2018).
- The public token sale of the DCC project (a decentralized ecosystem for providers of financial services around the world. Solves the problem of providing loans using blockchain) ended in 20 minutes.
- The QuarkChain Demand for project tokens during the ICO exceeded supply by several times. The ICO’s Hard Cap was set at only $20 million. In the end, after the completion of the ICO the token price grew by 10x to 18x (the ICO was completed on June 3, 2018).
- Metronome’s token sale was set up like an auction with a falling price (June 18-25, 2018). The developers plan to develop a cryptocurrency capable of being exported and imported between various blockchains.
- and many others.
A important event in the financing of blockchain technology that took place in China must be noted. The total financing of Qulian Technology (Fun Chain Technology) from the Shanghai-based finance company Xinhu Zhongbao will exceed 1.5 billion yuan (around $226 million). After the financing is completed, Fun Chain Technology will become the first “quasi-unicorn” enterprise in the blockchain industry. Fun Chain Technology is the leading international blockchain team behind the Hyperchain project.
The popularity of ICOs is growing despite the announcements of several publications that there are many fraudulent projects. The Wall Street Journal published research according to which nearly 19% of all ICOs are questionable. In addition, in the opinion of Valerie Szczepanik, an official of the US Securities and Exchange Commission, a number of ICOs issuing new cryptocurrencies are in fact concealed offers of securities, and this could pose a threat to investors.
Table 1.1. Brief ICO market overview, key events and news for Q2 2018
|№||Factors and events
(link to source)
|Date of news||Description||Type of impact|
|1.||Sales of Petro Have Reached More Than $5 Billion [source: Elpetro.gob.ve]||April 27, 2018||Sales of Petro reached more than $5 billion, which is equivalent to more than $4 billion euros or more than 31 billion yuan. “This crypto asset, backed by the Venezuelan government, confirms our economic sovereignty,” announced Nicolas Maduro, the President of Venezuela.||Favorable
|2.||South Korea Aims at ICO Legalization [source: Investorideas]||May 3, 2018||A group of South Korean parliamentarians are working on a draft law to legalize new ICOs, provided that the token issuers comply with the strict restrictions imposed by the government.||Favorable
|3.||Cointelegraph]||May 22, 2018||By working together, the regulators discovered around 70 scam ICOs. It is reported that the planned frauds used fake addresses, eye-catching marketing materials, and guarantees of up to 4 percent daily interest rates, without warning of potential risks of crypto funding.||Uncertain
|4.||Bitcoin and Ether Are Not Securities, But Some Initial Coin Offerings May Be, SEC Official Says [source: CNBC]||June 14, 2018||According to William Hinman, the Head of the Division of Corporate Finance at the SEC, Ethereum cannot be regulated like shares and bonds due to the decentralized system underlying the cryptocurrency. The Ethereum price is increasing on the back of this news.||Favorable
|5.||Chain Accelerator Opens Its Doors to Blockchain, Crypto Startups in France [source: Bitcoinmagazine]||June 19, 2018||A Chain Accelerator, a project for integration and development of blockchain, has been launched in France. French financiers believe that the blockchain incubator will help attract startups to France and make Paris the ICO capital of the world.||Favorable
Table 1.2 shows the development trends on the ICO market since 2017. Only popular and/or successfully completed ICOs (i.e. ICOs which managed to collect the minimum declared amount of funds) and/or ICOs listed on exchanges were considered.
Table 1.2. Aggregated trends and performance indicators of past (completed) ICOs1,2,3,4
|Total amount of funds collected, USD million||6 890.1||1 665||2 679||7 149||1 064||1 747||1 499|
|Number of companies that completed an ICO1||514||94||90||79||104||118||79|
|Maximum collected, USD million (ICO name)||258
|100 (Envion)||850 (Pre-ICO-1 TON)||5000 (Petro Pre-Sale)
|133 (Basis (previously Basecoin))||72 (Flashmoni)& 118 (Orbs)
|Average collected funds, USD million||13.4||17.7||29.8||90.5||10.2||14.8||19.0|
1 Data source: tokendata.io, icodrops.com, icodata.io, coinschedule.com, cryptocompare.com, smithandcrown.com. For some ICOs information may currently be incomplete (for instance, the amount of funds collected). ICOs that collected less than $100,000 were not considered.
2 Date when data was updated – July 2, 2018
3 Not including EOS, which collected $4 billion or 7.12 million ETH over the year from June 26, 2017, to June 1, 2018.
4 Including the TON Pre-ICO-1,2 ($1.7 billion) and the Petro ICO ($5 billion). According to the data from the official website of the Petro ICO, Petro sales equaled more than $5 billion, which is equivalent to more than $4 billion euros or $31 billion yuan (http://www.elpetro.gob.ve/#about). However, the data on the amount collected by El Petro from some other sources differ. For example, according to criptomoedasfacil.com, the amount of funds collected cannot exceed $2.3 billion taking into account discounts, the project White Paper indicates $4.387 billion, and other sources mention the $3 billion stated, among others, by the President of Venezuela Nicolas Maduro.
The data for the previous period were adjusted to account for the appearance of more complete information on past ICOs. The amount of funds collected via ICOs during the past month (June) equaled $1.5 billion (not including EOS). This amount consists of the results of 79 successfully completed ICOs, with the largest amount of funds collected equaling $575 million (TaTaTu ICO). The average amount of funds collected per project equaled $19 million (see Tables 1.2, 1.3). Overall, more than 150 ICOs were completed last month, but information on the amount of funds collected is not available for all of them.
Table 1.3. Amount of funds collected and number of ICOs
|Number of ICOs*||Average collected,
|Total, 2017||6 890.1||514||13.4|
|January 2018||1 665||94||18|
|February 2018||2 679||90||29.8|
|March 2018||7 149||79||90.5|
|April 2018||1 064||104||10.2|
|May 2018||1 747||118||14.8|
|June 2018||1 499||79||19.0|
|Total for 2018***||15 804||564||28.0|
* Data source: tokendata.io, icodrops.com, icodata.io, coinschedule.com, cryptocompare.com, smithandcrown.com.
Information on funds collected is not available for all ICOs (information for last week is tentative and may be adjusted). ICOs that collected less than $100,000 were not considered.
** More than 1,000 ICOs were performed in 2017. However, the data for the 514 largest and most popular ICOs, the data of which can be processed, were considered when calculating the total amount of funds collected during 2017.
*** Including the TON Pre-ICO-1,2 ($1.7 billion) and the Petro ICO ($5 billion). According to the data from the official website of the Petro ICO, Petro sales equaled more than $5 billion, which is equivalent to more than $4 billion euros or $31 billion yuan (http://www.elpetro.gob.ve/#about). However, the data on the amount collected by El Petro from some other sources differ. For example, according to criptomoedasfacil.com, the amount of funds collected cannot exceed $2.3 billion taking into account discounts, the project White Paper indicates $4.387 billion, and other sources mention the $3 billion stated, among others, by the President of Venezuela Nicolas Maduro.
**** Not including EOS, which collected $4 billion or 7.12 million ETH over the year from June 26, 2017, to June 1, 2018.
***** The data for 2018 have been updated (date updated: July 1, 2018).
Table 1.3 shows that the largest amount of funds was collected via ICOs in March 2018, mainly due to the appearance of major ICOs. The highest average collected funds per ICO was also seen in March 2018.
In total, more than $15.8 billion were collected via ICOs in the first half of 2018 (and that is without the funds of EOS, an ICO that lasted for an entire year). This amount was collected by a total of only 564 projects.
Figure 1.1. Trends in funds collected and number of ICOs since the start of 2017
1.2 Top ICOs during Q2 2018
Table 1.4. Top 20 ICOs by the amount of funds collected during Q2 2018
|#||Name of ICO||Category||Collected, $ million||Completed|
|1||EOS||Infrastructure||4000||June 1, 2018|
|2||TaTaTu||Events & Entertainment||575||June 20, 2018|
|3||Orbs (ORBIS)||Infrastructure||118||May 15, 2018|
|4||Flashmoni||Commodities||72||May 10, 2018|
|5||Gold Bits Coin||Trading & Investing||50||May 25, 2018|
|6||VideoCoin||Events & Entertainment||50||May 16, 2018|
|7||DCC||Finance||49||May 29, 2018|
|8||HybridBlock||Trading & Investing||47.8||June 6, 2018|
|9||Dorado||Supply & Logistics||44.4||May 16, 2018|
|10||GoNetwork||Infrastructure||42.3||June 17, 2018|
|11||PATRON||Social Network||40||May 10, 2018|
|12||FANTOM||Infrastructure||39.6||June 22, 2018|
|13||Plutocoin||Payments||38.9||May 29, 2018|
|14||RedBux||Events & Entertainment||38.5||May 21, 2018|
|15||Coal Industry Coin||Commodities||37.2||June 25, 2018|
|16||MoneyToken||Finance||37.2||June 7, 2018|
|17||Cardstack||Infrastructure||35||June 1, 2018|
|18||SHIVOM||Drugs & Healthcare||35||May 3, 2018|
|19||Solve.Care||Drugs & Healthcare||35||May 1, 2018|
|20||Invacio||Finance||35||May 14, 2018|
|Total, top 20||5 420|
* The category was established based on expert opinions.
** When compiling the lists of top ICOs, information from the websites tokendata.io, coinschedule.com and other specialized sources is used.
Table 1.4 shows the top 20 largest ICOs by funds collected, most of which belong to the categories Infrastructure, Events & Entertainment, Finance, and Commodities.
Figure 1.2. Top 20 ICOs by the amount of funds collected during Q2 2018
During the second quarter of 2018 more than $4.3 billion were collected (not including the largest ICO, EOS, which was completed on June 1). However, due to the overall fall in capitalization of the cryptocurrency market, a gradual adjustment in ICOs is being seen. This delayed reaction is leading to a steady fall in the hard cap requirements of projects, with the effectiveness of fund collection also beginning to drop. To be sure, the effectiveness of ICOs depends on many factors, including a growth in cryptocurrency market capitalization.
Annex – Glossary
|Initial coin offering, ICO||A form of collective support of innovative technological projects, a type of presale and attracting of new backers through initial coin offerings (token sales) to future holders in the form of blockchain-based cryptocurrencies and digital assets.|
|Token sale price
Current token price
|Token sale price during the ICO.
Current token price.
|Token reward||Token performance (current token price ÷ token sale price during the ICO), i.e. the reward per $1 spent on buying tokens.|
|Token return||(see token reward) Performance of funds spent on buying tokens or the ratio of the current token price to the token sale price, i.e. performance of $1 spent on buying tokens during the token sale, if listed on an exchange for USD.|
|ETH reward – current dollar value of $1 spent on buying tokens during the token sale||Alternative performance indicator of funds spent on buying tokens during the ICO or the ratio of the current ETH price to its price at the start of the token sale, i.e. if instead of buying tokens $1 was spent on buying ETH at its rate at the start of the token sale and then it was sold at the current ETH price.|
|BTC reward– current dollar value of $1 spent on buying tokens during the token sale||Similar to the above: Alternative performance indicator of funds spent on buying tokens during the token sale, i.e. if instead of buying tokens $1 was spent on buying BTC at its price at the start of the token sale and then it was sold at the current BTC price.|
|Token/ETH reward||This ratio describes a market participant’s economic benefits and disadvantages resulting from buying tokens during the token sale relative to buying ETH. If the result is over 1, the market participant spent his funds more efficiently on buying tokens than if he were to have spent his funds on ETH.|
|Token/BTC reward||This ratio describes the market participant’s economic benefits and disadvantages resulting from buying tokens during the token sale relative to buying BTC. If the result is over 1, the market participant spent his funds more efficiently on buying tokens than if he were to have spent his funds on BTC.|
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