Ikenna Uwakwe has been a writer since he could hold a pen. Having a lot of literary works in his portfolio including Poems, Articles and Essays. He enjoys a natural likeness for anything related to technology. His Educational background includes computer science and programming. As a seasoned cryptocurrency enthusiast with a professional writing career path of over two years of blogging for blockchain related companies. Working with various Fintech startups in the past, has aided him to better understand what IT proponents as well as financial Investors look out for.
Though only half of the projects that participated in IEO in 2019 were profitable, the research indicates that the cumulative returns to be garnered over the span of 6 months could amount to 44% ROI.
CoinGecko, the coin market ranking chart app, has recently released its crypto market study. In this report, it is declared that Initial Exchange Offering (IEO) has steadily been on the rise with over 72 startup projects raised a total of $262 million within Q2 2019. The start of this IEO craze been is strongly related to Binance. The number one crypto exchange started its launchpad in January 2019 raising $7.2 million in just 14 minutes for the BitTorrent project.
In this research published by CoinGecko, it was pointed out that 50% of these IEO funds have been generated from the top tier cryptocurrency exchange platforms the list of which includes Gate.io ($47.6 million), Binance ($27.2 million), Okex ($24.3 million), Huobi ($22.7 million) and Bittrex ($16.9 million).
With regards to these exchanges’ return on investment (ROI) on IEOs amongst these exchange platforms, ZGB happens to take the lead with an approximate of 820% ROI from its launch date to present. Next in line is the ZB project with 553%, Binance with 513%, Gate.io with 505% and Hotbit with 320% consecutively. Nevertheless, the top two exchanges (ZGB and ZB) in terms of ROI launched only one project each. Such a situation allows considering Binance and Gate.io to be the top crypto exchanges renowned for high ROI when it comes to IEOs.
And despite the high ROI generated from these exchanges, the average ROI of certain crypto trading platforms that participated in IEOs runs into the negative. Such exchanges as BitForex, that has had the most number of IEO launching, falls under this category with an average return on all IEOs on the exchange ranging to -37%.
The $20 Million Ceiling
While the average amount realized from these Initial Exchange Offerings during the first quarter of 2019 was $3.7 million, the report states that the sums varied significantly from project to project. After an extensive research was conducted, CoinGecko came to the conclusion that the average hardcap for IEO projects fell under the ceiling of $20 million.
Taking into consideration projects with the largest hardcaps generated, WaykiChain tops the chart with $18.5 million. This project is followed by Lambda, Poata Token, Blockcloud and Too Network with a total hardcap realization of $16.4 million, $15.4 million, $15 million and $15 million respectively. It turns out that the aforementioned projects are the only projects to surmount the $10 million benchmark for IEOs. They represent 31% of the amount raised in the first half of 2019. The report further states that:
“IEO projects seem to have a ceiling of $20 million in amount raised.”
IEO Projects launched in 2019
The CoinGecko publication indicates that the total amount raised in IEOs is partly dependent on the feasibility of the projects in participation and partly on the exchanges on which the token sales would be hosted.
On this note, the top two gainers in terms of projects happened to be launched on Gate.io. They are Lambda with 1,874% ROI and Mixmarvel with 1,249% ROI. Lichang which was launched on Hotbit had a 1,138% ROI. Next in line are BitTorrent launched on Binance with 1,068% ROI and ZBG Global Trading System with 820% ROI.
Let us also mention that there exist some tokens associated with IEO projects such as Facepower and Aivia the value of which has dropped by over 90% since the inception of their token generation event (T.G.E).