There is a sense of hysteria around ICO’s these days. Hundreds of projects are being launched and sold off each month. It’s becoming increasingly difficult to gauge the economic climate. Which ICO’s are succeeding? How are the funds being distributed? What’s around the corner for ICO’s?
Suicide Ventures will be posting a monthly report to answer these questions.
In this first installment, we will be focusing on the financial results of 99 ICO’s in September of 2017. Our key metrics will be “hard cap,” “soft cap” and the standardized figure of $1M USD to analyze the success or failure of a project. To be clear: hard cap is the maximum amount crowdsales wish to receive vs. soft cap which is the minimal amount required by a project.
Presales/pre-ICO’s are not included in this research. We evaluate only main crowdsale campaigns completed in September 2017.
A financial snapshot of ICO performance
We created this criteria to analyze ICO’s effectively:
An ICO is considered to be a success if all these conditions are met:
- Soft cap (if stated) is reached.
- More than $1M or more than 10% of the hard cap is collected.
An ICO is considered to be a failure if at least one of these conditions is met:
- Soft cap (if stated) not reached.
- Less than $1M collected.
- Less than 10% of hard cap collected.
- No information on the project status is available and/or official website and/or official Bitcointalk thread is deleted or cleared.
Diagram 1. Distribution of projects by status [Failure or Success].
According to our criteria, almost 60% of ICO’s completed in September 2017 failed. It should be mentioned that according to our experts’ estimations almost half of these ICO’s were scams. This estimation is based on an analysis of the projects websites, whitepapers, and Bitcointalk threads. It is possible that a small amount of these projects were poorly packaged and failed to be promoted.
What about the market size?
Let’s also estimate what is going on in the market regarding funds raised.
|Total funds raised by successful projects||$838M|
|Funds raised by each successful project on average||$20M|
Table 1. Funds raised, USD
The total funds raised in September 2017 is $838M, a sharp increase from $540M in July 2017
When looking at the average prices of funds raised by ICO’s it’s important to consider outliers like Filecoin ($200M) and Kin ($97M, ICO of Kik messenger with 300 million users). These high-earning ICO’s slightly skew the average, but it’s clear that the industry is booming.
Now let’s dive deeper into the financial performance projects. The following pie graphs categorize the projects by total earnings.
Diagram 2. Distribution of completed projects by funds raised, USD.
We can see that 57% of completed projects raised less than $1M, which we consider to be a failure. There is an even distribution in the ranges of 1 – 5M up to 10 – 20M with Filecoin and Kin being the only two project to receive between 50 – 100M.
Have the projects reached their goals?
The following graph analyzed ICO’s with a verified hard cap figure.
Diagram 3. Distribution of successful projects by funds raised, as a percentage of the hard cap.
We can see that successful campaigns raised 10 – 20% or 90 – 100% of their hard caps (31% and 22% of cases respectively).
- The total amount of money collected by ICO’s is increasing. In September alone, $0.8 billion was raised by ICOs.
- On average, each ICO raised $20M. However, if you exclude Filecoin and Kin, the average sum would be 14 million dollars.
- A relatively high proportion of projects – 41% – experienced a successful completion.
- 59% of completed ICO’s failed.
- An absolute majority of failed projects were poorly packaged (poorly-functioning website, low-quality whitepaper, lack of translations, team members, etc.) and without proper promotion.
- Successful campaigns raised 10 – 20% or 90 – 100% of their hard caps.
- Campaigns that raised 100% of their hard caps were well-packaged projects with effective promotion and community management and a highly successful presale.
Sources: Suicide Ventures, project websites, whitepapers, official Bitcointalk threads.