ICO Market Review 2017
The world of blockchain and cryptocurrencies, as well as the ICO market, are in their boom phase. In 2017, crowdsales gained wide popularity both among investors and among startups including those which are not directly related to a cryptocurrency ecosystem.
The number of token sales launched within the three quarters of this year has already exceeded 300 which is more than one ICO campaign per day. As of today, multiple studies in the ICO market have been published, like Coindesk and Autonomous reports in particular. Summarizing these reports, we can mark out the peculiarities described below.
During the first half of 2017, blockchain projects raised $797 million through ICO campaigns while projects with “conventional” venture investments managed to put together only $235 million. For the first three quarters of 2017, 201 ICO projects raised about $3 billion. ICO campaigns that failed to reach their goals are increasing in number as well: in June, 7% of the projects did not get a chance to reach a success, in August – 54%, and in September – 66%. More and more institutional investors participating in token sales appear on the market. There are more than 100 of them for now.
Blockchain projects investments rose in the 2nd quarter of 2017, ICO exceeds VC more than three times
Blockchain projects investments in the 2nd quarter of 2017
cumulatively ICO cumulatively VC
April May June
Cumulative investments in the 2nd quarter of 2017 ($ mln)
TOP ICO transactions TOP VC transactions
When analyzing advances in the ICO market, it is important to consider not only the total amount of fundraising and top projects but also separate market segments. Some resources now offer statistic data on ICO market segments, but no criteria for assigning a project to a certain category have yet been published. Moreover, insufficient development of criteria, designed to assess the ICO market various segments success, is observed. In this article, we suggest using the category’s numerical strength and the ICO campaign’s average closing period as such additional criteria.
ForkLog Consulting experts reviewed a selection of 148 projects divided into 24 categories depending on the project’s field of activity. These projects raised $2.379 billion in total or about 80% of all facilities collected during 9 months of 2017, making the selection quite representative.
The “Finance” category is the most sizeable
Top 5 ICO market segments according to quantity, a number of projects
This category includes 32 projects (22% of the selection) which accounted for 25% of all the raised funds (about $523 million). It involves wallets, exchange services, asset management, trading platforms, lending platforms, and payment systems. This is the category which takes the lead according to ninja ICO projects share in it (the projects where token sales open and close the same day): one third of all ninja projects from the selection (18) belong to this category, and in the category itself, approximately every fifth campaign became a ninja project. Bancor ($159 million, one-third of all fundraising in the category) is the most successful campaign in the “Finance” category.
The “Infrastructure” category is ahead according to funds raised
Top 5 ICO market segments according to funds raised, $ mln
Commerce and advertising
Decentralized data storage
In this category, 19 projects (13% of the selection) raised 27.6% (about $630 million). It includes platforms that involve smart contracts and decentralized applications, inter-blockchain solutions, cybersecurity projects, and a range of other infrastructure projects. The Tezos (about $219 million) and EOS ($185 million) projects are the most successful in this category. Both projects take up 64% of the funds raised by all 19 projects in the “Infrastructure” category. In spite of the misalignment like this, the category takes a lead according to average funds raised, which is $33 million. The “Commerce and advertising” category (11 projects), which includes projects related to advertising and websites engaged in trading real and virtual commodities, takes the second place according to this index. In the “Commerce and advertising” category, the average amount raised is almost $19 million.
Top 5 categories according to the funds raised:
- Infrastructure $629,735, 885
- Finance $522,850,138
- Decentralized data storage $287,000,000
- Commerce and advertising $206,166,095
- Communications $164,901,179
ICO campaigns of the “Investments” category were the fastest to close
In addition to the number of projects in any category and the funds raised, the actual duration of the ICO campaign – the time necessary for the ICO project to raise sufficient funds and announce its closure – also characterizes the projects’ success. In this nomination, the “Investments” category (13 projects) wins. It includes venture funds and accelerators, as well as other projects offering to invest in various blockchain projects, cryptomining, and real assets. In this category, the average ICO campaign closing time is 20 days. At the same time, ninja projects take just 7.7% of this category while in the “Finance” and “Commerce and advertising” categories they take 18% in each. Having excluded the ninja ICO from the selection, we can see that the “Investments” category wins with an average closing time of 22 days. The “Commerce and advertising” category takes the second place, as ICO projects of this category close within 21 days on average and within 26 days excluding ninja projects.
The most unpopular ICO market segments in 2017
It is important to consider not only successful projects but also those ones which failed. We reviewed the categories that included projects with the smallest funds raised, as well as categories with the longest average campaign closure. As it turned out, the smallest categories, in which there is only one project, are “Insurance” (InsureX), “Education” (Lunyr), “Recruitment” (CoinJob), and “Charity” (TribeToken). However, “Insurance” and “Education” are relatively successful, having raised $18.5 million and $3.3 million respectively. At the same time, the “Recruitment” and “Charity” categories were not only the least numerous but also the least successful: they got only $23.5 thousand and $1.8 thousand respectively. We have to note that there are five projects in the “Recruitment” category at the moment. In the future, they can improve the success of this category.
The “Currency” category had the longest average closure period. This category includes projects offering new altcoins. The “Currency” category projects closed within 44 days on average. It is also important to note that the campaign’s longer closing period does not necessarily mean the project is less attractive. This phenomenon may be connected with other various factors that require separate research efforts.
Thus, the most significant categories on the ICO market for the three quarters of 2017 are as follows:
The most sizable category: “Finance” (32 projects, 22% of the selection).
The highest ninja ICO share: “Finance” (18.75% of the category and one-third of all ninja campaigns in the market).
The most successful category according to funds raised: “Infrastructure” ($630 million, 27.6% of funds raised).
The highest average funds raised: “Infrastructure” ($33 million).
The highest average closing period: “Investments” (20 days and 22 days excluding ninja campaigns).
Furthermore, according to the three indices simultaneously – the ninja ICO share, the average funds amount, and the average closing period – “Commerce and advertising” ranked second among the categories.
At the end, let us compare the received results in the top 5 ICO projects according to the funds amount:
Project name Category Amount (mln) Project share in its category
Filecoin Decentralized data storage $257 89.5%
Tezos Infrastructure $218.82 64%
EOS Infrastructure $185
Bancor Finance $159.28 30.5%
Status Communications $107.66 92%
The small categories like “Decentralized data storage” and “Communications” (2 and 4 projects respectively) got into the TOP 5 fundraising categories and gained magnitude exclusively because of the Filecoin and Status projects which account for nine-tenths of all the funds raised in these categories. In contrast to this, the “Finance” category looks even more significant since the Bancor project accounts for only a third of all the funds raised by this category.
However, there is nothing surprising in this – fintech will remain fintech.