Welcome to the fourth ICO analysis of 2018, provided to you by Algalon Capital analytical department. You can take a look at our previous reports on our blog.
This report covers 132 ICOs completed in April 2018 (pre-ICOs are not included). However, we have included ICOs divided by different phases. The results are calculated separately for each phase.
These terms are the key metrics in our report:
- “Soft cap” is the minimum amount required by a project.
- “Target” is the funding goal as stated by a project’s team.
- If a target is not stated, then we use a “hard cap”, which is the maximum amount a project hopes to achieve or the technical limit of the crowdsale.
- The ICO market size covered in this report should not be considered the overall money flow coming into the crypto market from fiat, as there is still speculation surrounding tokens. We are simply exposing the willingness of crypto holders to participate in new projects with BTC, ETH, and fiat currencies.
What are the Success Criteria?
An ICO is considered successful if the following conditions are met:
- The soft cap is reached.
- More than 50% of the target or hard cap is collected.
An ICO is considered a failure if at least one of these conditions are met:
- The soft cap is not reached.
- Less than 50% of the target or hard cap is collected.
- No information on the project status or funds raised is available, the official website has been deleted, and/or the official Bitcointalk thread has been cleared.
If the soft cap, target, and hard cap are not stated, our experts will analyze the project and make sure that the funds raised are sufficient to implement the business idea. Thus, if a company has collected the necessary funds to implement its roadmap, we deem it a success. If not, it is considered unsuccessful.
23% of all ICOs were completed successfully this month, a huge drop from last month’s 32%. This continues the downtrend that started in January. The below diagram shows the dynamics of ICO success.
ICO success, according to our criteria, closely correlates with the overall market downfall. Taking into account the recent market revival, we might see a better picture next month, but for now, ICOs are still considered too risky to invest in.
What About the Market Size?
Let’s see what’s going on in the market with regards to the funds raised.
|Raised by||Total Funds||Median Funds|
|Raised in crypto (ETH)||ETH 1.29M||ETH 0.022 M|
Table 1. Funds raised (if stated)
This month, we can see a continuous drop in the funds raised, despite the stable number of ICOs. However, the last half of April brought more the two-thirds of all funds collected in the month. This suggests that, following the recent rise of altcoins, we will see a new wave of ICO fundraisers soon.
As we stated in our Q1 2018 ICO report, the amount funds raised in crypto is pretty stable. This month, all ICOs raised 1.29M ETH, which is comparable with previous months.
If we convert the funds to the current price of ETH ($816 on April 5), we see a much more positive picture.
The median of the funds raised is starting to rise, comprising $5.5M this month compared to $4.4M in March. You can track the dynamics in the graph below.
We are trying to separate successful and unsuccessful ICOs to eliminate the influence of scammy ICOs on the general market trends. Regardless of possible influence from scams, we can state that this month shows a revival in both types of projects. The breakdown medians can be seen in the graph below.
How are Funds Distributed Among Projects?
Each month, without exception, the top 10 ICOs account for around half of all funds raised. This month, the top 10 projects accounted for 47% of the total funds raised.
However, this month didn’t bring any record-breakers in terms of funds raised; the biggest ICOs collected $72M, covering 10% of the market. Most projects successfully raised funds ranging from $20 to $50 million USD. According to our criteria, all successful ICOs collected 70% of the total funds this month, which is 12% less than in March. The following diagram categorizes the projects by total earnings.
Some ICOs set quite ambitious goals this month, with hard caps extending beyond six hundred million USD. In March, fewer low-caped ICOs were successfully completed. This month, around 36 ICOs hard-capped under $10M (compared to 50 ICOs last month) and raised only $70M altogether. Only 30% of them were successful. However, their success rate is comparable to the overall market’s success rate: 23%.
A lot of projects raised very small amounts well below their soft caps. Only 9 ICOs had a soft cap below $1M. Around 48% of all failed ICOs collected less than $1M, as compared to 44% last month.
53% of all ICOs collected under 10% of their target or hard cap. Only 11% almost fully covered their caps, but they represent more than 70% of the total funds raised this month (50 last month), which suggests much better planning of ICO campaigns and the setting of reasonable goals.
What About Scam ICOs?
Around 40% of all projects set soft caps. Only 5% of all projects stated that their ICO results didn’t meet their soft caps. 39% of ICOs did not provide results following the sale, and this unfortunate trend is increasing each month. Below you can see the dynamics of this trend.
The most noticeable case this month was with the QuantH ICO, which started to raise $50M with a barely functional website and no communication channels. We do not include such cases in our ICO reports. All reported data was manually verified.
Do We Have Any ‘Ninjas’?
This month, there was a total break in the trend of ninja ICO. This month was difficult and unpredictable across the whole ICO market, which stopped huge investors from funding ICOs. Private funds were often allocated at the beginning of each campaign. However, we can still show you some patterns in the ICO duration. The below graphic shows that most funds are collected after two weeks a campaign starts.
The below image illustrates the total number of funds collected during each period. The percentage of successful ICOs drops significantly in each period. Fast ICOs are still more successful, but there were only a few such cases this month.
It is good to see the amount of funds raised in comparison to the previous month. Far fewer funds were collected during first two weeks in April.
The interesting thing is the average funds raised per ICO. The ninjas are also leading in this domain.
- This month, there were 22 pre-ICOs, raising around $65M. That’s almost half of what was archived in March regarding both parameters: quantity and funds raised.
- The market is reviving. All major altcoins have been rising since the beginning of April, but we still have poor statistics due to a long tail of long-lasting bad ICOs from previous months. If we eliminate this and consider only ICOs started and ended this month, we see a much better picture. The total funds collected by 25 projects amounted to $234M, with a success rate over 50%.
- A lot of projects postponed their ICOs to May to catch the general market revival starting this month.
- El Petro’s had claimed to raise $3.3B, other stated as high as $5B, with no actual confirmation in either case. We cannot find a trusted source confirming this and thus did not include it in our analysis.
- Basis (formerly Basecoin) raised $133M in a private round from Bain Capital Ventures, Stanley Druckenmiller, and Andreessen Horowitz, among other well-known investors. However, this was not a main round or an ICO phase, so it was not included in our ICO report.
- We can indicate a newly arising category of ICOs – “Supply Chain”. There are already several supply chain projects popping up in the market.
- As always, the finance sector contains a lot of blockchain projects. 28 projects proposed solutions in this field in April.
- The overall amount of funds raised decreased from $862M in March to $705M in April.
- The total amount of crypto raised was ETH 1.29M, compared to ETH 1.44M in March.
- The total number of ICOs was 132, compared to 130 last month.
- Only 23% of ICOs were successful, compared to 32% last month. This number has been dropping for four months in a row.
- There were no ICOs that raised more than $70M this month.
- The median funds collected by all projects comprised $5.5M in April, compared to $4.4M in March.
- Over 50% of all ICOs raised under 10% of their target or hard cap.
- The top 10 projects collected 47% of all funds.
- 39% of ICOs did not report the amount of capital raised, and this problem has been getting worse every month.
- There were basically no ‘ninja’ ICOs this month. ICOs were closed on a standard two-week-plus schedule.
Algalon Capital will continue to provide ICO analyses on a monthly basis.