Welcome to the third ICO analysis in 2018, concluding Q1, provided to you by Algalon Capital analytical department. You can take a look at our previous reports in our blog.
This report covers 130 ICOs completed in February 2018 (pre-ICOs are not included). However, we have also 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 is hoping to achieve or a technical limit of the crowdsale.
- The ICO market size covered in this report should not be considered as overall money flow coming into the crypto market from fiat, as there is still speculation surrounding tokens. We are exposing the willingness of crypto holders to participate in new projects with BTC, ETH, and fiat currencies.
What is 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 and 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.
32% of all ICOs were completed successfully this month, continuing the downtrend that started in January. The below diagram shows the dynamics of ICO success.
ICO success, according to our criteria, closely correlates with overall market downfall caused by recent regulations and the shift to private ICOs. For more insight, please review our ICO trends article.
What about the market size?
Let’s see what is going on in the market with regards to funds raised.
|Raised by||Total Funds||Median Funds|
The amount of funds collected has decreased, comprising $862M this month, which is 18% less than what we saw last month and almost half of December 2017.
This month, the increasing number of ICOs has not resulted in additional funds collected. There are still a lot of shallow ICOs bridging the walls of the crypto castle following the last year’s madness.
The median of the funds raised is still dropping, going from $8M in January to $6M in February and now only $4.4M in March. The breakdown of successful and unsuccessful medians can be seen in the graph below. The graphic shows that the medians are closely related to the overall funds collected in dynamics.
How are funds distributed among projects?
As always, a few ICOs took a larger piece of the pie. The top 10 projects accounted for 52% of the total funds raised this month, and this tendency is increasing. We are not talking about TON’s and El Petro’s pre-sales here, either: those extraordinary cases will be covered separately.
This month has been pretty stable, with no significant spikes. There have been no ICOs above $60M this month. Most projects successfully raised funds in the range of $20 to $50 million USD. According to our criteria, all successful ICOs collected 82% of the total funds this month, which is the same proportion as last month.
The following diagram categorizes the projects by total earnings.
Some ICOs set very ambitious goals this month, with hard caps going beyond $200M. In March, fewer low-caped ICOs were successfully completed. This month, around 50 ICOs hard-capped under $10M (compared to 30 ICOs last month). However, their success rate is comparable to the overall market: 36% were successful.
A lot of projects raised very small amounts well below their soft caps. Only four projects have a hard cap below $1M. We predict a trend of micro-ICO with low caps in the future.
Around 44% of all failed ICOs collected less than $1M, as compared to 39% last month.
49% of all ICOs collected under 10% of their target or hard cap. Only 16% covered their caps, but they represent more than 50% of the total funds raised this month, which suggests much better planning of ICO campaigns and the setting of reasonable goals.
What about scam ICOs?
Around 60% of all projects set soft caps. Only 6% of all projects stated that their ICO results didn’t meet their soft caps. There are still a lot of ICOs who have not provided results following the sale, using vague statements such as “completed successfully” to calm down the community.
The most noticeable case this month was with the Denaro ICO. Denaro turned out to be a total scam, raising around $8M and then just disappearing, shutting down all communication channels with the community.
Below you can see the sorrowful dynamics of “shy” ICOs who do not provide financial information. The Asian projects take a lead in this area, with huge hard caps and no results provided whatsoever.
Do we have any ‘ninjas’?
This month confirms the correlation between ICO duration and funds raised. Eight successful ICOs hit their hard caps in less than a day, raising around $150M. This volume is half of that of the previous month, but taking into account the overall downtrend, it’s still a viable trend. The graphic shows that the most funds are collected within two weeks after starting the campaign, which is mainly due to ICOs setting standard one-month ICO durations. There are still plenty of rescheduled ICOs. This month, at least 30 ICOs postponed their closing dates.
The below image illustrates the total number of funds collected during each period. The percentage of successful ICOs has dropped significantly each period. The amount of funds collected by one ICO on average has heavily decreased over time.
- This month, there were 36 pre-ICOs, raising around $150M.
- Telegram’s second pre-ICO raised another $850M. That’s not included in our analysis, as we exclude pre-ICOs in general.
- El Petro’s pre-ICO was supposed to conclude in mid-March, but there have not yet been any official results. Eventually, Nicolas Maduro claimed the campaign had raised $735M.
- Dragon’s private sale brought $320M to the company. The following main ICO has also ended but not yet officially concluded, so we have not included it in our analysis.
- We can see a lot of approaches to raising money in ICOs. Some companies try to be creative by dividing rounds into phases and launching private sales (for a close pool of investors), pre-ICOs, and post-ICOs in addition to main ICO campaigns.
- A lot of ICOs are popping up in the “Data/Computing/AI” category with cumulative funding of around $250M.
- As always, the finance sector contains a lot of blockchain projects. This month, slightly under $200M was raised altogether by 28 projects.
- The overall amount of funds raised decreased from $1052M in February to $862M in March.
- The total number of ICOs was 130, compared to 122 last month.
- Only 32% of ICOs were successful, and this number has been dropping for three months in a row.
- There were no ICOs above $60M this month.
- The proportion of successful projects decreased to 32% of the total, compared to 38% in February.
- The median funds collected by all projects dropped, comprising $4.4M in March, compared to $6M in January.
- Almost 50% of all ICOs raised under 10% of their target or hard cap.
- The top 10 projects collected 52% of all funds, a proportion that is increasing each month.
- 33% of ICOs did not report the amount of capital raised, and this problem is becoming worse each month.
- 8 ‘ninja’ ICOs hit their hard caps in less than a day, raising around $150M.
Algalon Capital will continue to provide monthly ICO analyses.
Stay in touch.