ICO has been widely developed in 2017. Various industries and projects have been invested in this emerging fundraising model. However, in just one year, the enthusiasm for digital cryptocurrencies has cooled down.
According to data from the Dead Coins website, there are currently about 800 inactive tokens in the digital cryptocurrency industry, and the Coinopsy website directly predicts that more than 1,000 projects will eventually die.
Well-known investor Aaron Brown said in an email: There is indeed a lot of fraud in the ICO market. I think 80% of ICO financing cases are purely fraudulent, and 10% lack substantial operations, and they quickly fail after financing. The last 10% of projects will end in other reasons.
According to an analysis conducted by ICO consulting firm Satis Group in March: less than 4% of ICO projects with financing between $50 million and $100 million can be successful.
The Coinopsy website, which predicts the deaths of thousands of blockchain projects, said: We will see more and more ICO projects fail and will not get to the exchange. So what influenced the ICO economy in 2018?
1.The ICO project itself has problems
As Aaron Brown said, many ICO projects have fraud in themselves, such as the waykichain (wicc) that wants to take the advantages of World Cup’s population. After being exposed to various frauds, waykichian is very dangerous now.
2.ICO Global Common Regulations
ICO has achieved good results, but fraud in the name of ICO is not uncommon. Therfore, countries are actively discussing the development of cryptocurrency transactions and ICO regulations. The suppression of ICO financial irregularities by regulators around the world has also accelerated the deaths of many projects.
3.More options for ICO projects besides Ethereum
At present, most ICOs are based on Ethereum. Tokens usually refer to the ERC-20 standard. However, in addition to Ethereum, other blockchains can be selected for ICO fundraising, such as Stellar and Qtum. By the way ,the current qtum market cap is $813,602,445 USD and ranks 21.
4.The belief in the token economy will be tested
For the user, a very important reason is needed to attract them to hold a certain amount of tokens, otherwise the value of the token will eventually return to zero. Moreover, with the public's understanding of the token economy, the cryptocurrency industry has become more complex. Most of the discussions about ICO revolve around practicality and security—that is, issues related to regulators.
5.The direction of traditional technology companies
Although large technology companies do have ICOs, they don't necessarily have decentralized actual needs. In contrast, in many cases, crypto tokens are more often opposed to their existing business models.
As a whole, the current situation of ICO is not very optimistic. If you want to invest in an ICO project, you must carefully examine all aspects of the project. Otherwise, you will fall into a scam.