One out of three ICOs fail
One out of three initial coin offerings (ICOs) are failing, according to digital asset assessment agency DigRate.
The firm has just launched ICO Market Stats – an analytics system that provides information on all ICOs since 2014. The idea is to help investors assess new blockchain projects.
Arseny Poyarkov, founder of DigRate, says the ICO market is “showing remarkable rates of growth”, with less than $300 million raised in investment capital in 2016, just under $7 billion in 2017 and over $4 billion within Q1 2018.
According to ICO Market Stats, a total of 1,463 ICOs have been launched since 2014, raising $11.7 billion in investment capital.
Statistically, 565 projects (39%) failed to raise enough money to get their projects off the ground and shut down (“failed”), and one out of seven ICO projects “lost”, bearing the “markings of a scam or proving to be unpromising” – and there have been 191 such projects since 2014.
According to DigRate, the “lost” status is given to projects, as reported by the media, whose founders defected or were arrested, or failed to take their tokens public within three months of the ICO launch date, as well as to projects with unavailable websites. Investment contributions to such projects amounted to $851 million.
To establish its system, DigRate aggregated publicly available data from various ICO platforms – Tokendata, Icodata and Coinschedule.
DigRate’s analytics team reviewed and identified inconsistencies found on these platforms and coalesced the data on all ICOs since 2014 into a complete database.
Furthermore, the “automatically updating system” developed by DigRate “eliminates duplications and potential discrepancies”. Other sites, such as Cryptocompare and Coinmarketcap, websites where one can track the token trading process, were also used to assess projects and assign statuses.
The ICO analytics system is free and DigRate intends to expand its list of monitoring indicators to include countries, know your customer (KYC) and token types.
DigRate says it is the first professional ICO rating agency in the world, with offices in Switzerland and Russia. The project team includes specialists from the fields of IT, investment, and business rating.