Weighing in the heavyweight contenders

Thursday, May 3, 2018

ICOs raised $550M in April 

48 completed ICOs raised a total of $548M in April 2018. This is a significant (25%) decline since March and close to a 70% decline from the “ICO fundraising peak” in January. Total capital raised by completed ICOs stands at $4.1B in 2018 versus $5.6B for 2017.

Two trends stood out in April:

  1. Higher ICO Failure Rate: 7 out of every 10 ICOs that ended in April did not publish any data about the completion of their token sale or completely disappeared from the internet. We consider these ICOs to have “failed”. Although it’s a lagging indicator, it’s the highest failure rate since we started capturing data in 2016, and further shows that many projects are of very low quality. 
     
  2. New definition of “success”: Even for ICOs that do publish data, we’re seeing a trend towards vague reporting. For example: some ICOs claim a “successful” raise but do not report any data on funds raised (USD, ETH, BTC) and/or the smart contract address through which we verify our data. Instead, these projects report the number of tokens sold, which is meaningless, since many of these projects give heavy discounts at the start of the sale.

So – we’re seeing a downward trend – but how does the fundraising chart look if we include  Telegram’s private sale (which reportedly closed this week) and the ongoing EOS sale?

Corrected for Telegram and EOS, ICOs have raised $8B in 2018 ytd

The Telegram private sale raised $1.7B
The private filings with the SEC show that Telegram raised $850M in February and March… a staggering total of $1.7B. If we include this data our ICO fundraising estimate for 2018 increases to $5.8B, – surpassing the $5.6B raised in 2017.

It gets even crazier…

EOS has raised $3.3B and is still active for 2 months
Our analysis* of all the Ethereum transactions sent to the EOS token sale shows that EOS has raised close to $3.3B since the sale started in June 2017 with the following annual totals:

  • 2017: EOS raised $840M
  • 2018: EOS raised $2.25B year-to-date

Corrected for Telegram and EOS, ICOs have raised $8B in 2018…
Taking both the Telegram and EOS data into account, we adjust the 2017 capital raised number to $6.5B and 2018’s to $8B. It only took 4 months for ICOs to raise more capital than in all of 2017….

Slowdown in public fundraising, but uptick in private (unattributed) token sales in the US
Nonetheless – even with the large adjustments for Telegram and EOS – we see a decline in token fundraising since the start of 2018. This is especially the case for public token sales (first graph).

However, there are two caveats:

  1. Lagging Indicator: TokenData’s main methodology of looking at the end date of an ICO means we’re working with a lagging indicator. 
     
  2. Increase in 100% private rounds:  Similar to the Telegram private sale, there is an increase in capital raised through fully private rounds in which tokens are sold through a SAFT (and in the US to accredited investors only). 

    Some notable examples for April:

We’re compiling data on the private (unattributed) token sales and will take them into account going forward. If you have any data on this – we’d love to hear from you!

Cheers,

The TokenData Team

*USD value of EOS token sale was calculated by marking each day’s ETH contributions to the EOS token sale at that day’s ETH closing price. Subsequently, we calculated the totals per month.