With the explosion of Bitcoin, hundreds of other cryptocurrencies have launched with dreams of experiencing the same success. As a result, more and more ICOs, otherwise known as initial coin offerings, are springing up. ICOs are often referred to as crowdsale or token sale events, which is when companies decide to release cryptocurrency to audience members in the form of crypto tokens as a way to raise funds for their projects. This allows companies to obtain the capital they can use on a number of ventures, from product development to special projects.
What Makes a Successful ICO ?
Of the many ICOs out there, what are some of the most successful? What makes them so popular? Experts tend to have differing opinions, but there are some commonalities among the successful ICOs. Many agree that the biggest factor is whether the coin actually has good utility. There should be more to the coin than just being bought and then sold on an exchange. This is actually what many crypto experts believe separate the top dozen or even hundred tokens and ICOs from the hundreds or thousands of others just sitting on exchanges and in wallets.
While the utility of the coin is a significant factor, it is not the only thing to determine whether an ICO fails. You also need to consider the goal of the project, the composition of the team (including their own personal history of successes and failures), how far along the project is, whether they have a supportive community, and, of course, if their project will actually make a difference. Even if the token serves a crucial role within the project’s ecosystem, the ICO will likely fail if the project itself is a repeat of past projects by other teams.
What about Failed ICOs ?
While the successful ICOs tend to be those that we see in the news, not all initial coin offerings have what it takes to be a success. In fact, many have failed within just the last year alone, with additional failures as you look back further. On Feb. 23, 2018, Bitcoin.com published a report showing that 46 percent of the previous year’s ICOs had already experienced failures. This was despite those ICOs having raised more than $104 million. In addition to all those failed ICOs, some are “semi-failed” due to a very small community that leads to minimal chances of success or no communication from the team.
With so many failures from ICOs in the last year alone, it begs the question as to what led to these failures. Although not always the case, many ICOs that end up failing have shown warning signs at some point during the project, either before or during the token sale. One of the biggest factors is that many of the ICOs simply had bad project ideas that did not solve a real-world problem.
Other projects failed due to technological issues, such as security and scalability. The Dao project, which launched in 2016, is still the largest cryptocurrency failure by the sheer amount raised during the ICO, and it all came down to poor security. In fact, The Dao’s security was so bad that after raising 11.5 million ETH, an attack led to losing 3.6 million ETH.
Unfortunately, some factors affecting whether an ICO succeeds or fails are not controllable. Looking at the statistics, it is clear that ICOs from certain regions of the world tend to have a higher success rate than those from others. Africa, in particular, has over-representation in terms of ICO failures. African ICOs are at a significant disadvantage because as of March 2018, none of the top 10 ICO investment countries in the world were in Africa. This adds an extra challenge to any African-based ICOs and makes it nearly impossible for an ICO focused on delivering a product to Africa to enjoy success. One example is Tingo Coin, which wanted to become the first VAS-backed blockchain option in Africa for agriculture.
Projects in these areas can take steps to improve their chances of victory. In addition, those from regions with a higher ROI can learn lessons to maximize their own probability of success. The takeaway from this particular challenge is that any ICO that focuses on a highly specific region or problem might not be able to get enough interest and backing.
Now, let’s take a look at some of the most successful ICOs of all time and find out what sets them apart from others.
- Initial Token Price: $0.311
- All-Time-High Price: $1,420
- ROI: 152,500 percent
Ethereum has made a name for itself as one of the most valuable cryptocurrencies in the world, right behind Bitcoin. Led by Vitalik Buterin, Ethereum isn’t just any cryptocurrency; it is a ledger technology that can be used to build decentralized applications, commonly known as smart contract technology. The attention – and related success – of Ethereum comes from its multiple applications. The smart contract platform of Ethereum can help with a range of business processes that are currently inefficient, streamlining and digitizing them.
Ethereum first entered the stage four years after Bitcoin’s boom in 2011 and has since been churning out an incredible ROI of 152,500 percent. When Buterin first sold Ethereum tokens, they were going for $0.31. Today Ether tokens are valued at $334.25. This significant value growth over the years comes thanks in large part to corporate interests and Ethereum’s potential for innovation as well as its use cases for smart contract applications.
- Initial Token Price: $0.032
- All-Time-High Price: $180
- ROI: 114,000 percent
Formerly known as Antshares, NEO is a Chinese open-source blockchain that is taking the cryptocurrency industry by storm. Founded by Da Hongfei, NEO is often referred to as “China’s Ethereum” and utilizes smart contract applications, digitized assets, decentralized commerce, and more. The well-known names supporting it, including Microsoft and the Chinese government, are a key part of NEO’s growth in popularity. Having such powerful and well-known backers behind the project goes a long way in making investors feel confident, which is why NEO’s founders have high hopes for the future. Additionally, the fact that the Chinese market has a great potential for blockchain use cases but is challenging for foreign companies to enter has given NEO an edge. Investors feel that China will embrace the project in a way it does not foreign ones.
NEO also has practical applications, with the goal of creating a blockchain that will represent legal proof of ownership, with general societal acceptance. The project’s ability to combine digital assets with smart contracts in a “smart assets platform” has also gained attention and is one of the standout features that has led to plenty of backers. To show just how popular NEO has been from the start, its first ICO in October 2015 raised about $550,000, despite ICOs being relatively new. Its second ICO in September 2016 raised a whopping $4.5 million.
- Initial Token Price: $0.04
- All-Time-High Price: $10.78
- ROI: 35,400 percent
Ark excels at collaboration and stands out with its lightning-fast platform designed for integrating cryptocurrencies into its own blockchain. Like many other ICOs, Ark is incredibly popular because of its decentralized nature.
Additionally, the project team spans 11 countries. Ark has also developed a reputation for bridging cryptocurrencies, something that has encouraged investors to get excited about it. As a result, Ark’s ROI stands at about 35,400 percent. That’s an impressive gain and only one of the reasons why Ark is one of the most successful ICOs today.
- Initial Token Price: $1.50
- All-Time-High Price: $52.40
- ROI: 3,495 percent
Designed with privacy in mind, Particl is both a cryptocurrency and decentralized marketplace centered on anonymous transactions. Because it’s modeled on the Bitcoin platform, Particl users are able to make transactions with total anonymity.
Since that type of privacy is important to many users and investors today, Particl has enjoyed a lot of success so far, raising $750,000 in a short period of time and achieving a 3,495 percent ROI.
- Initial Token Price: $0.0000168
- All-Time-High Price: $2.15
- ROI: 1,477,000 percent
A developer known as BCNext launched the project in 2013, making this not only one of the most successful ICOs but also among the earliest. Among the longest-standing blockchain projects today, NXT was originally built as a blockchain platform for the financial services sector and applications. During initial fundraising, the NXT team raised the equivalent of $16,800 in Bitcoin. This money was earmarked for developing the proprietary open-source proof-of-stake consensus mechanism for its digital currency, known also as NXT.
It stands out from others because it boasts its own asset exchange, as well as its own messaging system and marketplace. Via the NXT marketplace, small businesses, banks, and corporations can create blockchain applications. Those in the industry feel that part of NXT’s success comes from its status as among the very first platforms offering the blockchain as a service. As such, it stood out with an innovative and useful idea and attracted dedicated developers.
- Initial Token Price: $0.076
- All-Time-High Price: $39.31
- ROI: 19,080 percent
Additionally, Lisk has the support of powerful backers, including some who backed Ethereum. Because of this, it has managed to grow exponentially since joining the ICO stage. In fact, since its founding, the ICO has achieved an ROI of 19,080 percent.
- Initial Token Price: $0.007
- All Time High Price: $22.29
- ROI: 81,000 percent
Compatible with C# and .NET, Stratis is a startup based in the UK that is particularly popular among veteran Microsoft users and financial institutions alike. The platform provides businesses the ability to not only create but also test and then deploy custom applications, all without having to set up or even maintain their own infrastructure.
With the Microsoft name behind it, it’s no surprise that Stratis has managed to fare well. The project raised about $600,000 during the initial coin offering, something those involved considered a big success. In five weeks, it managed to raise 915 BTC and achieved an impressive 44,525 percent ROI.
- Initial Token Price: $0.63
- All Time High Price: $5.69
- ROI: 332,500 percent
IOTA has managed to make a name for itself by combining elements from the IoT (Internet of Things) and blockchain technology. Fortunately for the project, this method of operations has worked well so far and has allowed it to achieve a 332,500 percent ROI. IOTA stands out from others ICOs because it is one of the only digital currencies that doesn’t conduct transactions by using a full blockchain but rather uses a Tangle. Tangles do away with issues linked to transaction fees and scalability that other digital currencies, including Bitcoin, have to contend with.
Instead, IOTA requires individuals sending funds to follow a verification process while simultaneously sending funds. As a result, the IOTA transaction ledger is fully decentralized, creating a zero-fee system for transactions. In other words, network participants do not need to receive fees to verify transactions. IOTA enjoyed great interest from the start. The initial coin offering in late 2015 raised more than $400,000, a very good figure for the time, selling all 1 billion IOTA tokens. Experts say that IOTA’s popularity is largely due to its zero-fee digital currency transactions that do not require an actual blockchain. That lack of blockchain means there are no scaling issues like with other digital currencies, making it possible to use IOTA for IoT networks.
So, what lessons can be learned from successful ICOs? We can take just as many lessons away from the successful ICOs as the failed ones. Perhaps most importantly, launching a successful ICO is dependent on value, not fate or luck. All the ICOs on the above list of successes boast something valuable that make them attractive to investors. This investor support is the key to succeeding as an ICO.