Initial Coin Offerings (ICOs) are increasingly becoming the most preferred route for the blockchain-cryptocurrency start-ups to raise fund. A start-up creates a whitepaper describing their business plan and technology, carries out online marketing, uses a popular platform such as Ethereum or Waves, and raises fund for their development effort in public sale. Investors buying crypto tokens effectively get a stake in the project, quite like Initial Public Offerings (IPOs), however, ICOs aren’t conducted in a regulated environment. The first ICO was in 2014, for Ethereum project, while, for the first time in the history of ICOs, start-ups in June 2017 raised more funds through ICOs than traditional venture capital (VC) funding.
There are many cryptocurrencies in the market, and there have been many ICOs. However, not all tokens have become as famous as Bitcoin or Ethereum. Success of an ICO can be measured by the funds raised during the public sale, and occasionally a private sale preceding it, but it also is measured by the appreciation in the value of the coin over time. We look at the 10 most successful ICOs, keeping these criteria in focus.
Ethereum took the market by storm not just because of their cryptocurrency Ether (ETH), but mainly because they offered a platform, and smart contracts, which would go a long way to make blockchain and cryptocurrencies ubiquitous. Many experts believe that NEO has done even better than Ethereum in this regard, for e.g.:
NEO, developed in China, recognizes that governments and regulators will have a role to perform in crypto economy of the future, and their design has already factored this in. A pragmatic approach!
The Byzantine Fault Tolerance consensus mechanism allows execution of 10,000 transactions per second, which is noticeable when we consider scalability issues faced by many blockchain projects.
NEO allows other cryptocurrencies on their platform, and isn’t confined to their token only.
A company focused on building right partnerships, NEO has embarked on partnerships with 18 major financial institutions in December 2017.
With backing of Microsoft and Alibaba, as well as the power of China’s market of billion-plus people, make NEO’s prospects bright, and the price of the coin reflects this, with a rise from US $ 0.03 to US $ 88.20, or a 294,000 % return on investment (RoI)!
Bitcoin (BTC) is the most famous of cryptocurrencies, and has the highest market cap, while Ether (ETH) has the second highest. However, many experts believe Ethereum is more complete blockchain, and has had a far greater contribution to blockchain and cryptocurrencies. Ethereum’s value is not confined to Ether, rather the real value is in the Ethereum blockchain platform. Many cryptocurrency project teams have launched successful projects using Ethereum Virtual Machine (EVM), and created their own crypto tokens, which has gone on to become successful, for e.g. VeChain and OmiseGo. Ethereum introduced the smart contracts, i.e. pieces of code that enable executing legal-like functions, for e.g. taking control of an entity based on certain conditions and transferring crypto tokens as a remuneration. Smart contracts are used in many utility token-based cryptocurrency projects, such as LockChain.co, the company that has built a zero-commission travel marketplace that will compete against Booking.com and Airbnb.com. Ethereum offers Solidity, i.e. their own proprietary language, for writing smart contracts. New cryptocurrencies can be created using the ERC20 standard for tokens. Distributed apps (DApps) can be created using the Ethereum platform. Ethereum ICO had raised US $ 18 million in just 42 days. The price of Ether has increased to nearly US $ 300, from the ICO price of US $ 0.30, which is a phenomenal 100,000% increase. This reflects the promise of Ethereum, and many experts believe that Ethereum will one day replace Bitcoin as the market standard.
There is a certain niche audience for cryptocurrencies that are drawn to these digital currencies primarily because of their promise of anonymity. Bitcoin provides partial anonymity, and earlier this year Bitfury, an American blockchain transaction processing company, has launched a suite of products called ‘Crystal’, which will help law enforcement agencies in identifying the real users of Bitcoin. We mention this to show that the most famous of cryptocurrencies don’t necessarily offer complete anonymity. There are other cryptocurrencies that promise complete anonymity, but don’t live up to their promise. For e.g. Verge (XVG) had promised anonymity to their users, but their Wraith protocol didn’t provide anonymity and privacy. SpectreCoin offers anonymity, and lives up to their promise. They use Tor network, and premium-quality encryption technique. The price of the token has risen from US $ 0.001 in November 2016 to US $ 0.64, providing a significant RoI of 64,000 %, because they attract this niche privacy-focused audience. However, only time will tell how the long-term prospects will be for coins offering absolute anonymity, since governments and regulators all over the world are increasingly wary about the possibility that criminals and terrorists may fund their illegal activities using the anonymity offered by cryptocurrencies.
Cloud computing has changed the world of technology, and the various “as-a-service” cloud computing models have made a big impact on how applications are developed, tested, deployed and run. There are blockchain-cryptocurrency start-ups that have used this concept, and created “blockchain-as-a-service” (BaaS) models. Stratis has developed BaaS platform for corporates and organizations, who want to develop, test, and deploy C# apps using ‘dot Net’ framework. Since many companies and developers have used these Microsoft products for long, and want to continue to use them while taking advantage of cloud computing and blockchain, Stratis has a significant appeal. Stratis is also backed by Microsoft. Their ICO was in June-July of 2016, and the starting token price was US $ 0.007. As an all-time high, the price had reached US $ 10, which is an impressive 140,000 % increase!
Ark was created with the objective of providing an ecosystem that will help mass adoption of cryptocurrencies. Far more than stressing on its own cryptocurrency ARK, the intention of this consumer adoption platform is to simply the interactions among various blockchains and cryptocurrencies, and simplify cooperation. The eight-second block time Ark offers result into fast transactions. The Smart Bridge technology that Ark uses allows it to seamlessly communicate with other blockchains. The platform offers decentralization, anonymity, high reliability, good protection, and a currency that can be used universally. The project team is quite busy developing new services and tools. The price of ARK has reached US $ 3.54 from the ICO level, and that represents a high appreciation of 35,400%, reflecting the faith of investors on its promise of collaboration.
A blockchain-powered decentralized operating system (OS), EOS enables businesses to build decentralized blockchain distributed apps (DApps) in a commercial scale. EOS provides all the core functionalities needed for this, and its asynchronous communication, coupled with parallel processing, provide for scalability. Built by block.one, the platform includes databases, accounts with permissions, scheduling, authentication, and ability to handle communication between the app and the Internet. Developers are free from worrying about logistics, and can focus exclusively on their business logic. The users will own and use resources proportional to their stake in the system, and don’t have to pay for every transaction. This ownership model eliminates transaction fees. The project team promises millions of transactions per second, the kind of scalability that’s lacking in today’s blockchain-based systems, and is absolutely needed to make blockchain ubiquitous. The ICO is being conducted on the Ethereum platform, the crypto token is developed conforming to ERC20 standard, however, EOS can provide serious competition to Ethereum in the coming days. The token sale will continue till the middle of 2018, and already US $ 700 million have been raised. This project is the one to look out for!
A peer-to-peer (P2P) platform, Populous intends to solve a problem that cost small businesses US $ 2 billion each year in UK alone! Many small and medium enterprises (SMEs) struggle to maintain a consistent cash flow, and late invoice payments are a key reason for this. There is a way to get around this problem, and that’s invoice financing. Using this route, SMEs can sell their outstanding invoices at a discounted rate, and can get some cash quickly. The person who bought the invoice receives the money when the client pays. Populous, with their blockchain-powered system, enables SMEs to participate in invoice financing. Smart contracts allow auctions that the buyers and sellers use to exchange invoices. The system calculates credit risk of invoices using industry standard Altman Z-score formula on real-time eXtensible Business Reporting Language (XBRL) data. The PPT crypto tokens were sold in ICO in June 2017, and raised over US $ 10 million. PPT tokens have delivered an RoI of over 6,800%.
Think of a stable blockchain that facilitates value-transfer, for e.g. Bitcoin. Now, think of a blockchain-based app development platform allowing you to use smart contracts, for e.g. Ethereum. Combine the two. Imagine your combined crypto project focusing on mobile DApps, and the consequent interest it will generate among crypto enthusiasts. Top it all with a proof of stake (PoS) consensus algorithm that eliminates mining, and the associated high energy cost and bad press. Sounds utopian? But that’s what QTUM is! You can use it for transferring cryptocurrencies via mobile app, as well as build your own Dapp that runs smart contracts. The project team also has more technical innovations incorporated in their product that help them to combine best of both Bitcoin and Ethereum, and not surprisingly, had a very successful ICO in March 2017. This crypto token has delivered an RoI of 6,400%.
Digix Distributed Autonomous Organization (DigixDAO) is a decentralized community, making decisions about steps needed to grow Digix Global ecosystem. In their ICO in 2016, the participants purchased DGD crypto tokens, which allow them to participate in the decision making in this DAO. These decisions pertain to improvement proposals submitted to DigixDAO. Digix Global is also involved with the creation of the crypto token DGX. One DGX token represents 1 gram of gold. As we know, cryptocurrencies are mathematical money, and aren’t backed by any tangible asset. With DGX token, that’ll change, and backed with a real asset, DGX is expected to provide stability in the volatile cryptocurrency space. Proof of Asset (PoA) process that’s used by Digix Global uses a comprehensive method involving entities like vendor, custodian, and auditor. PoA asset cards are created on Ethereum blockchain, with sequentially obtained digital signatures from the relevant entities. Upon receiving PoA cards, the system will create DGX token using smart contracts for each gram of gold. To sum it up, if you DGD token, then you are a decision maker in the DAO that’s creating DGX token, the first cryptocurrency backed by real tangible asset, i.e. gold. At a price of US $ 346.88 per token, RoI of DGD is 10,722%.
From the above examples, it’s clear that while good marketing, a user-friendly ICO event, and good whitepaper are essential for a good public sale, what drives long term RoI of a coin is the tangible value it offers. Innovations that addresses a specific market problem, or creates an opportunity where none existed before, are what makes cryptocurrency projects successful.