Why do the majority of crypto projects fail?

By Answerly app | Answerly | 14 Nov 2019

Let's face it! A large portion of blockchain-based projects fail for one of these 5 reasons:

1. They don't raise enough funds during their ICO phase
2. They fail to maintain their Coin/token price
3. They fail to effectively use their funds
4. Low liquidity / Low market interest
5. They were intended to be a pump and dump scheme from the very start

For now, we'll put aside the 5th possibility and assume that the team is honestly willing to bring up something new
in this competitive market. In this case, the team is bound to come across these challenges where one poor decision can
jeopardize the entire company.

The most common problem with the majority of existing blockchain-based projects is that they come up with all sorts of crazy
ideas that require tens of millions of dollars to test out their experiment. Until now, this has mostly resulted in an increasing
number of unsuccessful projects. In reality, the startups aren't supposed to work this way. It seems absurd to raise millions without
proving the project's success and market demand. It's even worse to raise millions without having an actual product.

What is actually needed?

We just need to think of crypto and blockchain technology as the early days of the internet. During the late 1990s, the internet was also filled with similar terrible ideas which eventually turned into dust during the 2001 dotcom bubble. The only companies that managed to survive this bubble were the ones that proved their usability and had a valid revenue generation model.

Instead of trying to start big, it's better to start with the least feasible product and take it from there. In addition to this, the early stage
of development needs to be fully self-funded. This will definitely add tonnes of different challenges to cope with, but that's the part of this game, right?

Not only this will allow you to utilize your limited funds more efficiently but it will also prepare you for what's coming next. Building something useful has never been easy and that's how it should be.

In order to explain myself better, I've divided the overall crypto audience into 3 different sections:

1. Project team
2. Traders / Investors
3. Exchanges

As we've already discussed about the first half, it's time to point out how crypto traders are slowly ruining this entire industry.

Regular crypto traders usually consist of a group of young adults who have had no previous investing experience. They're willing
to put their money into anything that's overhyped and sounds cool - no matter no unrealistic that concept might be.
Their investing decisions consist of a horrendous set of factors to consider. One such factor is the project's listing on Binance or any other similar exchange having hundreds of millions of dollars in daily volume. Any blockchain-based project that doesn't have enough volume to sustain its price after a big dump is deemed
unworthy.

To be honest, the majority of projects are equal culprits in such circumstances. They generously distribute bonus tokens during the ICO phase and airdrop a huge portion of their token's overall supply in order to grow their community. These teams often fail to realize how their activities can lead to serious consequences and can eventually result in long term price decline. I agree that airdrops are a good way to build an initial community, however the participation tasks shouldn't be made too easy. The participants should be encouraged to complete some real tasks (time-consuming) so that they don't easily dump their holding below the listed price. Furthermore, the team should treat their crypto as an asset and try to utilize as little as possible.

Proceeding further to the last section - "Exchanges".

In my opinion, the majority of exchanges are a disgrace to the entire crypto industry. I loathe exchanges because most of them would list anything, given that the project is willing to cover the listing costs - which usually ranges from $15K - $2.5 million. These so-called exchanges use blackhat techniques (such as wash-trading) to increase their overall daily volume and attract potential projects to list cryptocurrency on their platform.

Getting listed on an exchange should be a free process and must require the projects to prove their credibility and usability.

Answerly Introduction

Considering all these factors, we started working on a fully self-funded Q/A based platform called Answerly. If everything goes as planned, we should be able to launch Answerly by early Feb 2021. Answerly is a stellar based platform that will allow any average Joe to make a decent amount of money online without having tonnes of skill-sets.

Assuming that you're already familiar with Quora, you may think of Answerly as Quora on blockchain where the users will be able to earn by answering questions. Once they hit the minimum threshold, they should be able to withdraw the earnings to an exchange and convert it into crypto or fiat. As for the exchange, we initially plan to get listed on Stellarport and StellarX and will slowly take it from there.

We will soon add a post to discuss the features that we plan to add in this platform. Oh btw, the website is currently down as we're still in the development phase but here are some designs to for you.