The new crypto crowdfunding craze seems to have fallen flat according to a new Investment performance update
The first fundraising boom powered by the Initial Coin Offering (ICOs) in 2017–18 fizzled out soon after the bearish market took over and the revelation that the vast majority of the ICO projects had fraudulent intentions — 80% of the ICOs conducted in 2017 were identified as scams. 2019 saw the innovation taking another turn with the advent of the Initial Exchange Offering (IEO) replacing ICO.
The IEO offered a launching pad for the fledgling crypto projects where these startups can raise money. Unlike its predecessor, the IEOs intended to bring transparency to the fundraising process. The IEO platforms were mostly provided by crypto exchanges who had already been operating in the space.
These IEO platforms have sought to streamline the whole process while conducting proper due diligence of the projects before providing them their trustworthy platform to launch. The projects have to go through a rigorous KYC/AML verification. Major crypto exchanges like Binance, Huobi, OKEx & Bittrex have all launched the service on their platforms.
While it has been a relatively good year for the general crypto market, data from Bitmex research for the IEOs proves that it was a disappointing year for most of the IEO projects (charts below).
Key takeaways from the data:
- There were a total of 12 major IEOs launched this year.
- Binance was the most popular launchpad for IEOs, with 6 out of the 12 using its platform.
- 10 out of the 12 tokens were down to date with the exception of Matic.
- 9 out of the 11 tokens launched were down by more than 80% since the first exchange-traded price, with the other two reporting losses of 72% and 42% respectively.
- The only token that managed to gain was Matic which posted a gain of 255% (left chart) and an IEO investment return of 493.2% (right chart).
- The IEO investment returns, however, present a mixed picture. 4 out of the 12 IEO tokens posted gains, with three hiking by more than 100%. Keep in mind though that this is due to the fact that IEO price is usually lower than the first exchange-traded price.
The following are the details of the IEOs launched by different exchange platforms with the date of IEO, coin issue amount vs total supply & the amount raised.
BINANCE (total raised $22.9 million):
Gifto — 21/12/2017 - 3.00% - $0.4million
Bread — 26/12/2017 - 7.90% - 0.8million
Fetch.AI — 02/03/2019 - 6.00% - $4.1million
BitTorrent — 03/02/2019 - 6.00% - $7.5million
Celer — 24/03/2019 - 6.00% - $4.5million
Matic — 24/04/2019 - 22.79% - $5.6million
HUOBI (total raised $8.1 million):
TOP — 26/03/2019 - 7.50% - $0.4million
Newton — 16/04/2019 - 7.90% - $0.8million
BITTREX:
VeriBlock — 02/04/2019 - 3.30% - $7.0million
OKEx:
Blockcloud — 10/04/2019 - 5.00% - $2.5million
BitMax
Dos Network — 11/04/2019 - 14.20% - $1.7million
Kucoin
Blockcloud — 03/04/2019 - 6.00% - $3.6million
It remains to be seen whether IEOs will rejuvenate the stagnating funding for the crypto projects or will it turn out to be another attempt in vain to avoid the bad reputation of ICOs.
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