A new study by experts of consulting company Satis Group showed that 80% of the ICO are part of fraudulent schemes. In addition, only 8% of tokens distributed through the primary offer, enter the exchange.
For your project, Sherwin Daulet (Sherwin Dowlat) and Michael Hodapp (Michael Hodapp) has selected the ICO, have passed the full cycle from the white paper to trading, with a minimum market capitalisation of 50 million USD. As a result, the authors established a new method of classification ICO. They identified six categories: the Scam, a failure of the ICO, “dead” ICO ICO on the verge of exhaustion, hopefully ICO and successful. Further in the text of the study said, “Based on this classification, we came to the conclusion that ~81% of the projects were false, ~6% failed, ~5% ICO was frozen and ~8% left on a stock exchange”.
Under the ICO, convicted same specialists mean “any projects, involving investment via the ICO (extending the offer through websites, forums, or social media with links to the project) and does not comply with obligations under the disposal proceeds and/or admitted fraud by members of the communities (forums, sites, etc.)”. At first glance, the definition seems pretty vague. However, very few studies took into account the views of users, and, probably, the authors tried to overcome.
Failure of ICO in this classification are considered “projects successfully brought together the necessary funds, but have not completed the following steps with the subsequent closing and/or reimbursement to investors of their investments as a result of insufficient investment.” Dead ICO also successfully passed the stage of primary charges and other, “however, failed to qualify for exchange-traded and did not receive proposals to update the code on GitHub within three months after the closure of the ICO”.
“Exhaustion” ICO involves the successful completion of all stages, as well as transparent development plan and proposals by the code on GitHub for the three months without fulfilling one of the conditions for a successful launch: completed (or at least in beta version) development of a circuit or a distributed registry (if we are talking about the basic Protocol), or the development of special areas (in the case of integrated tokens for applications or tokens in General use). In turn, promising to ICO, you need to meet two conditions, a successful full compliance with the above criteria.
Claiming that they “will continue research in this area and will present many in-depth works in the coming months”, researchers came to a deeper level of their own findings. “Of the 8% of projects with a market capitalization above $50 million, released to the stock exchange, ~47% were successful, ~20% were promising, and ~34% were on the verge of exhaustion. Of tokens with a market capitalization between $50 — $100 million (the niche with the lowest capitalisation) ~24% successful ~22% promising projects and ~54% was on the verge of exhaustion”.
This is not the first large-scale analysis of ICO, however, the previous studies have been less negative. So, at the end of February, the site Bitcoin.com found that about 46% of ICO 2017 listed on TokenData, failed.