It is already clear that in 2018 the number of funds raised through ICOs will significantly increase compared to the same period in 2017. The structure of investment has changed greatly, shifting towards large investors. In fact, what was conceived as a public crowd sale became a closed auction in which the most delicious pieces of the pie are grabbed by venture investors.
According to CoinSchedule statistics, in 2018, the amount of funds raised through ICOs is already in excess of $9 billion, while for the entire period of 2017 this figure was $5.7 billion. At the same time, the largest part of investments (about 84%) comes from large investors, according to Tokendata. This is not surprising as startups often make very profitable offers in closed tenders, and as a result, ordinary investors only have a minimal interest. What was conceived as a democratic public investment has, in many ways, changed its vector of development. "The fact is that the rules of the game become transparent, which attracts the same institutions, whose amount of funds cannot be compared with private crypto investors and enthusiasts. And the teams, in order to close the maximum caps, close the sales of tokens, and attract investments by offering institutions much more favorable conditions than at presales. In 2017, attracting large investors even at the stage before the announcement of a presale was not uncommon, and now it is a common practice. Everything is logical," as Pavel Matveyev, co-founder and CEO of the Wirex Crypto Bank, told DeCenter.
Scam or Not a Scam?
In 2017, the largest ICOs were Filecoin ($257 million), Tezos ($232 million), Bancor ($152 million), Polkadot ($140 million), and Quoine ($105 million).
Not everything is so sunny, however, as out of the 902 startups participating in the Bitcoin.com research, 276 failed to realize their project after raising funds. It is unclear whether these projects were scams or they simply "did not pull through,” but despite impressive figures of investment, the reputational issue still remains painful for the crypto industry. The amounts of funds already stolen by fraudsters using pseudo-ICOs is estimated in the millions of dollars. Although the exact amount of funds and projects that did not meet the expectations of investors is difficult to calculate because the data is very different. Obviously, the problem is ubiquitous and covers different branches of the economy.
On Twitter, users have long exchanged pictures that visually demonstrate projects that somehow differ from their claimed properties, being, if not a scam, then something very close to one:
Some describe their emotions after realizing that they have invested in a scam:
Of course, in many respects, such rapid growth in the number of ICOs this year is due to a number of factors and it is unlikely that something will change because of the scammers, but without them, the number of successful projects could be even greater, and the number of investments would multiply. "The influence of a scam and failure is always negative, there can be no other opinion. The problem is that private investors do not have the tools for professional and comprehensive evaluation of projects, unlike, for example, venture funds. Therefore, now, when the venture business has come to our industry, the level of scams should drop significantly on the one hand, and on the other, it is an occasion for private traders to think about whether it is worthwhile to invest in a project, which professional investors have rejected," concluded Pavel Matveyev.