The best way to plan ahead is to see those who have come before and follow in their footsteps. This is just as true in the ‘wild west’ world of ICOs as anywhere else: While the market begins to take genuine shape, new ICOs can learn from the best and worst that have gone before them.
This year has seen a sizable uptick in the new crowdfunding model, with some genuinely record-setting offerings being completed. Below is a list of the five top ICOs, and an examination of what each of them did right – or wrong – to give an overview of the key ideas that any start-up should be taking note of.
- Filecoin – Product Awareness
Between August and September, this mammoth offering raked in over $250 million in investments in a short time, with large-scale investments from notable venture funds like Union Square Ventures, Andreessen Horowitz, and the Digital Currency Group. Another impressive aspect of the ICO is that it remained fully SEC compliant by only allowing accredited investors to participate.
The success of this ICO is rooted in its product awareness. Filecoin’s founders saw a conceived of a blockchain-dependent platform that met a genuine need in a new and innovative way, and the idea of the decentralized InterPlanetary File System (IPFS) was a big hit with investors as a result.
- Tezos – Excellent Research
The Tezos ICO has come under fire recently, but nonetheless, the platform ranks second among the highest grossing ICOs of 2017. Tezos raised $232 million in July of this year as a platform designed to allow smart contract creation and be self-amending.
The Tezos offering was built around solid research: The company’s position paper and white paper are exemplary in their thoroughness and comprehensive treatment of both the technical detail and market position, and a quick scan of both documents is enough to convince investors of the platform’s value.
Tezos is unique among blockchain-based projects because it provides token holders the ability to approve protocol updates and fund them. The platform is able to mitigate scaling or development contention in the future before it appears.
- EOS – Innovative Approach
Built by the team at block.one, the EOS ICO is unique among most ICOs, in that the project has already raised an impressive $185 million, but is still open until the full 1 billion EOS tokens are sold, or until June 2018. The platform releases the tokens in batches of various sizes, with the most recent being 2 million. Most ICOs either cap time or tokens, whereas EOS allowed a hybrid of both.
The EOS platform is also unique because of its fundamental innovation: The team at EOS saw the limitations in Ethereum, and created a new blockchain platform that went beyond it in scope, giving developers the power to write Dapps in a variety of languages and connecting smart contracts with new and innovative systems, all while still maintaining the elegance and simplicity of the original. This thinking has catapulted the ICO into the headlines.
- Bancor – Awesome Team
The Bancor ICO had an excellent showing, raising $153 million in ether this June. The platform is a complex array of prediction and cryptocurrency marketplaces. Users are able to buy or sell the tokens instantaneously at stable prices, and the platform limits volatility, counterparty risk, and spread, while providing the benefits of liquidity that crypto-investors appreciate.
The Bancor ICO was driven by a stellar team. The protocol is governed by a foundation headed by Bernard Lietaer, and staffed by some of the most notable blockchain specialists and venture capitalist names in the business: team members include Tim Draper, the famous VC investor who has seen huge returns from Bitcoin investments, and Eyal Hertzog, the founder of the wildly successful Israeli startup Metacafe.
By reaching out to and selecting the appropriate team, Bancor put together an ICO that made investors sit up and take notice. A fantastic team inspires confidence in investor pools, and moves an ICO into the mainstream effortlessly.
- Status – Planning Ahead
The Status ICO has become something of a pariah for the industry as a whole. Beginning with flying colors, the Status ICO was conceived as platform to build a decentralized system for interacting with apps and users on the Ethereum network. Investors were so taken with the technology that they pounced on the ICO the moment it opened.
The stunning response from the market should not have been surprising, but Status (and Ethereum, for that matter) were not ready. One of the first investors dropped $8.5 million in ether, and the rest followed in similar fashion. Over $100 million was ultimately raised, and it took less than 24 hours.
The rush was so great that the company failed to prepare investors and a huge number were left out in the cold, with incomplete transactions and a huge backlog. The process almost shut down the Ethereum network entirely. That it didn’t is impressive, but the reality of the rush shows that Status failed to plan accordingly, given the initial substantial interest in the ICO. Had they planned accordingly, and divided the sale into parts or slowed the selling process, the now infamous hiccup would have been avoided.
It pays to learn from the past, and these five examples can help current ICO hopefuls to build platforms and strategies that will both protect them and their investors, as well as increase success.