The future of ICOs

[Dogezer]

Hey guys, want to share some thoughts on ICO Boom happening and how things may be different:
We see 3 scenarios:

1) Positive scenario — Market Matures: Things will continue to be as they are now, slowly improving over time. The ecosystem will mature, with more and more standards being established by all market players. These standards would become effective to differentiate scams from real projects, and they wouldn’t just be taking a marketing budget into account. Regulations enforced would be reasonable and would not prevent many from investing, while protecting their interests at the same time. Growth would continue, and more and more companies would finance their product through ICO. While all of this is possible, when looking at the current market situation, we believe chances for this scenario are quite low.
2) Neutral Scenario — Market Crash: While for many a market crash is not a good thing, this might be exactly the thing needed to help clean up the ICO space and make it more fair, clear and reasonable. At some moment, when one of these “huge valuation” ICO coins is completely dumped investors would start to re-evaluate their positions, causing a domino effect for multiple coins. In this case, the ICOs would return to collecting much lower sums, as it were a few months ago. The market would be cleaned up and a few years later it would return in a more organized fashion. Such a crash is possible, but is not very likely. The growth of interest to cryptocurrencies happening around the world brings new uneducated investors and a constant influx of money will not give the market a chance to clean itself up until the money stops flowing in. In this scenario, the later the fall happens, the longer it will take for technology to recover trust and return in better shape.
3) Negative scenario — Competition of Marketing Budgets: As the ICO market gets more and more attention from all of the players, it would become quite a crowded space. The daily number of ICO projects would be too much for a regular person to digest, and the success of ICO will mostly depend on a marketing budget investment. Higher marketing budgets wouldn’t protect from scam projects, they will just improve in quality. Most of the investors wouldn’t be seeing a lot of return on their dollar, but an ongoing influx of new participants and hype would eventually convert the ICO ecosystem into something completely different. Eventually the budget to raise money on ICO for a product would be pretty comparable with the amount of money raised, closing the possibility for a talented tech team to raise money for their really innovative products.


It seems that the market is following negative scenario. The total cost of “regular” publishing on multiple ICO trackers (we have a list of around 50) is somewhere near $30K, and “premium” placement on multiple trackers can easily eat a $100K USD budget. Bitcointalk.org is full of offers to push your topic to the top for a half of BTC per week, completely ruining the logic of forum. This is still somewhat acceptable for now, but as prices grow, it will cease to make sense. For projects where the main expense is software development (and plenty of these doing ICOs), investing money into the actual product would be a much better deal. We at https://dogezer.com are building infrastructure to change the ICO market - actually we want people to ask a question for each ICO - why you don't want to do your project at dogezer? I feel this will remove some of these scam projects completely.

Thoughts, comments?

[coin_coin]

As you said, I like to invest money into the actual product would be a much better deal.
You named your ico to ITO, it doesn't matter, I don't care the name , what about your product?

[Hamphser]

As you said, I like to invest money into the actual product would be a much better deal.
You named your ico to ITO, it doesn't matter, I don't care the name , what about your product?

This is actually my main indications when i do tend to invest on a certain ICO on which i would able to see an actual product of it because mot likely this projects would succeed but its not guaranteed but somehow do have higher chances to progress.

[maurobiasolo]

I wouldn't worry about the ICOs number: investors will focus on specific industries. The same happens with startups: how many new projects are there every day? Simply a lot and investors can only check few of them.
Also, ICOs' managers will probably select only a few channels to publish their projects (edging costs with visibility, community match, chance of success).

[Dogezer]

As you said, I like to invest money into the actual product would be a much better deal.
You named your ico to ITO, it doesn't matter, I don't care the name , what about your product?

This is actually my main indications when i do tend to invest on a certain ICO on which i would able to see an actual product of it because mot likely this projects would succeed but its not guaranteed but somehow do have higher chances to progress.

Fully agree on a product. Here is a video of our product - https://www.youtube.com/watch?v=74sr15hbKso&t=1s
Functional alpha would be available to public to create projects before ITO (Before nov 15th). If it wouldn't be there - don't participate in our ITO.

Technically we can launch product in 1-2 weeks, we worked for a year to have it done, but decided to do that after preITO (which will start in a few days) as we feel we need to understand all bits and pieces on how this ICO market works and get right attention at right moment of time.

[Dullmartini]

I'm not sure I really agree. There are already too many icos for a normal person to digest. I only follow at most 2-3 at a time. What will happen most likely is that people who want to invest will get to know an industry or two and pick what to invest in. I think that would be great. It would be the converse to what you describe with battle of marketing budgets. As people specialize in an area or two they will be able to better judge icos, and not just pick the ones that have a lot of marketing. I think unfortunately that is happening now. Lots of people throw money into an ico because of slick marketing without knowing anything about the project

[greyeye]

some ICOs (I didnt check all) are now blocking US, Singapore and prob some more countries.
ICO are high risk speculations, government still would like to regulate and IPO/ICO will, I guess block them more and more.
There is a news that Chinese gov will regulate ICO as well.

so good news? may be less ICO (less country = less participant) and some ICO may try to get under regulation and offer on these countries.
bad news? more high risk ICO and ppl lose more fiat.

not sure which side its going to fall, but its still wild west and will be for a while.

[maurobiasolo]

some ICOs (I didnt check all) are now blocking US, Singapore and prob some more countries.
ICO are high risk speculations, government still would like to regulate and IPO/ICO will, I guess block them more and more.
There is a news that Chinese gov will regulate ICO as well.

so good news? may be less ICO (less country = less participant) and some ICO may try to get under regulation and offer on these countries.
bad news? more high risk ICO and ppl lose more fiat.

not sure which side its going to fall, but its still wild west and will be for a while.

Well, in most cases they block some countries only to comply with local laws but then they add that it's actually impossible to know where the money come from ... :-)

[Dogezer]

I'm not sure I really agree. There are already too many icos for a normal person to digest. I only follow at most 2-3 at a time. What will happen most likely is that people who want to invest will get to know an industry or two and pick what to invest in. I think that would be great. It would be the converse to what you describe with battle of marketing budgets. As people specialize in an area or two they will be able to better judge icos, and not just pick the ones that have a lot of marketing.

It is a positive scenario, and specializing on one area is probably a reasonable behavior for investor. A full-time investor can really dig for new rock starts and do due diligence of all products in his area for a good educated choice. But people who are part time investors, people with interests in multiple areas - what would they do? They will just follow the marketing unfortunately, and the scams are the ones which will have the best marketing.

I think unfortunately that is happening now. Lots of people throw money into an ico because of slick marketing without knowing anything about the project

This is exactly my point and so far i don't see it becoming better.

[HotelChain]

2) Neutral Scenario — Market Crash: While for many a market crash is not a good thing, this might be exactly the thing needed to help clean up the ICO space and make it more fair, clear and reasonable. At some moment, when one of these “huge valuation” ICO coins is completely dumped investors would start to re-evaluate their positions, causing a domino effect for multiple coins. In this case, the ICOs would return to collecting much lower sums, as it were a few months ago. The market would be cleaned up and a few years later it would return in a more organized fashion. Such a crash is possible, but is not very likely. The growth of interest to cryptocurrencies happening around the world brings new uneducated investors and a constant influx of money will not give the market a chance to clean itself up until the money stops flowing in. In this scenario, the later the fall happens, the longer it will take for technology to recover trust and return in better shape.
3) Negative scenario — Competition of Marketing Budgets: As the ICO market gets more and more attention from all of the players, it would become quite a crowded space. The daily number of ICO projects would be too much for a regular person to digest, and the success of ICO will mostly depend on a marketing budget investment. Higher marketing budgets wouldn’t protect from scam projects, they will just improve in quality. Most of the investors wouldn’t be seeing a lot of return on their dollar, but an ongoing influx of new participants and hype would eventually convert the ICO ecosystem into something completely different. Eventually the budget to raise money on ICO for a product would be pretty comparable with the amount of money raised, closing the possibility for a talented tech team to raise money for their really innovative products.

I think that you should change scenarios names - Neutral scenario is for competition between marketing budgets and negative scenario is for market crash. As it seems we are already at the stage of marketing budget competition: regular investor is oversupplied with ICOs offers and it becomes harder for him tochoose investment. The negative scenario will come in 6-10 months when most of ICOs will be unable to pay-out promised returns and the market will crash. Now it is a one-way ticket market - investing without return. ICO bubble is growing.

As for OP, good thread and well organised attempt of product placement. I got acquainted with another pre-ITO

[Dogezer]

I think that you should change scenarios names - Neutral scenario is for competition between marketing budgets and negative scenario is for market crash. As it seems we are already at the stage of marketing budget competition: regular investor is oversupplied with ICOs offers and it becomes harder for him tochoose investment. The negative scenario will come in 6-10 months when most of ICOs will be unable to pay-out promised returns and the market will crash. Now it is a one-way ticket market - investing without return. ICO bubble is growing.

I feel that long term crash is a good thing for the market (of course bad for individual investors), that is why it is 'neutral'. 'Neutral' is probably not the right word - it is short term negative, long term positive, but i wasn't able to come out with better name. I feel crash may be like 2000 dotcom bubble burst which removed all these crazy pets.com, leaving only these who really have skills, passion and have some idea on what they are doing.

And we are in 'marketing competition phase' - recently noticed one quite popular ICO which collected >1m on preICO and targeting to raise 60+m in upcoming month, where 15% of funds will go towards marketing of that ICO itself. It is quite hidden under the hood with beautiful words, multiple names and diagrams, but if you will sit with pen and paper - every 6th/7th investor brings them money to involve more investors. No one called these folks scam so far. People are in love with them - which i guess because of the marketing budget. I don't even sure how to compete with guys like these.

As for OP, good thread and well organised attempt of product placement. I got acquainted with another pre-ITO

Thank you! Hope description of our solution was an interesting read.

[Dogezer]

some ICOs (I didnt check all) are now blocking US, Singapore and prob some more countries.
ICO are high risk speculations, government still would like to regulate and IPO/ICO will, I guess block them more and more.
There is a news that Chinese gov will regulate ICO as well.

so good news? may be less ICO (less country = less participant) and some ICO may try to get under regulation and offer on these countries.
bad news? more high risk ICO and ppl lose more fiat.

not sure which side its going to fall, but its still wild west and will be for a while.

Regulations are needed on the market. Because in other case ICO authors propose some crazy schemes, like paying dividends to token holders from their fiat earnings (which is just not possible legally or require huge expenses). And it is hard to compete with these guys with more technological solutions (like in our case we define the behavior of our token in smartcontract). Eventually regulations will be everywhere, and answering one of the previous posters - that is why we are doing ITO, not ICO. We are selling app token, not a security, we come with a strong legal support and we believe we pass Howey test - so we believe we should be fine when these regulations will be in place everywhere.

These who sell coins, promise buybacks, dividends, ownership, etc are putting themselves, and money of their investors at risk. Eventually regulations would be enforced in most of the countries - and i feel many countries will apply that both to new and OLD ICOs. How people would be dealing with that other than dropping their promises and saying this all was just a game - have no idea.

[jerkoin]

Well if regulated in a good way, it could be better than the way it's currently is because someone hiding under bed can now easily launch an ICO within a few seconds or so. By good regulations, I meant to say if done in a way where ONLY promising ideas would be able to launch ICOs and prove the success of their proceeds post their ICOs.

[MattHoo]

Some people like invest real products but some other people would like to invest in cryptocurrencies. And some ICOs are based on cryptocurrency blockchain. It is a way to get easy money with high risk. Easy money and spectacular growth will attract bad boys. Be absolutely sure the site or forums or accounts you use are the real ones.

[greyeye]

Some people like invest real products but some other people would like to invest in cryptocurrencies. And some ICOs are based on cryptocurrency blockchain. It is a way to get easy money with high risk. Easy money and spectacular growth will attract bad boys. Be absolutely sure the site or forums or accounts you use are the real ones.

I've seen some ICO's that's nothing to do with Crypto, but just using it to fuel their business venture.
Nothing wrong with that, but some business will fail, and some will boom.

Now the China has initiated on the crack down on ICO, its going to be fun to watch "licenced" ICO will appear on the market too. (better payback/buyback? better business models?)

[dsertov]

Do you think that with the increasing legal restrictions in several countries like the U.S. China Hong Kong will just force diversion of that capital to ICOs in other countries? How would the governments track people's participation in ICOs when they shouldn't have access to their cryptocurrency wallets?

[devollito]

Look at ethlend. It has a good team and the apps is running already. If you like to invest in some token you need to buy this token. Because if you need somecash. You can borrow a ethereum with your token as collateral. And you dont need to sell your token.

[gedor]

I think we will see each one of these 3 scenarios in the future. It's already very difficult for an ordinary project to be raised with initial coin offering. I think this is better for the future of market.

[GoodLad]

Do you think that with the increasing legal restrictions in several countries like the U.S. China Hong Kong will just force diversion of that capital to ICOs in other countries? How would the governments track people's participation in ICOs when they shouldn't have access to their cryptocurrency wallets?

Yes, that's the problem. Government for obvious reasons want to centralise the market that is meant to be decentralised. Since they can't find a good way of doing it, they just start forbidding ICOs.
The bad thing about this is that the threat of an early ban of ICOs in the country causes scammers to work in two shifts as they have less and less time to gain money every day.

[greyeye]

Do you think that with the increasing legal restrictions in several countries like the U.S. China Hong Kong will just force diversion of that capital to ICOs in other countries? How would the governments track people's participation in ICOs when they shouldn't have access to their cryptocurrency wallets?

I believe ICO will come out "better" to match regulations in the future, until then its wild west of guessing game and any ICO token can be worthless if the business shuts or run away.