📕📙📗Guidebook for ICO organizers and ICO investors📗📙📕

[Schwarzenberg]

"No human investigation can be called real science if it cannot be demonstrated mathematically".
Leonardo da Vinci

Contents:

1.   Introduction
2.   Parameters characterizing ICO
     a.   Referring Domains
     b.   Backlinks
     c.   Traffic
     d.   Declared Cap
     e.   Messages on Bitcointalk
3.   A few words about semantic differentials and connotative meanings of texts
     a.   Potency Parameter
     b.   Activity Parameter
     c.   Evaluation Parameter
4.   Additional information for investor
5.   «Icing on the cake»
6.   Conclusion


1. Introduction

As on the end of 2018, an average of 200-250 new ICOs (Initial Coin Offering) start every month in the world. The data from ICO Catalog shows that 222 new ICO projects started in August 2018, in September – 263 projects, in October –190 new ICOs. Every day investors review a list of around 400 active ICOs where they can invest their funds. Surely, comparing to stock market with thousands of shares appearing each day, ICO market is rather small. However, evaluating even 400 ICO projects basing just on White Paper, personal experience and ambiguous “ratings” is pretty challenging. Strictly speaking, still-developing ICO market currently does not have a tool, which could allow analyzing large amount of data and making right investment decisions basing on such analysis.

The success analysis of already ended ICOs considering their characterizing parameters is also important for organizers on new ICOs. It allows determining the values of range of target parameters for the upcoming ICO. Complying with such parameters within certain limits increases the chances of final success for ICO project. It is understood that the idea of a new project, correct White Paper and the project team are important too. Nevertheless, the appropriate management of additional ICO parameters also increases the success level of the project. Needless to say, that not taking into account parameters most likely to be considered by potential investors during the project implementation is at least unwise.  

The ICO market is at the beginning of the journey, which the stock market once passed. The evolution of stock market brought us to the tools provided by technical analysis, which allows automatically analyze large amounts of initial information, select the most interesting objects for investment and, if necessary, examine them in more detail in manual mode. It is safe to say that the ICO market eventually will come to exactly the same technical analysis as the stock market. Only the source data used for the analysis will differ.

Yet there are certain issues with the initial data for ICO market analysis.  Overwhelming majority of existing ICO ratings (ICObench, ICO Rating, ICO Alert etc.) provide a standard set of information for new ICOs: ICO start and end dates, White Paper, team, declared hard cap and in some cases, personal evaluation/rating of ICOs. It is rather problematic to make a decent investment decision relying only on such data. ROI data and the amount of funds raised during ICO, which is information on success/failure of ICO, is published on some resources (ICO Drops, ICO Data) only after the ICO has ended and it is too late to invest. So, is it impossible to evaluate the ongoing ICO or to set certain target parameters for your own upcoming ICO?
No, there is a way.


2. Parameters characterizing ICO

Ask yourself, what ICO characterizing parameters is it possible to acquire while the project still goes on? It turns out that quite a number. For each ICO we can acquire:

     •   The number of backlinks leading to the project;
     •   The number of referring domains;
     •   The number of referring IPs;
     •   Evaluation of search traffic.

Using SEO-services like SemRush and Ahrefs we can get a span of additional parameters for any ICO site, including the sources of the search traffic by countries, the amount of paid advertisements, the search results position of the ICO site and many more. Thus, we can get the values of a sufficiently large number of parameters for any ICO site that, potentially, can affect the success / failure of the ongoing ICO. Moreover, for most of these parameters, it is possible to obtain the dynamics of their changes over time.

As the great Leonardo da Vinci wrote, «No human investigation can be called real science if it cannot be demonstrated mathematically». Let us apply this reasoning in practice and try to assess the influence of parameters, which we can obtain, on the success level of ICO. It sounds a bit difficult, but in fact, we will calculate the correlation coefficient between each of our parameters and the ICO success criteria. As ICO success criteria, we choose:

     •   Percentage of announced Hard Cap, raised during ICO;
     •   The total amount of funds in USD, raised during ICO;
     •   Income (ROI), which investors gained form the ICO.

Surely, instead of separate criteria characterizing the success of ICO, we could use single criterial function. However, creating such function is beyond the scope of the study. The objective of our research is identification of possible existing correlations between data available for ICO analysis and final indicators of its success.


a. Referring Domains

To be honest, at the beginning of the analysis of the available data on more than 1000 completed ICO projects, we were quite ready for the result to be a set of randomly scattered points on the graphs. A sort of «white noise». We would consider ourselves lucky if we noticed separate clusters in this white noise, indicating the presence of at least weak dependencies between the parameters characterizing ICO and its financial results. Reality exceeded all expectations.


Pic. 1. Dependence of the amount of funds raised during ICO (as percentage of the declared ICO Hard Cap) on the number of domains referring to the ICO website.

The diagram at pic. 1 demonstrates the dependence between declared Hard Cap percentage of funds raised during ICO and the amount of domains referring to the ICO website. On the horizontal axis the data is divided according to groups of ICOs:

     •   ICOs with websites having 1-50 referring domains;
     •   ICOs with websites having 51-100 referring domains;
     •   And so on to the ICOs group with websites having 451-500 referring domains.

The vertical axis shows the average declared Hard Cap percentage of funds collected by each group of ICOs. The size of the yellow circles shows the average amount of money in millions of USD raised by ICOs from each group.  The trend line is drawn in blue.

The announced Hard Cap percentage of the collected funds shall be considered as a main parameter characterizing success of ICO.  The total amount of funds collected during ICO shall be considered as an additional success parameter.

Picture 1 clearly demonstrates almost linear dependency between the success of ICO and the number of domains referring to ICO. There is a sharp spike in success level in the range of the ICOs group with websites having 300-350 referring domains. For ICOs with websites having more than 300-350 referring domains there is about 25% jump of the success level. Also, it is easy to see that ICOs from groups with 300-400 referring domains are marked by greater total amounts of funds collected.

A short intermediate conclusion for ICO organizers based on the analysis of the diagram at pic.1 – increase the number of issue-related domains referring to your ICO project website. The optimal amount is 300-400 referring domains. These are not just empty theoretical investigations of marketing managers without proper math education, but bare results of analysis of a large amount of statistical data from the wide range of successful, not that successful and failed ICOs. Perhaps later the state of things will change. However, as on the end of 2018 the situation is as you see it in pic. 1.

A short intermediate conclusion for ICO investors based on the analysis of the diagram at pic.1 – before putting money in ICO, pay attention to the number of domains referring to the project website. There is a straight linear dependency between the success of ICO and the number of domains referring to that ICO. When the number of domains referring to the ICO website exceeds the number of 300-350, the potential success of the project additionally increases by 25%.


b. Backlinks

The results of previous research made us hope that dependence of the ICO success on the total number of backlinks to the ICO website will have similar look.


Pic. 2. Dependence of the amount of funds raised during ICO (as percentage of the declared ICO Hard Cap) form the number of backlinks to ICO website.

However the graph at pic. 2 looks more «blurred». On horizontal axis on pic. 2 the data is divided according to groups of ICOs just like on pic. 1:
     •   ICOs with websites having 1-100 backlinks;
     •   ICOs with websites having 101-200 backlinks;
     •   And so on to the ICOs group with websites having 901-1000 backlinks.

The vertical axis shows the average declared Hard Cap percentage of funds collected by each group of ICOs. The size of the yellow circles shows the average amount of money in millions of USD raised by ICOs from each group.  The trend line is drawn in blue.

[Schwarzenberg]

Part 2.

Although the general trend towards an increase of the success along with the growth of the average number of backlinks to ICO website is visible, the graph looks less clear than in case with referring domains. What is the reason? There are several reasons why ICO success dependency on the number of backlinks differs from success dependency on referring domains:

     •   Linking trash on the issue-related website. Posting on the relevant websites inappropriate, from SEO point of view, articles with several links to the ICO. Technically, the number of links to the ICO grows. But the increase of the target traffic of ICO website is not proportional to the number of backlinks;
     •   Linking trash on the non-relevant websites. Posting on the irrelevant websites inappropriate, from SEO point of view, articles that are not related to the ICO theme but still contain a couple of links to the project. Technically, the number of backlinks to the ICO grows. But there is no increase in target traffic;
     •   Linking trash in profiles, social media, etc. Backlinks from mostly irrelevant resources, purchased just to increase their number. Technically, the number of backlinks grows. However, there is almost no increase in target traffic. There is a chance of search results pessimization from Google ‘s part.
Surely, not all ICO projects are known to abuse worthless backlinks. But projects taking advantage of purchasing poor-quality backlinks are the reason why diagrams on pic.1 and pic.2 are not totally identical.

The analysis of pic. 2 shows that despite all the «noise» in the data, there is a dependency manifested in the growth of ICO success along with the increase of the number of backlinks. In the range of the ICOs group with websites having 500-600 backlinks, there is a jump of the success level. It should be noted that ICOs from groups with websites having 500-1000 backlinks are marked by greater total amounts of collected funds.

A short intermediate conclusion for ICO organizers based on the analysis of the diagram at pic.2:

     •   Increase the amount of backlinks from issue-related websites for your ICO project;
     •   The optimal amount is 600-900 backlinks;
     •   Do not purchase “trash” backlinks –positive result shall be really low. There is a risk of pessimization of your project in search results.

A short intermediate conclusion for ICO investors based on the analysis of the diagram at pic.2– pay attention to the number of backlinks for ICO project before investing. There is a correlation between the level of ICO success and the number of backlinks to its website. When the number of backlinks exceeds 500-600, the potential success of the project additionally increases by 10%.


c. Traffic

It is expected that the higher the traffic of ICO website, the more successful ICO should be. The diagram in pic. 3 clearly confirms this.


Pic. 3. Dependence of the amount of funds raised during ICO (as percentage of the declared ICO Hard Cap) on the daily traffic of the ICO website.

The diagram above demonstrates dependence between declared Hard Cap percentage of funds raised during ICO and estimated daily traffic on the ICO website. On the horizontal axis the data is divided according to groups of ICOs:

     •   ICO sites with daily traffic rated from 51 to 100 visitors;
     •   ICO sites with daily traffic rated from 51 to 100 visitors;
     •   And so on to the ICOs group with daily traffic rated from 1001 to 1050 visitors.

The vertical axis shows the average declared Hard Cap percentage of funds collected by each group of ICOs. The size of the yellow circles shows the average amount of money in millions of USD raised by ICOs from each group.  The trend line is drawn in blue.

It should be noted that the diagram in picture 3 presents estimates of the traffic that came on the ICO sites from the Google search results. The vast majority of ICO projects hide their access counters, but it is still possible to get estimate values of the daily traffic coming on those counters.

It is well-known that the higher the website traffic is the more tokens are sold during the ICO. But in our opinion this fact is still worth mentioning.


d. Declared Cap

The relation between the ICO success and the level of “greed” of its organizers is also rather interesting. We are talking about the dependence of ICO money rising success on the size of its declared Hard Cap.


Pic 4. Dependence of the amount of funds raised during ICO (as percentage of the declared ICO Hard Cap) from the amount of Hard Cap.

The diagram above demonstrates dependence between declared Hard Cap percentage of funds raised during ICO and the amount of Hard Cap. On the horizontal axis the data is divided according to groups of ICOs:

     •   ICOs with declared Hard Cap from 1 to 8 million USD;
     •   ICOs with declared Hard Cap from 8 to 16 million USD;
     •   ICOs with declared Hard Cap from 16 to 24 million USD;
     •   And so on to the ICOs group with declared Hard Cap from 160 to 168 million USD.

The vertical axis shows the average declared Hard Cap percentage of funds collected by each group of ICOs. The size of the yellow circles shows the average amount of money in millions of USD raised by ICOs from each group. The trend line is drawn in blue.

The tendency to reduction of the ICO success along with an increase of the declared Hard Cap amount is clearly visible. Starting with Hard Cap level of 72-80 million USD, ICO organizers should consider themselves lucky if they manage to raise at least 15% from declared target amount. Of course, there were and there are exceptional cases of successful ICOs with large Hard Cap. However, such exceptions only prove the rule. The data, presented in pic. 4 represent that quite well.

A short intermediate conclusion for ICO organizers based on the analysis of the diagram at pic.4– do not practice upon unreasoned overvaluation of Hard Cap amount. Declare the amount you really need for your project. The smaller the amount of the Hard Cap announced, the more likely it is that your project will actually collect it. The chances for successful ICO dwindle with the increase of Hard Cap. Exceeding the size of the Hard Cap value of 72 million USD almost certainly means failure for most ICOs. Try keeping your Hard Cap between 2-40 million USD.

A short intermediate conclusion for ICO investors based on the analysis of the diagram at pic.4– take a look at the Hard Cap amount of the project before making investment decisions. Try investing in ICOs with Hard Cap amount not exceeding 50 million USD.


e. Messages on Bitcointalk

The user activity on content-based websites, caused by certain ICO, is also a significant parameter in ICO estimation. In this research were used statistics of messages posted by users in official topics of analyzed ICOs on Bitcointalk.org website. Surely, it would be nice to engage statistics from other resources (Telegram, etc.), allowing users to comment on specific ICOs. But it went beyond the scope of this study. Perhaps, data analysis from other channels will become the topic of new research on technical analysis of ICOs.


Pic. 5. The dependence of the amount of funds raised during ICO (as percentage of the declared ICO Hard Cap) on the number of messages in the official ICO topic on Bitcointalk.


Diagram in pic. 5 illustrates dependence of declared Hard Cap percentage of funds raised during ICO on the number of messages in the official ICO topic on Bitcointalk. On the horizontal axis the data is divided according to groups of ICOs:

     •   1-200 messages in the ICO topic;
     •   201-400 messages in the ICO topic;
     •   401- 600 messages in the ICO topic;
     •   And so on to the group of ICOs, with 3201-3400 messages in their topics.

The vertical axis shows the average percentage of collected funds for each group of ICOs from the number of messages. The size of yellow circles on the diagram illustrates average amount of funds in millions of USD raised by ICOs from certain group. The trend line is marked in blue.

There are three zones in the diagram. In zone from 201 to 1000 messages, there is a tendency for decrease of ICO success level along with the growth of the number of messages. In zone from 1001 to 2200 messages, there is a tendency for the increase of ICO success level. In zone of more than 2200 messages along with decrease of ICO success level, there is also a decrease in the average amount of the money collected during the ICO. Of course, everyone understands that the number of messages in the official ICO topic does not always correctly characterize the real activity of users. Often there are a lot of custom-made comments in the topics, which are ordered and paid by the organizers of the ICO. This blurs the analyzed data. However, it is still possible to make some basic conclusions relying on this data.

A short intermediate conclusion for ICO organizers based on the analysis of the diagram at pic.5 – certainly, it is necessary to imitate some user activity in the official topic of a new ICO. Ordering paid comments within reasonable limits of 50-100, in the first days of ICO is rather insightful. But to go to extremes and order comments in the hundreds and thousands is a bad idea. When the number of comments exceeds 2400-2600 users get carried away from the subject and ICO success level goes down. The number of messages in the official ICO topic is a secondary parameter of the project success evaluation but it definitely has a certain impact.

A short intermediate conclusion for ICO investors based on the analysis of the diagram at pic.5– it makes sense to avoid ICOs with more than 2400-2600 messages in their official topic. If such ICOs seem an attractive investment for some reason, one should study them more careful than the rest of the projects.

[DaCryptoRaccoon]

Amazing write up I will be sure to send you some merit for this once I have some more available,

I guess the key factor now in ICO's is to advertise and have linking domains to the ICO.
I noticed a lot of people reaching out to professional advertising and marketing company's for this purpose and many of the ICO calendar  sites too. 

[Schwarzenberg]

Part 3.

3. A couple of words about semantic differential and connotative meaning of texts

Now the fun begins. The attitude towards security services is rather ambiguous all over the world. Some consider them defenders of fundamental human values and rights, fighters against the world’s evil. Others, on the contrary, consider security services the main violators of fundamental rights, trying to monitor everything they can in order to put all the processes in society under control. We will try to use a part of the tools used by the special services for “peaceful purposes”.

A well-known American system Prism, used by the USA security services, is designed among other things for automatized monitoring of public mood in the Internet. 24 hours a day, Prism collects user comments on a large number of indicative (that is, for whatever reasons, currently relevant) topics from all open sources. And analyzes the attitude of users to these indicative topics. Interested people can study in more detail everything connected with the semantic differential and connotative meanings of texts. We will briefly explain the essence.

Each word, used in writing or orally, except for the usual and well-known meaning, also has the so-called connotative meaning. A whole set of connotative meanings, to be more precise. Connotative meanings can characterize a person’s real attitude to a topic, show how much person is interested, and reveal how much a topic induces to actions. In total, more than 20 different parameters describing the attitude of a person to the commented topic can be analyzed. User could comment on topic «The USA Democratic Party» something like that: «The Democratic Party – is the best party in this country! Democrats are our future. I wish to join democrats right now. Nothing can be better that Democratic Party. Democratic Party forever! ». Technically the text suggests that the user is keen on democrats. But analysis made with regard to exactly which words and in what order were used to express these thoughts can show that a person is not crazy about democrats at all. And even ready to do some harm to the democrats on occasion. Thus, the analysis of connotative meanings of words using the semantic differential technique allows us to reveal the true attitude of a person to the subject.

With the help of such a comprehensive analysis security services monitor, among other things, revolutionary sentiments in society. At the moment we are not interested in monitoring the public image of power in the countries of the Middle East and the degree of revolutionism in the countries of South America. But the implementation of semantic differential for the analysis of investors’ real attitude to current ICOs sounds intriguing. The described method fits perfectly for our purpose.

The above-mentioned ICO Catalog collects users’ comments on current ICOs 24 hours a day and then analyzes each ICO by three parameters:

     •   Evaluation – users’ attitude to ICO on a scale from -3 (the most negative attitude) to +3 (the most positive attitude);
     •   Activity – shows willingness of users to take any actions related to this ICO (to buy token, to leave a comment on forum, etc.) on a scale from -3 to +3;
     •   Potency – shows how much users are interested in ICO on a scale from -3 (minimum interest) to +3 (maximum interest).
Having processed a huge array of statistical data, containing Evaluation, Activity and Potency parameters, collectively forming a group of so-called EAP-parameters, we obtained interesting data, which turned out to be nothing like “white noise”.


a. Potency Parameter

Let us start from Potency, the last parameter.


Pic. 6. The dependence of amount of funds raised during ICO (as percentage of the declared ICO Hard Cap) on Potency parameter.

Diagram in pic. 6 illustrates demonstrates dependence between declared Hard Cap percentage of funds raised during and Potency parameter. On the horizontal axis the data is divided according to groups of ICOs:

     •   Potency parameter is within the range of -0,06 to -0,05;
     •   Potency parameter is within the range of -0,05 to -0,04;
     •   Potency parameter is within the range of -0,04 to -0,03;
     •   And so on to the group of ICOs, with Potency parameter within the range of 0,11 to 0,12.

The vertical axis shows the average percentage of collected funds for each group of ICOs from the number of messages. The size of yellow circles on the diagram illustrates average amount of funds in millions of USD raised by ICOs from certain group. The trend line is marked in blue.

As expected, ICOs with Potency less than -0,02 did not raise even 10% of their Hard Caps. The total amounts of collected funds in US dollars for such ICOs are also characterized by small values. The success level of ICOs with Potency parameter exceeding -0,01 can be widely interpreted. However, the pattern of consistently high ICO success for high values of the Potency parameter is clearly visible. The total amounts of collected funds for ICOs with high Potency also have tendency to increase along with the growth of Potency parameter.

A short intermediate conclusion for ICO organizers based on the analysis of the diagram at pic.6 – organizers can’t directly influence the potency parameter, as it reflects the true interest in the ICO. However, reduction of Potency value to the level less than -0,01 during ICO is a serious indicator for making changes in the marketing campaign. It is a sign of lack of interest in ICO project and close a call that ICO may not raise even 10% of the announced Hard Cap.

A short intermediate conclusion for ICO investors based on the analysis of the diagram at pic.6 – study the Potency graph of ICOs at ICO Catalog and avoid investing in projects with average Potency parameter remaining less than -0,01 for a long time.


b. Activity Parameter

Certainly, Potency parameter characterizing the real interest of the audience in ICO is the most important among other EAP-parameters. The Activity parameter, belonging to the same group and characterizing the willingness of users to take actions related to the analyzed ICO, gives a vaguer picture. First of all, it’s because activity does not always reflect willingness to buy tokens. Desire to show some ICO-related activity may also manifest in the intention to leave a post in the ICO topic (not always positive, by the way), or closing the page with ICO description – the variability of the possible activity is quite high.


Pic. 7. The dependence of amount of funds raised during ICO (as percentage of the declared ICO Hard Cap) on Activity parameter.

Diagram in pic. 7 illustrates dependence between declared Hard Cap percentage of funds raised during ICO and Activity parameter. On the horizontal axis the data is divided according to groups of ICOs:

     •   Activity parameter is within the range of -0,07 to -0,06;
     •   Activity parameter is within the range of -0,06 to -0,05;
     •   Activity parameter is within the range of -0,05 to -0,02;
     •   And so on to the group of ICOs, with Activity parameter within the range of 0,17 to 0,18.

The vertical axis shows the average percentage of collected funds for each group of ICOs from the number of messages. The size of yellow circles on the diagram illustrates average amount of funds in millions of USD raised by ICOs from certain group. The trend line is marked in blue.

Probably, for a more detailed analysis of the diagram shown in pic. 7, it is necessary to use additional filters and conditions imposed on the initial data used for the analysis. Another option is using the cumulative parameters, constructed based on combinations: [Activity, Potency], [Activity, Evaluation] or [Activity, Potency, Evaluation].

For ICO organizers we can give cautious recommendation to keep track of Activity parameter during ICO and if it drops below -0,08, carefully make some corrections in the marketing campaign. Of course, from the graph in pic. 7 it does not follow that a low value of the Activity is expressly bad. However, the lack of desire even to write in the ICO topic is also difficult to call a good thing.

Short hint for ICO investors: as for the Activity parameter, it should also be recognized that it, apparently, is also a secondary parameter and should be considered in conjunction with other ICO parameters.


c. Evaluation Parameter

Strangely enough, the Evaluation parameter, which characterizes the real attitude of users to the ongoing ICO, gives the most unexpected picture. The diagram in pic. 8 shows a clear shift of a part of the data to the left side with respect to 0 of the horizontal X axis.


Pic. 8. The dependence of amount of funds raised during ICO (as percentage of the declared ICO Hard Cap) on Evaluation parameter.

Diagram in pic. 8 illustrates dependence between declared Hard Cap percentage of funds raised during ICO and Evaluation parameter. On the horizontal axis the data is divided according to groups of ICOs:

     •   Evaluation parameter is within the range of -0,10 to -0,09;
     •   Evaluation parameter is within the range of -0,09 to -0,08;
     •   Evaluation parameter is within the range of -0,08 to -0,07;
     •   And so on to the group of ICOs, with Evaluation parameter within the range of 0,04 дo 0,05.

The vertical axis shows the average percentage of collected funds for each group of ICOs from the number of messages. The size of yellow circles on the diagram illustrates average amount of funds in millions of USD raised by ICOs from certain group. The trend line is marked in blue.

The existing shift of some of the values along the X axis to the left of 0 can be caused by various factors, such as:

     •   The overall shift of the estimates caused by the shifted scale in the Evaluation calculating algorithm itself;
     •   The presence of a large number of low-quality comments, ordered by the ICO organizers themselves, in the messages analyzed for the calculation of the Evaluation parameter. They ordered, of course, positive comments to liven the topic. The literal meaning of the comments ordered was positive and the ICO organizers accepted the work. The system simply shows the true attitude to the ICO from people who carry out the order for the topic. This option seems the most plausible;
     •   Poor attitude to something does not always mean lack of desire to make money on this “something”;
     •   The combination of the above-mentioned factors.

For now, we refrain from recommendations on use of the Evaluation parameter.

[Schwarzenberg]

Part 4.

4. Additional information for investor

A separate section should highlight the results of the analysis of ICO investment returns (ROI), which may be of interest, first of all, not to the organizers, but to ICO investors. To provide visual differences on these diagrams, in contrast to the previous ones, which are interesting to both investors and organizers, green color is used. ICO profitability is used as a parameter characterizing the success of ICO.


Pic. 9. The dependence of ROI on the number of domains referring to the ICO website.

The diagram from pic.9 demonstrates relation between the ROI shown by ICO and the number of domains that contain links to the ICO website. On the horizontal axis the data is divided according to groups of ICOs:

     •   ICOs with websites having 1-20 referring domains;
     •   ICOs with websites having 21-40 referring domains;
     •   And so on to the group of ICOs, ICOs with websites having 181 to 200 referring domains.

The vertical axis shows the average profitability of ICOs that are part of the group (ROI). The size of green circles on the diagram illustrates average amount of funds in millions of USD raised by ICOs from certain group. The trend line is marked in blue.


Pic. 10. The dependence of ROI on the number of ICO referring backlinks.

The diagram from pic.10 demonstrates relation between the average ROI and the number of ICO backlinks. On the horizontal axis the data is divided according to groups of ICOs:

     •   ICOs with websites having 1-50 backlinks;
     •   ICOs with websites having 51-100 backlinks;
     •   And so on to the group of ICOs, with websites having 451-500 backlinks.

The vertical axis shows the average profitability of ICOs that are part of the group (ROI). The size of green circles on the diagram illustrates average amount of funds in millions of USD raised by ICOs from certain group. The trend line is marked in blue.


Pic. 11. The dependence of ROI on the number of messages in the official ICO topic on Bitcointalk.

The last of diagrams characterizing ROI is illustrated in pic. 11. It shows dependence of achieved ROI on the number of messages in the official ICO topic on Bitcointalk. On the horizontal axis the data is divided according to groups of ICOs:

     •   ICO topic has 1-200 messages;
     •   ICO topic has 201-400 messages;
     •   ICO topic has 401-600 messages;
     •   And so on to the group of ICOs, with the number of messages in their topics between 3201 and 3400.

The vertical axis shows average ROI for the group of ICOs. The size of green circles on the diagram illustrates average amount of funds in millions of USD raised by ICOs from certain group. The trend line is marked in blue.


5. «Icing on the cake»

In the previous section with green graphs for investors, we presented only the results of processing the collected statistical material. Currently we will not risk making generalizations basing on that data. Nevertheless, the “green” section, in our opinion, should also contain something that is ready for immediate practical use.


Pic. 12. Dependence of funds collected during ICO (as percentage of the declared ICO Hard Cap) on Activity and Potency.

The areal diagram, presented in pic. 12, gives a good idea on the dependence of the success of an ICO on project’s Activity and Potency. In addition, it shows very clearly, which particular AEP-parameters have the greatest impact on the success of ICO.


6. Conclusion

Making a brief summary of the research, one can carefully try to formulate the main conclusions drawn by the technical analysis of the statistical data available for ICO.

Useful hints for ICO organizers or what it takes to make your ICO project successful:

     •   The number of issue-related domains referring to your ICO project should be in the range of 300 to 400 or a bit more than that;
     •   The number of backlinks from issue-related referring domains should be in the range of 600 to 900 links;
     •   Do not use links form irrelevant domains;
     •   Do not overvalue the amount of Hard Cap needed for your project. The optimal amount of Hard Cap for ICO is between 2 and 40 million USD. Hard Cap exceeding 72 million USD almost certainly leads to failure of the ICO;
     •   When ordering paid comments on various media platforms in to promote your ICO, do not pursue quantity, pay attention to the quality of comments, especially in terms of EAP;
     •   During the ICO, continuously monitor the evaluation of comments from EAP perspective. The greatest attention should be paid to the value of the Potency parameter, which characterizes the interest of the audience in your ICO. If the average value of the Potency parameter falls below the value of -0,01, organizers should promptly take marketing or other measures to gain public interest. ICOs with Potency less than -0,01 most likely will not raise event 10% of announced Hard Cap;
     •   When analyzing EAP parameters, be aware of the fact that they are also effected by the paid comments you order. Consider the proportion of customized comments in the total number of comments left by users;
     •   Carefully study the diagram from pic.12 – it clearly shows which target values of the EAP parameters you should strive for, to collect the maximum percentage of your ICO Hard Cap.

Useful hints for ICO investors or how to choose the best ICO for investment:

     •   Pay attention to the number of issue-related domains, referring to ICO project. The ICO success increases when the number of referring domains reaches 300-350;
     •   Pay attention to the number of issue-related backlinks, leading to the website of ICO project. The potential success of ICO increases when the number of backlinks exceeds 500-600;
     •   Avoid investing in ICOs, with Hard Cap amount greater than 50 million USD;
     •   It makes sense to avoid ICOs, with more than 2400-2600 messages in their official topics on Bitcointalk. If such ICOs seem an attractive investment for some reason, one should study them more carefully;
     •   All other conditions being equal, it is better to invest in ICO with highest Potency parameter;
     •   Avoid investing in ICOs, with Potency parameter remaining below -0.01 for a long time.

Certainly, ICO investors should not limit themselves to technical analysis only. The combination of ICO technical analysis briefly described above, manual analysis of White Paper and project team, signals available on the market for crypto-investors – these tools can make choice of the right ICO much easier.

For the ICO organizers, the proposed methodology for technical analysis will allow determining in advance indicative parameters that ICO must meet to be financially successful. Tools recommended for technical analysis of ICO:

     •   Traffic, referring domains, backlinks – SemRush, Ahrefs, ICO Catalog;
     •   Raised Cap, Hard Cap, ROI – ICO Data, ICO Drops;
     •   EAP-parameters: Evaluation, Activity, Potency – ICO Catalog.

The study used statistical data of more than 1000 ICO projects held in 2018, information on them is publicly available (partially paid) on the above resources. To smooth the general picture and obtain more reliable results, during the calculations, some of the original data with minimum and maximum values were excluded from processing.

[kostya.enurov]

Thank you for this article. It was interesting to read this information. The cryptocurrency market is now falling, but even in this market there are more than 400 ico-projects this is a good result for blockchain 

[auroboros]

This will help investors in choosing the right ICO to start investing, but in my opinion this is still not an absolute reference, this is a long observation about ICO and certainly very interesting, almost 1 hour I tried to understand this, and well in a few aspects are indeed very valid but still cannot determine which ICO really will be something else in the future, because sometimes the data will not be in accordance with the facts, only data is very necessary because 70% of the data determines the level of truth, thanks. This thread were great

[amedia55]

Now it is very difficult to find a quality ico. Recently, more and more scams appear.People who lost money in Scam projects are unlikely to invest in other ico projects. We must fight against the scammers together. The article contains an interesting Analytics. I'm afraid to imagine how long it took you to create such a large article

[kerzhake]

Enough to print packs of new projects that absolutely do not show themselves on the market

[zacad]

Such a guide is very late, and investors in the cryptocurrency market rarely invest in ICO projects. At present, it is almost impossible to find a good ICO project. A good quality ICO project will only appear in a few months. I don't know if the future ICO will continue to exist?

[zabbara]

I have long been disappointed in the ico and do not invest in it anymore. Tokens with ico are traded on exchanges below the ico price. Until bitcoin starts to grow, investing in ico is very dangerous. This is my personal opinion!

[Schwarzenberg]

Such a guide is very late, and investors in the cryptocurrency market rarely invest in ICO projects. At present, it is almost impossible to find a good ICO project. A good quality ICO project will only appear in a few months. I don't know if the future ICO will continue to exist?

As you yourself said, it is hard find a good ICO project. That was the aim of our research, to give investors at least a couple of hints, so they could tell a quality ICO from Scam.
We believe that ICO market will grow and develop.

[Schwarzenberg]

So definitely, those icos have gatheres enough source fund will automatically listed on an exchange. What's your stance on the ico that conduct their sales outside of the platform? I mean let say on exchange?

Of course, we understand that we can’t collect information about all ICOs on our platform, but still we are striving for perfection and our platform already contains massive amount of data. Hopefully, in time we’ll be able to obtain even more data.

[Kosta20]

Recently he got into the ICO Scam. Invested $ 50 and the project on the last day of the ico was gone. The site, telegram group and all information was deleted. I can not imagine how people who lost money in ico will invest in other projects. I for example will not invest in ico

[rosalesjr]

Ico is now collecting very little money. People are afraid to invest, there was a lot of Scam for 2017-2018. Thank you for your deep analysis. I'll use your pictures in my presentation, if you don't mind.

[alisuper23]

Now, many who invested in the ico, has passed on investing in the pyramid on smart contracts. Investing in ico is a lottery in which you can lose everything.

[rachidharduz]

I lost $ 500 in eth in the Block Broker project. The project became a Scam and I did not receive a refund. After that I will no longer invest in ico

[seantseng2000]

  Cool article. Deep Analytics on ico. Though I do not particularly like to read, you need a video to do with so much analysis

[Jerra]

It is clear that if the ico has a lot of traffic on the site, the ico can be more successful, but it seems to me that the ico can make a big bounty, the traffic to the site from this bounty will go and as a result the ico may not be successful, but due to the bounty, the company will have a lot of traffic

[moschinot]

I'm tired of fraudulent projects that are gaining a lot of money and at the same time go away with the collected money from the cryptocurrency market