ICO or Initial Coin Offerings are hot selling cakes in the crypto world. Essentially they are a fundraising instrument for startups, to collect finance for implementing their unique business ideas. It is done by crowdfunding and in the last few years, it has become a strong source of capital for startup companies.
What Are Initial Coin Offering a.k.a ICO?
In an ICO, a pre-defined quantity of the crowdfunded cryptocurrency is allocated to initial investors in the form of “tokens” in exchange for fiat currency or other cryptocurrencies such as Bitcoin (BTC) or Ethereum (ETH). Tokens are also called “coins” and that is why it’s called “Initial Coin Offering”.
Read “What are ICO Bounties?” if you want to further know about ICOs.
Although similar in concept, ICOs are very different from IPOs. Unlike IPOs, ICOs do not allocate any company stocks but issue tokens to passionate investors depending on their investment amount. Compared to an IPO, an ICO campaign is much more efficient as startup companies do not need to go through rigorous and extensive capital-raising processes with venture capitalists and banks, which usually involve a lot of bureaucracy and paperwork.
Many of the early investors and supporters who bought ICO tokens during public sale events have made jaw-dropping gains. Many of them in some successful ICOs have already become millionaires. Here are the Top 10 ICOs of all time with a maximum return of investment (ROI) since their launch.
1. Nxt +1867061%
2. Iota +551029%
3. Neo +426645%
4. Spectrecoin +375341%
5. Ethereum +337797%
6. Stratis +187192%
7. Ark +66009%
8. Lisk +27767%
9. Populous +19414%
10. Storj +14497%
But not all ICOs perform well and many of them fizzle out after reaching a stage. In the strictest sense, an ICO can be considered a failure if they fail to perform, what they proclaimed at the time of the initial coin offering. However, the cryptocurrencies world is like the wild west with new ups and downs every day, as there are so many unknowns. Therefore, there are always some changes as ICO startup starts implementing their whitepaper.
Ethereum co-founder Vitalik Buterin claimed that 90 percent of initial coin offering (ICO) tokens launched on top of the Ethereum protocol will fail. There are already some 700 failed ICOs and this number is not exhaustive. There are much more ICOs which fizzle out over a period of time. Deadcoins’ website has maintained a really interesting and extensive database of failed ICOs, you should definitely check it out. Bloqtimes staff noted down a list of some failed ICOs, whose successful implementation would have changed the world.
Top ICO projects that failed miserably:
- Chain of points
SpaceBIT was one of the most ambitious digital currency projects of its time. It was the first decentralized space company, that planned to create a space banking platform for cryptocurrencies. SpaceBIT idea was coined in the last quarter of 2014. The company had plans to launch a constellation of nanosatellites that would provide depositories for digital cash. As a platform, they planned to provide global and universal access to remote areas around the globe where payment infrastructure is not sufficient. But in early 2015, they suddenly disappeared from the cryptocurrencies stage. Probably they could never implement any working product or prototype about their idea.
Year: Jan 2015
Funds Raised via ICO: $100 million
Token: not available
Service Domain: Space Banking Platform
GetGems was a social networking platform that paid cryptocurrency to members for viewing advertisements within their smartphone App. The developers were so proud of their idea, in 2014, they announced it would disrupt social media as we know it. But those claims seem to have fallen flat. By the end of 2014, their company reported a disappointing crowd sale, raising only $111,000 USD. Their ICO sale was not even close to their claims of disrupting the existing social media and much smaller compared to other cryptocurrency projects.
Year: Mid 2014
Funds Raised via ICO: $111,000
Service Domain: Retail Advertisement
DAO ICO was launched in April 2016 and it was one of the hottest projects in the cryptocurrency community. It had an objective to provide a new decentralized business model for organizing both commercial and non-commercial enterprises. Every investor was allowed voting rights on proposals, and that means this could change the business model for investors for the better.
The DAO was the largest crowd-funded project of its time. By May 2016 it had raised around $150 million of funding through its token sale. Their project code was entirely open source. However, there were some vulnerabilities in their project code that the DAO team could not fix effectively and in a timely manner. Hackers already had eyes on the project and successfully attacked DAO several times, resulting in the loss of millions of worth of funds. This led to the collapse of the entire DAO project.
Year: April 2016
Funds Raised via ICO: $150 million
Service Domain: Digital decentralized autonomous organization, software venture capital fund
PayCoin was launched by Josh Garza and GAW miners. With Paycoin, GAW Miners hoped to improve on existing coins by producing a decentralized network structured to promote price stability, fast transaction times, and rich features, all of which were intended to hasten the global adoption of cryptocurrencies. PayCoin had a huge launch as it quickly became one of the largest cryptocurrencies across the globe by market capitalization, baffling the entire crypto community by its sheer size.
Garza’s whitepaper drew a promising picture and called for a new strain of blockchain technology that would produce a new breed of cryptocurrency. But the house of cards began falling when there was no progress on the technology side. Garza quickly converted PayCoin into a generic clone of altcoin as this apparently helped his team to push it into the market faster. With PayCoin’s developers continuously failing to follow through with its promises, investors began losing faith in the cryptocurrency. Eventually, PayCoin touched the bottom and GAW had to completely shut down its operations in 2015. Federal authorities sensed foul play in the entire ICO launch. Subsequently, the Securities and Exchange Commission (SEC) sought more than $10 million from the GAW Miners in connection with its ongoing securities fraud suit.
Year: Oct 2014
Funds Raised via ICO: 12 million coins pre-mined (more than 97%)
Service Domain: Financial (Price stability)
Inchain was a decentralized insurance platform and was launched as a safe and unique solution for crypto investors, as cryptocurrency platforms and wallet services were increasingly coming under hackers’ attack. It would have immensely mitigated the crypto community’s risks associated with loss of assets from hacking incidents. Based on the Ethereum blockchain, the platform was planned to issue and maintain tokenized insurance policies and bonds.
The platform was designed to operate with minimal human interaction by implementing smart contracts at the core. However, Sergey Primatchik, the Founder and CEO of InChain, had to cancel their ICO entirely as investors had reservations regarding the team members, an unclear business viability model, and a lack of proof of concept for the technology. In the end, CEO Primatchik announced that all investors, who had pledged funds in the project during ICO, will get a refund as per ICO Terms and Conditions.
Year: Oct 2016
Funds Raised via ICO: NA
Service Domain: Blockchain Insurance Platform
MetaGold (MEG) token was a token that would have served as a means of payment in big games like “War of the Magi” and “Project X”. MEG token could be used to buy different stuff in games like characters, custom skins, gadgets. It was also meant to buy, sell and trade any items related to games on a marketplace. This would have made buying selling stuff in the game lot easier, faster and would have also helped in cutting transaction and service fees often charged by credit card companies. MEG was an ERC20 token based on Ethereum blockchain technology. However, due to a lack of transparency and less information about co-founders investors started doubting the intentions of the founder and the whole project. Eventually, the project was abandoned and failed to materialize.
Year: April 2017
Funds Raised via ICO: $250,000
Service Domain: Gaming Industry
Muniti was a ground-breaking project with innovative features aimed at becoming the first touristic cryptocurrency. This project was initiated by a group of Maltese IT developers to promote tourism and integrate it with the existing system. Muniti was planned to be distributed via door-to-door (D2D) distribution with each Maltese household receiving a total of 156 Muniti. Currently, it’s not traded on any of the major exchanges and is deemed a big fail.
Year: April 2014
Funds Raised via ICO: 7 million coins (via D2D)
Service Domain: Tourism
8. Chain of Points
Chain of Points was a blockchain-based token that could have provided a simple and flexible solution to merchants and customers in establishing a successful loyalty rewards exchange program (transform loyalty into rewards). POINTS was designed to be a speedy and lightweight solution, allowing businesses to not worry about rewarding customers and instead focus on their business execution. The project planned to employ a new and promising delegated proof-of-stake-based blockchain validation algorithm. However, things failed to materialize as claimed in the whitepaper.
Year: Feb 2017
Funds Raised via ICO: 21 million coins
Service Domain: Commerce & Retail
Aircoin sought to accomplish instant mobile phone payment transfers as a simple and technically viable option for all. It planned to enrich the payment transfer market by pioneering the removal of the foreign currency exchange in transactions. Mobile-based payments were a priority for Aircoin. However, their plan on paper could not materialize on the ground.
Year: Feb 2014
Funds Raised via ICO: 357 million coins
Service Domain: Instant Payments