Changing decades have introduced new technologies that are not only simplifying how things work but, are also becoming innovation enabling platforms. Back in the 1990s, when the Internet was introduced to the world, several businesses immediately recognized its potential to make a global audience come together. Others utilized the same technology to innovate and offer products & services to mankind that were unimaginable earlier.
Introduction of Blockchain to the World
The advent and rise of Bitcoin have drawn many eye-balls towards its underlying Blockchain technology. Innovators have realized the potential of this disruptive technology to create revolutionary businesses and products.
Ethereum, a Turing-Complete Blockchain, provides a platform to create peer to peer and decentralized applications. Anyone can start a project, with their innovative business idea that will add value to the market. Additionally, Blockchain technology has also enabled a new way of raising funds which is very different from what we had seen till date.
Plight of Business
Earlier, an investor could only invest in national companies and had to take the services of a broker in case he wanted to invest in companies belonging to a different country. Businesses needed to be well-recognized and profitable to be listed for an Initial Public Offering (IPO). Additionally, they required lawyers, banks and patience to help them go through legal and compliance processes.
Blockchain Fundraising: ICO
Blockchain has changed this trend by allowing a business venture to raise funds on its network without a proven track record. It has also blurred global borders in the investment realms by introducing the option of Initial Coin Offering to both businesses and investors.
ICO is a crowdfunding method adopted by Blockchain enthusiasts building products on the network. The absence of a regulatory framework and legal protocols has made it very easy for Blockchain projects to raise funds from investors coming from around the globe. All they need is a whitepaper detailing their vision, a roadmap they will follow to realize that vision, a smart contract to function and the ability to market their product. No proven track record is required to conduct an ICO, making it available to all and since it is on the internet, it is globally accessible.
Funds through an ICO are raised by selling the tokens instead of shares and= it doesn’t necessarily offer ownership rights to the investors. A total of $13.7 bn were raised just in the first five months of 2018. Below is a list of top 10 ICOs ever conducted along with their present status.
EOS platform is a product of Block.one startup, developing next-generation smart contracts platform. It allows developers to build DApps on its platform while providing them with an operating-system-like set of services. Its ICO started in June 2017, which continued for an entire year before concluding in June 2018. At the time of closing, EOS had raised $4.1 bn making it the biggest ICO in the history.
Present Status: MyWish Smart Contract Platform was launched in September, 2018 on the EOS Blockchain that enabled the creation of first automatic smart contracts. It is an official platform that provides reasonable and secure EOS accounts that are needed after the migration of EOS from Ethereum. The platform also secures any activities that are done on the EOS Blockchain during any time of the day. It also allows EOS account holders to launch crowdsale and Token smart contracts on the Blockchain in exchange of EOS tokens.
Telegram is an end-to-end encrypted messaging app, based in Russia. Its ICO story is a bit different since it first raised $1.7 bn through a private sale. The use of SAFT agreements for the same allowed the firm to scrap its public sale.
It raised money with its token sale, supposed to be utilized for the development of Telegram Open Network (TON). This network is supported by the token GRAM and envisions the development of a completely new Blockchain which will provide a solution to the problems of scalability. The idea is to use ‘infinite sharding’ and ‘hypercube routing’ to make a fast Blockchain that will be capable of processing millions of transactions every second.
Present Status: Telegram is facing some major challenges ahead of itself at the moment. The first challenge is the trading of GRAM tokens in second market before they are officially listed on exchanges for public trading. Early backers of GRAM are trading their tokens for prices that are multiple-fold higher than what they were purchased for. The market threatens to manipulate the GRAM prices, through unofficial deals, even before they are officially listed on exchanges. It can complicate the listing process and cause a problem in setting post-ICO prices for GRAM.
Secondly, the Russian government has carried out a rudimentary censorship campaign which has knocked down about 19 million IP addresses and services like Twitch, Slack, Soundcloud, Viber, Spotify, Fifa, Nintendo to avoid a Blockchain messaging service making its way into the market. It is because ICOs are not regulated and hence are being considered illegal in the nation.
Dragon ICO stands out in the ICO realm because of the fact that this ICO will have a physical asset to back it. The funds raised by the ICO are being used for the construction of a floating casino in Macau. The casino will give non-negotiable gambling chips in exchange for DRG tokens once its construction is completed.
The ICO has found a place on this list because it managed to raise an impressive amount of $320 million. It’ll reduce the role played by junkets in the Macau gambling economy, which is about 20 times greater than that of Las Vegas. Not just that, it’ll assist capital flow in and out of China and make gambling convenient for Chinese citizens.
Present Status: Dragon has created an entire ecosystem that incorporates the domains of Art, E-gaming, Motorsports, Professional fighting, wellness, and Charity. It also includes a social wallet that is used to make crypto/fiat payments and promoting greater adoption of cryptocurrencies.
It is another ICO based out in China, currently one of the largest cryptocurrency exchanges in the world. Huobi didn’t initially offer a native cryptocurrency but, later decided to launch its Huobi Token, given the popularity of other ICOs with a native token.
The highly publicized token sale fetched the founders a total of $300 million in early 2018. The tokens are preferred by investors because of the utility provided to them on the Huobi platform. The users can do trading on the platform with HT token and get discounts on trading fees.
Present Status: Huobi is diversifying its platform by adding more cryptocurrencies on its exchange. Furthermore it is also launching trading pairs on its platform. In the month of November 2018, Huobi launched trading pairs of GXC/USDT, RBTC/BTC, and XRP/HUSD. It is also partnering with more firms in order to expand its available resource pool and discover high-quality Blockchain projects.
Hdac aims to develop the first Blockchain based IoT contracts and payment platform that will create a space for IoT devices to communicate, manage identity authentication, store data and make payments. It is backed by Hyundai, one of the leading car manufacturer of South Korean.
The ICO campaigned raised a whopping amount of $258 million in the latter half of 2017. It is using the money to build a new Blockchain that will manage the scaling and contract functionality that is needed for an IoT platform.
Present Status: As per Hdac’s latest monthly update, it is checking all the boxes in its roadmap. The project has managed to list itself on multiple exchanges while making its presence felt in international Blockchain festivals and meetings. The project has also created a Proof of Concept contract for IoT.
Filecoin is the first regulatory-compliant ICO which complies with the SEC regulations. Only allowed accredited investors with annual earnings of more than $200,000 or assets worth $1 million were allowed to purchase the tokens. Filecoin realized that there are many people with extra storage in their devices and many who require storage spaces. It aims to use InterPlanetary Fie System (IPFS) to create a decentralized cloud-based storage network. This will allow those who require extra storage space to pay those who are in possession of it.
The ICO campaign that was run in September 2017, raised over $257 million. Leading venture capital firms like Union Square Ventures, Andreessen Horowitz, and the Digital Currency Group, have already invested $52 million in the project.
Present Status: In its quarterly update, Filecoin announced that it’ll make the project’s codebase public. They are hoping that this launch will fast-track the project towards launch. Its product is still under development as of now.
Tezos is a project backed by Tim Draper, a leading venture capitalist of Silicon Valley. The project undertook the creation of a new kind of consensus-algorithm which led to its popularity. The objective of Tezos, to become a go-to Blockchain protocol, helped it raise $232 million in July 2017.
Present Status: Tezos is promoting its consensus mechanism, Liquid Proof of Stake or LPos to maintain a dynamic validator set, enabling accountable governance and token holder coordination.
8. Sirin Labs
Sirin Labs’ project is one of a kind because of its focus on Blockchain based hardware that’ll enable and simplify user adoption of this decentralized technology. The project is built in collaboration with Foxconn which focuses on building a Blockchain based mobile device ‘Finney’ that is expected to cost about $1000. The token holders can pre-order Finney using the SRN tokens.
Finney will allow direct downloading and use of decentralized apps, eliminating the role of Google Play or the Apple App Store. Also, Siring Labs also intends to develop a software that’ll assist the conversion of numerous ERC-20 tokens using their Blockchain mobile phone. Its focus on widening the adoption of Blockchain by focusing on electronic experience enabled the ICO to raise $157.8 million in December 2017.
Present Status: Sirin Labs have started taking pre-orders up their Blockchain phone ‘Finney’, which is much ahead of its expected launch date. For now, one can only pre-order using SRN tokens, however, other payment methods will be made available later. It’ll also be available of Amazon’s launchpad in January and in two concept stores that are expected to open in London and Tokyo in the following two months.
Bancor conducted its ICO on June 12, 2017, where it raised funds from crowdsale as well as from venture capitalist firm Blockchain Capital and Tim Draper. The $153 million fundraising project is a Blockchain based prediction market project.
Present Status: In November 2018, Bancor launched BancorX live, which led to the creation of a cross-chain bridge that facilitates automated conversions between 125+ EOS and Ethereum-based tokens.
10. The DAO
The DAO is the first among all the ICOs mentioned in this list which launched its ICO in May 2016. The Decentralized Autonomous Organization aimed to build a decentralized venture capital fund that would be operated with a voting system. VoThe votingystem meant that the community controlled how cryptocurrencies were spent by cryptocurrency project fund managers eliminating the chances of malicious activities with the firms’ funds.
The project raised $152 million worth of Ether, but about one-third of this amount was lost to a major hack that occurred soon after the ICO. The hacker found a glitch in the smart contract and managed to take 3.6 million Ether from the fund pool.
The loss was soon recovered by Ethereum community which voted for a hard fork in the Ethereum network called Ethereum Classic that allowed the investors to restore their Ether holdings that they had prior to the hack. This incident led to the dissolution of what was expected to be a truly decentralized business-decision making platform.
Present Status: The DAO was dissolved after the great hack and is no longer in existence.
The funds collected or big names backing an ICO project doesn’t ensure the realization of the vision or fulfillment of promises done by the project. Various external or internal factors also determine the success of the project. A successful ICO doesn’t mean that the project will be successful as well.