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Original research, analysis and reports across the frontier of cryptoeconomics, blockchain technology, and digital assets.
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Update

August 23, 2019

Report

August 2, 2019

Cryptoasset Report

May 23, 2019

Cryptoasset Report

May 9, 2019

Cryptoasset Report

April 25, 2019

Cryptoasset Report

March 1, 2019

Quarterly Report

February 26, 2019

Cryptoasset Report

December 20, 2018

Cryptoasset Report

December 18, 2018

Quarterly Report

August 20, 2018

Analysis

June 6, 2018

Analysis

April 4, 2018

Token-based fundraising

March 6, 2018

Analysis

March 2, 2018

Token-based fundraising

February 4, 2018

Token Sales

December 29, 2017

Token-based fundraising

February 12, 2017

Introduction

August 2, 2016

Introduction

July 13, 2016

Education

July 4, 2016

Introduction

June 21, 2016

Introduction

June 14, 2016

Introduction

June 7, 2016

Introduction

March 24, 2016

Introduction

March 17, 2016

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Token-based fundraising

February 12, 2017

2017 Token Sales / ICOs in Review: Part II

Token sales and ICO activity in 2017 involved an incredible variety of projects. As a group, they show all the many ways entrepreneurs are applying blockchain technology and tokenization to sectors throughout the economy.

Introduction

Part I of the 2017 Year End Review looked at the overall token sale market, and the phenomenal growth in both sales and amounts raised that defined 2017. In Part II, we look more closely at some of the key trends and explore the year through the lens of ICOs’ sectors and industries.

Taking 2017’s completed token sales that raised more than $25,000 and grouping them by industry gives the chart below.

chart-dark-sector-tree.png

The above graph illustrates the degree to which the financial, media, and information industries garnered the bulk of ICO attention during 2017. (For an overview of how our industry and sector classifications were developed, read this article). This concentration shouldn’t be surprising: cryptoassets are new financial vehicles built on new methods to secure information. The concentration in media reflects a variety of trends: the demographic overlap between the gaming community and the blockchain community; the presence of gambling platforms, which date back to the industry’s origins; and the inspiration many in the industry take to disrupting incumbent social network behemoths like Facebook. The rest of the chart also shows how diverse token-based projects are becoming. This is laudable, because these projects are expanding the horizon of possibility for blockchains. It should also be treated with caution, because tokens still suffer from lingering usability challenges that make it difficult to onboard those new to cryptoassets.

The below chart provides a different view on the distribution of ICOs, considering them on a relative basis, while adding percentages for funds raised across industries.

2017 ICOs by Industry Bar

Several relative surprises emerge: while the leading position of financially-themed ICOs is clear, we also see how, from the perspective of funds raised, financial ICOs finished in second position after the information industry, which includes many of the ‘blockbuster’ ICOs targeted at next-generation blockchain infrastructure, like Filecoin, Tezos, Polkadot, and Blockstack.

Another way of thinking about the distribution of ICOs by industry throughout 2017 emerges from the chart below, where a temporal component of 2017’s ICO activity provides further perspective upon the year’s activities:

2017 ICOs by Industry

The above graph shows the predominance of the Information industry in terms of 2017's blockbuster sales. It also reinforces how active the finance industry was, particularly in the second half of the year: 199 ICOs raising $2.3 billion, with an average raise of $11.3 million and a median of $5 million.

This reflected a couple trends:

  • As more people entered the industry or thought about entering the industry, entrepreneurs raced to provide them with products and services.
  • As the entire crypto-asset industry itself grew almost 10-fold in Q3 and Q4, people needed tools to manage their own funds.
  • As the entire community grew, it provided a ready market of people with crypto-assets and with some experience in basic financial concepts. It’s an ideal base of potential first users.

2017 Finance ICOs

The graph below disaggregates the Finance Industry into its composite sectors and shows the types of products these projects are launching.

2017 Finance ICOs by Sector

One immediate observation is the role of the outsized raises in shaping both the larger amounts raised, as well as the broader statistics across the industry. For example, the 5 largest raises, clearly identifiable above, collectively raised $458 million, with an average raise of $91.7 million. Removing those five from the broader industry also leads to a strikingly different set of figures: the remaining 194 sales account for $1.8 billion in sales, with a new, lowered average of $9.2 million. That this second group’s median remains virtually the same at $4.8 million also illustrates the extent to which the largest sales represent outliers.

Conclusion

Considering the influence of the largest sales, as we have done here, illustrates why we have begun to think about the classification of ICOs by raise bands, a concept we discussed briefly during the latter part of 2017, but which we believe provides a number of useful insights when thinking about the larger token sale market. In our view, while the largest raises capture an outsized percentage of both funds raised and media attention, the bands between $5 and $60 million are in many ways where much of the the most exciting activity in the space is taking place. In Part III of our extended 2017 year-end review, we’ll take a closer look at the issue of ICO raise bands and why they can be a useful framework for exploring the evolving industry.