During Q1 2018 the Initial Coin Offering (ICO) bubble reached its peak. Now, the craze for anyone being able to invest in disruptive technology appears to be over, with the majority of ICO tokens suffering a drastic fall over the past twelve months. Ranging anywhere from 80% to 99%, the losses suffered by many ICOs have been huge. For example, based on an ICOrating report, the opposite of the high-intensity ICO craze in Q1 2018 has taken effect, with Q4 2018 seeing 58% of ICO projects not even able to raise more than $100,000 and only 2% of all announced ICOs being listed on exchanges afterward.
Many factors have been attributed to the ICO crash, including the negative crypto environment, greedy investors looking for quick fortune, incompetent project teams with lack of expertise, regulations, lack of scalability, unprofessionally run ICOs, entrance of institutional investors with their connections, and more. As an answer to regulations, blockchain startups started to shift from ICOs to Security Token Offerings (STOs). Despite the failure of so many ICOs, many still believe in the strong underlying value of blockchain technology, as it has potential to improve business world.
Throughout today’s report we will look at the state of one much-hyped ICO from QI 2018 and two from Q1 2019 that have gone through Binance Launchpad and seen far more success. In just twelve months it’s become clear that the ICO market has taken quite the beating, but it seems that it may be about to be on the road to recovery
The Fall of Atonomi
Nowadays, a lot of projects are under the radar of U.S. Securities and Exchange Commission (SEC) because of “scam” and fraudulent ICO reports by investors. For example, one ICO that garnered a lot of hype and interest in early 2018, Atonomi, has replaced excited ICO holders with angry investors looking for justice.
Atonomi provides a new security protocol and infrastructure to enable billions of IoT devices to have trusted interoperability for both data and commerce. This ICO had a lot of hype and very high interest – at least initially – and was therefore able to generate $25 million through the ICO. However, as promising as it appeared on paper, the project is now just a shadow of what it promised. In a similar fashion to others, Atonomi suffered from the ETH price collapse, having not sold any before the price began to collapse in Q1 2019. They were forced to dump ETH in large numbers to pay overheads, which in turn crashed the market further, starting a downward spiral. Adding to this were changes in personnel, including leadership, and very little was done in terms of marketing, development, GitHub updates and the like as funds ran dry.
Rumors that Atonomi ICO funds were being used by Atonomi’s parental company Centri only increased the disillusionment felt by token holders, all of which led to the price of the token dropping by a staggering 97% between the ICO launch date and today, with the current market cap being approximately $420,000, down from some $30 million at launch. This is a proof how risky were ICO investments were and still are, as this is just one of many ICOs that have suffered extreme trouble.
BitTorrent Beats the Critics
The ICO market is unattractive for investors in its current state, but that hasn’t stopped everyone losing out. BitTorrent (BTT) launched their ICO on the Binance Launchpad platform in January 2019 and raised $7.2 million in a public sale that barely lasted 15 minutes. Many expected it to dump in its exchange listing, as had been the fate of almost all ICOs in the last year, but it defied the odds and is currently sitting at almost 6.5x its ICO price, proving that ICOs are still profitable in some circumstances. The BTT token allows content creators to connect with their audience, earn and spend digital currency on the BitTorrent platform without a middleman.
Fetch.AI Finds its Feet
The success of the BitTorrent ICO undeniably brought fresh impetus back into the ICO game, like an eyelid flickering on a coma patient. Fetch.AI was next in line for the Binance Launchpad platform and the impact was even more resilient – $6 million worth of tokens were sold within 22 seconds. At a current price of $0.31, those lucky enough to have bagged some Fetch.AI at ICO are sitting on a 3.5x level of profit, with only 8.38% of all the tokens released for public sale.
Fetch.AI is a combination of breakthroughs in Blockchain technology and Artificial Intelligence. The project is dedicated to building the world’s first AI-based self-adaptive smart ledger technology for decentralized transactions. It is a digital economy-based company that has developed what they consider to be, “the world’s first truly smart ledger”. It would harness the power of AI, with such being central to the project and the creation of an ecosystem that will be consistently and automatically evolving thanks to machine learning.
Ultimately, the Fetch ecosystem wants to create a situation whereby businesses and individuals can rely on the ledger to automate their business processes. That’s not all, as it will all also lead to more efficiently and profitably, as it has the power to autonomously develop and act upon new solutions and opportunities as they grow. Fetch’s technology has a structure of three layers. The highest layer includes digital agents, AEAs (Autonomous Economic Agents) that extract data from hardware systems and data resources, before providing it to those who are in need.
The team behind Fetch.AI consists of highly educated people who are professionally or academically involved in AI and/or blockchain. More importantly, the founders gathered a team with great skills and experience in technology – especially AI and Machine Learning. There are many IT engineers and researchers in the core team. A lot of them used to work for high-profile companies or organizations, such as DeepMind, EMBL, and Cadence Design Systems. The hard facts are that the Fetch.AI team is brimming with relevant industry experience.
Besides having a strong team on paper, the ICO also had some strong strategic collaborations. Fetch.AI is joining BMW, Ford, General Motors, Renault, Accenture, and IBM to form the Mobility Open Blockchain Initiative (MOBI). More information regarding the team and its strategic partnerships can be found within the official token overview.
The Fetch ERC20 token (FET) will act as a key component within all operational features of the network. The native token will effectively power all activities within the ecosystem. This includes network participation, as well as development of nodes and economic agent development within the framework.
There is set to be a total of 1,152,997.575 tokens released over time, and unlike public sale investors with no lock up, private sale investors have a lockup and a bonus of 33% or 25%. Vesting periods for these tokens will vary from between three months for private sale purchases and up to three years in the cases of founders and foundation tokens.
The project will exchange ERC20 FET tokens for native FET tokens once they have launched their own mainnet, which is scheduled for mid-2019.
Key Takeaways
• The project is still in the very early stages of development, with roadmap details that are not hugely extensive.
• Only a small percentage of tokens are made available to the public.
• The technical proposals and concept of the project are very attractive, being presented in a largely professional manner.
• Good partnerships – MOBI, Warwick Business School, Mobility Open Blockchain Initiative, etc.
• The target sector of the project is one that can ultimately benefit from the success of Fetch AI.
• Large team of industry professionals that are backed by a well-connected VC firm.
• Launch on Binance LaunchPad, which attracts the majority of token sale investors and brings the attention, plus good momentum because of BitTorrent high returns.
• Fetch.AI proposes a very high valuation ($150 million) on a fully diluted basis, having raised $15 million privately and $6 million more through the public sale.
• Seed sale price was $0.0341, private sale price was $0.068, and public sale price $0,0867.
