Best and Worst of ICO Gold Rush: How Technology Created a Market and Greed Doomed It
Crypto Basics

Best and Worst of ICO Gold Rush: How Technology Created a Market and Greed Doomed It

2 years ago

Initial coin offerings (ICOs) emerged around 2013-14 for crypto projects to raise funds by offering native tokens to private and public investors. We take a look back at the ICO boom that lasted from 2016 through 2018, and where some of the projects are at currently.

Best and Worst of ICO Gold Rush: How Technology Created a Market and Greed Doomed It

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Initial coin offerings (ICOs) emerged around 2013-14 as the cryptocurrency industry’s response to the problem of how to fund new projects in a fast-growing, largely unregulated field. ICO campaigns usually involve selling cryptocurrency tokens to private or public investors. The proceeds of the sale go towards the development and marketing of a new product, whereas the investors usually intend to sell the tokens later at a higher price, as the project matures and attracts a large user base.
If you’re new to the crypto industry you might be wondering why this topic is important. After all, the current ICO market, with its few dozen campaigns a month and funding goals in the hundreds of thousands of U.S. dollars, might seem completely insignificant. Just compare it to hot trends such as decentralized finance (DeFi) with a combined market cap of over $100 billion or even non-fungible tokens (NFTs) whose total sales value reached over $3.7 billion as of August 2021.
Well, it wasn’t always like that. The emergence of Ethereum (ETH) in 2015 has essentially eliminated the barrier to entry into the ICO market. Barring non-technical considerations like marketing and community management — Ethereum and, later, other smart contract platforms have made it so that literally anyone could conceivably launch a new crowdsale in mere minutes.
What followed was a massive ICO bull market that began in 2016, exploded in 2017 and peaked out in 2018. During its heyday, ICOs could attract hundreds of millions, or even several billion USD in sales every month. The largest such campaign ever, a year-long ICO by EOS which ended in June 2018, has managed to eclipse the three largest U.S. venture capital rounds of that year, combined. The total volume of the market reached $2.6 billion in 2017 and $14 billion in 2018.
It was as glorious as it was stupid. For the most part of the bull market, the vast majority of projects were scams: either perpetual vaporware whose developers never intended to deliver a working product, or just outright criminals that made away with the investors’ funds as soon as the crowdsale was over. In 2017, as many as 78% of ICOs were identified as scams. The situation did not improve with time, as by July 2020 a mere 12% of new projects would see any success at all.
That couldn’t go on forever, so the bubble popped around April 2018, along with the entire cryptocurrency market: Bitcoin (BTC) dropped to as low as $3,500 and took almost two years to recover — a fate shared by most other cryptocurrencies. The ICO market remains in a comparatively sorry state to this day and only a handful of major projects have managed to thrive in the aftermath.
It was a lesson in how radical new solutions enabled by technology can drive innovation, giving rise to a multi-billion dollar market of new products practically overnight; but also in how uncontrollable hype, which is so prevalent in crypto, can leave thousands of investors holding the bag. With DeFi seemingly following a similar trend, that lesson might be as relevant as ever.

Let’s take a look at some of the largest ICO campaigns of the gold rush days and see where they are now, where some of them went wrong, and what we can learn from the ones that are still around today.

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Successful ICOs – Some Are Here to Stay


Date of ICO: July 2014

Funding secured: $18.4 million

Current market cap: $380 billion

Ethereum (ETH) was one of the first truly successful ICOs ever — indeed, one of the first ICOs at all. Its promise of a Turing-complete computer on a blockchain that could basically run any program in a decentralized manner has allowed it to secure over $18 million worth of Bitcoin (BTC) during its public crowdsale in July 2014. A thoroughly insignificant sum if you judge by the standards of such behemoths as EOS and TON, it was further cut into by the loss of $9 million in potential capital due to Ethereum Foundation’s failure to liquidate the secured BTC before a major price drop.
Despite the setback, Ethereum went on to become the second-largest cryptocurrency after Bitcoin itself, and the most popular platform for conducting other ICOs — the vast majority of crypto fundraising campaigns during the bull market of 2017-2018 took place on Ethereum. ETH is traded on most major exchanges, its average 24-hour trading volume is fairly close to BTC’s despite the difference in price and capitalization, and its market cap is more than fifteen thousand times larger than the amount of money it had secured during its ICO.

A wild success by any possible metric, Ethereum really is a poster child for a successful crowdsale campaign, even though it technically predated the emergence of the ICO market by a couple of years.

Where is it now? Numerous software updates, industry partnerships and even major controversies later, Ethereum is still going strong. Despite the emergence of several competing platforms that claim to offer “the same product, but better,” ETH has not lost any of its relevance. With a strong developer community, the upcoming “merge” with the beacon chain proof-of-stake system, it remains one of the most popular cryptocurrencies ever created.


Date of ICO: January 2017

Funding secured: $62.2 million

Current market cap: $43 billion

Cardano (ADA) is one of the few projects that have managed to ride the crest of the ICO wave all the way to their current dominant position, along the way surviving the absolute bloodbath that followed after the gold rush. Founded in 2015 by Charles Hoskinson, who had formerly co-founded Ethereum, it promised to deliver a similar blockchain platform focused on smart contracts and decentralized applications (DApps), albeit with improved features like scalability and interoperability.
The developers took full advantage of the project’s successful ICO, which brought in $62.2 million in January 2017: Cardano became the most active cryptocurrency project on GitHub in 2018 with over 45 thousand commits — more than the next two contenders combined.

Add to that a number of blockchain research partnerships with higher education institutions around the world, including the University of Edinburgh and the University of Wyoming, and Cardano’s serious focus on driving innovation in the crypto industry becomes apparent.

Where is it now? While Cardano didn’t quite manage to dethrone Ethereum as the most popular smart contract platform as of August 2021, its performance has been spectacular nonetheless. As of mid-August 2021, ADA’s market capitalization is currently about $70 billion, making it the third most valuable crypto asset by market cap, and the value of one token sits over $2.20 — more than 100 times higher than the $0.02 that it was priced at during the ICO.


Date of ICO: October 2015, September 2016

Funding secured: $556,500, $4.5 million

Current market cap: $3 billion

NEO (NEO) is another smart contract/DApp blockchain platform on this list (it’s a popular concept). Dubbed “Ethereum of China” due to the project’s founders and most of its development being based in the country, NEO’s two crowdsale rounds separated by a year have brought it a total of about $5 million — quite an insignificant sum even when compared to Ethereum’s already “unimpressive” ICO.

The project’s development is characterized by a holistic approach; it is focused on what NEO calls the smart economy: a complex infrastructure for digital asset and identity management, decentralized storage and domain name service, and other features built on top of its blockchain. This approach turned out to be quite in-demand, as it allowed NEO to reach a market capitalization of $3 billion by August 2021.

NEO is also focused on interoperability with existing business and legal frameworks – an aspect that is especially important on the Chinese market, where the government already views cryptocurrency and blockchain projects with significant distrust. The project is still in active development with its testnet set to migrate to the mainnet in August-September 2021.

Where is it now? While its rise has not been as spectacular as Ethereum’s or Cardano’s, NEO is notable for a different reason: despite a tiny ICO by the industry’s standards, it has managed to firmly occupy its own niche — namely, a smart contract platform tailored specifically to the Chinese market — while many other projects with significantly more funding were not as focused and, as a result, have since been lost in obscurity.


Date of ICO: December 2015

Funding secured: about $500,000

Current market cap: $2.4 billion

Similarly to NEO, IOTA (MIOTA) has survived the crash of the ICO market by finding a specific niche: it is a cryptocurrency that offers fast, zero-fee microtransactions, tailored specifically to the needs of the Internet of Things (IoT) industry. Also continuing our trend of decreasing ICO sums, IOTA secured a seemingly laughable $500 thousand in its late 2015 crowdsale — making its current position all the more impressive.
Delivering unique functionality few other blockchains have — it’s economically infeasible, for example, to send microtransactions via Bitcoin or Ethereum, where TX fees can be in the range of several U.S. dollars — has allowed IOTA to transform that $500K into a market cap of about $2.4 billion by August 2021. That incredible growth rate makes even NEO and ADA pale in comparison.
A number of partnerships both within the industry (Binance, Huobi, OKEx) and outside (Jaguar Land Rover, Dell) show the demand for highly specialized solutions in the crypto industry. Much like NEO, IOTA is still in the stage of active development: the Chrysalis update was introduced to its network in April 2021 in order to increase transaction speed, switch the transaction settlement to the UTXO model akin to Bitcoin’s, and improve the blockchain’s energy efficiency.
Where is it now? Although IOTA’s 46th spot by market capitalization — as of August 2021 — might not be as impressive as some of the other entries on our list, its meteoric rise from just $500,000 is nothing to scoff at. In fact, IOTA’s ratio of current capitalization to ICO funding secured (~5000:1) might likely be the highest on the entire market, second only to Ethereum’s.

Failed ICOs – Those That Went out With a Bang


Date of ICO: May 2016

Funding secured: $168 million

Current market cap: n/a

Arguably the one project that had kickstarted the ICO gold rush, the DAO (not to be confused with a DAO) was the first such crowdsale to have secured — and surpassed — a record-setting $100 million in funding. A revolutionary concept at the time, the DAO was designed as a sort of decentralized, user-governed venture capital fund whose investing activities were to be managed not by a panel of executives, but rather according to a democratic vote by all of its participants.
The idea has proven enticing, as its ICO has managed to attract $168 million worth of Ethereum contributions from more than 10,000 investors in a 28-day public round in May 2016. Even before the crowdsale had ended, however, a paper was released by a group of computer scientists detailing numerous security vulnerabilities in the smart contract code the DAO was running on. It didn’t take long for malicious actors to catch on: on June 17, 2016, several of the vulnerabilities were exploited to siphon off around $50 million worth of funds held by the DAO.

What followed was a split of Ethereum’s blockchain, which the DAO was using as a platform, into Ethereum and Ethereum Classic (ETC). Proponents of the ETC split-off considered the loss of funds a valid consequence of the immutable nature of the blockchain technology, whereas the original chain chose to expropriate the stolen ETH from the hackers and return them to the investors.

Where is it now? By December 2016 the DAO trading pairs had been delisted from all major cryptocurrency exchanges. The project was dead long before that, however: the last update to its GitHub repository is dated July 30, 2016.

Telegram Open Network

Date of ICO: February-March 2018

Funding secured: $1.7 billion

Current market cap: n/a

Telegram Open Network was an ambitious project by Pavel Durov, the co-founder of the VK social network and the privacy-focused Telegram messenger, to create an entire ecosystem of blockchain-powered products around the latter platform. It was supposed to include, among other things, a decentralized payment alternative to systems like Visa and MasterCard, and a platform for DApps and services, similar to Google Play and App Store.

In order to fund the development of the Network, Durov announced a massive private sale of Gram token futures, later to be converted into actual cryptocurrency tokens. After the two sale rounds, conducted in February-March 2018, TON has successfully secured $1.7 billion in funding from private investors such as the Russian-Israeli businessman and politician Roman Abramovich.
That success was not to last, however, as in October 2019 the U.S. Securities and Exchange Commission (SEC) halted the distribution of Gram tokens, contending that the sale was an unregistered distribution of securities. After several months of legal proceedings, the SEC and Telegram have reached a settlement, according to which the latter had to refund $1.22 billion to its investors and pay an $18.5 million penalty to the SEC, ultimately ending Telegram’s active involvement in the TON development.
Where is it now? The project, now referred to as The Open Network (TON), is still being (unenthusiastically) worked on by several groups independent from each other and Telegram itself. The most known of these is the TON Foundation — as of August 2021, it has a grand total of 118 followers on its Twitter account, with the last post made in March 2020.

ICOs in Limbo – Some With a Whimper


Date of ICO: June 2017-June 2018

Funding secured: over $4.2 billion

Current market cap: $4.9 billion

EOS (EOS) is an example of an ICO-funded project that has managed to make impressive early gains only to then lose a great degree of relevance as the market moved on to other products. Proclaimed by some to be the “Ethereum killer” due to its focus on providing a similar platform but without many of Ethereum’s flaws, EOS has managed to secure more than $4.2 billion in its year-long ICO funding round. It was the largest ICO campaign ever by a wide margin, outstripping even TON’s massive $1.7 billion.
EOS started out strong, reaching a market capitalization as high as $17.7 billion in April 2018. Later, however, a string of disappointments has led to its uninspiring performance as an asset. EOS network experienced significant congestion issues towards the end of 2019, despite the fact that high transaction capacity was one of its main selling points. Later, reports by Binance and other industry experts have indicated that EOS is not as decentralized as it could have been.
EOS ecosystem saw an 86% decline in developer activity in 2020, and Dan Larimer, a blockchain industry pioneer and former CTO of (the company behind EOS), announced his resignation on December 31, 2020, resulting in even more uncertainty in regards to the platform’s future.
Where is it now? It would be entirely unfair to call EOS dead: as of August 2021, it still boasts an impressive $3.7 billion in market capitalization, as well as a high daily trading volume, which is a good indicator of a crypto asset’s “health.” However, for a coin that used to occupy the fifth highest spot by capitalization, and in a market that is not unfamiliar with 10x and 100x increases in asset value, EOS’ performance has been underwhelming at best.

Dragon Coin

Date of ICO: March 2018

Funding secured: $320 million

Current market cap: $1.5 million

Dragon Coin (DRG) is a project that didn’t necessarily completely disintegrate but is nevertheless, for all intents and purposes, dead. An example of the sheer madness that was the ICO bull market at its very peak, Dragon Coin sought to raise $500 million to fund the construction of a multi-story, 400-room, energy self-sufficient floating casino, originally based in Macau but able to relocate anywhere in the world if necessary.
It did manage to come pretty close to the target with $320 million raised in the March 2018 ICO and another $60 million in early investments, but problems immediately followed. The Thai Crime Suppression Division opened an investigation into the crowdsale only to find out that several million dollars received from private investors have ended up on private bank accounts of a number of Thai nationals, one of which has fled the country in an apparent attempt to escape justice.
Later it was also revealed that the Norwegian construction firm Brova Idea, which was supposedly contracted to design and build the floating casino, had abandoned the project in November 2017 — long before the start of the public ICO. Predictably, DRG’s price tanked by as much as 79% within less than a week of public trading, never to go up again.
Where is it now? The coin still exists in a kind of zombie state — sitting at just over $1 million in market capitalization out of more than $300 million of its original funding. It can even be traded against Bitcoin and Ethereum on a single crypto exchange, HitBTC. The two pairs combined have a whopping $2 (yep, two U.S. dollars) in average 24-hour trading volume as of August 2021.

Sirin Labs

Date of ICO: December 2017

Funding secured: $157.8 million

Current market cap: $7 million

Sirin Labs (SRN) is a producer of high-end privacy-focused smartphones. Its first product was Solarin, released in 2016 to much fanfare but little demand. Its prohibitively high price (about $16,000) and lack of serious competitive advantages in the software and hardware departments, other than increased data security, have ensured its failure as a product. A year later, the phone was discontinued and a third of Sirin’s workforce was laid off.
At the end of 2017, however, Sirin Labs conducted an ICO to help fund its next product — a similarly privacy-focused smartphone, called Finney, albeit this time much cheaper and with integrated blockchain functionality. For some unknown reason, people bought into it, resulting in a $157.8 million public funding round. Fast forward a little over a year, and Sirin lays off a quarter of its workforce amid lackluster sales of the new phone. Sounds familiar?

By that point, however, the SRN token that was sold to the public during the ICO had already lost more than 99% of its value and was well beyond saving.

Where is it now? Although a bit more lively than Dragon Coin, Sirin Labs token is still pretty much dead now, with a market cap at just a small fraction of what it used to be and trading volume in the tens of thousands of dollars. The company behind the token recently revealed the release of its third smartphone model: as of August 2021, the tweet announcing the news boasts exactly 22 retweets.
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