Many factors contribute to the success of Initial Coin Offerings (ICOs), such as the utilization of decentralized ledger technologies and ease of cross-border transactions. Despite the growing popularity of ICOs, the impact of “the bitcoin explosion” still lingers and it is yet to be seen what the next big thing in the cryptocurrency industry will be.
To make informed investment decisions, it is important to perform thorough research on the company and its white paper. To assist in this process, it may be useful to explore the most successful ICOs. Here are seven of the most successful ICOs in no particular order:
- Ethereum (ETH)
- EOS (EOS)
- Binance Coin (BNB)
- Telegram (TON)
- Dragon Coin (DRG)
- Filecoin (FIL)
- Telegram Open Network (GRAM)
Conventional business growth follows a predictable path, starting small and expanding as profits increase. Businesses may also seek outside investment by transferring ownership for a quick influx of cash or by going public through an Initial Public Offering (IPO) and offering shares of the business (also known as stock) on the open market. Investing in ICOs can be risky, so it is important to fully understand the project before making a decision.
Factors that Contribute to the Success of ICOs
Over the years, the ICO industry has seen tremendous growth, but what were the driving forces behind this success? Here are some key elements that played a role:
- Utility
The usefulness of the coin is one of the most critical success factors for an ICO. While ICO experts may have differing opinions, most agree that the coin must serve a purpose beyond simply being traded on an exchange. The best performing ICOs stand out from the rest due to their practical applications.
Demonstrating the usability of the ICO can increase its chances of success. This can be achieved by providing investors with a demo or visual model that shows how the project will operate and its benefits. Additionally, a trustworthy ICO platform that brings together various stakeholders and offers a centralized dashboard can aid in customer acquisition and increase the likelihood of success.
- Strong Marketing, PR & Communication Strategies
Even the most innovative concept can fail if the launch team’s PR, marketing, and communication strategies are lacking. A comprehensive marketing plan and clear communication can greatly increase the chances of success. This includes a website, white paper, e-newsletters, and social media accounts that are easy to understand and free of jargon. The website and Alexa Rank can also play a significant role in the ICO’s popularity and success.
- Community Support
ICOs that are active on social media and discussion forums tend to be more successful than those that are not, according to studies of past successful ICOs. Research by the cryptocurrency startup RAD Lending Inc. shows that successful ICOs have 4,000 to 5,471 Twitter/Facebook followers. Teams who engage with the public on websites like Quora, Reddit, and Telegram tend to attract more potential backers and have access to a larger pool of funding.
- ICO Audits for Trustworthiness
Companies that have their ICOs audited by independent advisory firms convey reliability to potential investors. This is important because ICOs can sometimes be used by fraudsters to prey on unsuspecting investors. Audits can uncover possible issues with the ICO, such as its corporate governance, financial model, or projections, and provide investors with confidence.
Benefits of Participating in an ICO
The benefits of participating in an ICOs are what has made them increasingly popular. Some of the advantages for contributors also apply to founders. These incentives motivate more people to invest in ICOs instead of alternative options.
- Liquidity
Lack of liquidity is a common barrier for people seeking new investment opportunities. Capital can be inaccessible for years in some cases. With ICOs, investors have great liquidity and the secondary market, which means the real-time price is based on the project’s current value.
- Decentralization
Anyone can participate in ICOs, especially if they use bitcoins. For most ICOs, the only requirement for contributors is the ability to transfer funds in time to make a purchase.
- Openness
ICOs allow anyone to invest and also allow for flexible investment times. Unlike conventional startup finance models, this makes it practically impossible to be an early investor without a personal relationship with one of the founders.
