Summary of study
The crypto-asset universe has grown exponentially since the introduction of platform networks. In 2013, the market was made of just 14 crypto-assets that were largely spin-offs of Bitcoin with similar applications.
Now, there are over 1,500 crypto-assets with over half being tokens created on top of other networks.
This is part two of a five-piece series initiating coverage on the crypto-asset market.
The initial note published on June 28, 2018 focused on the Technical Underpinnings of crypto-asset networks and associated distributed ledger technologies.
Continuing the coverage initiation, this note will explore Network Creation through the following topics:
- Networks Created by Genesis Blocks versus on a Platform
- Ethereum, Smart Contracts, and Scaling
- Platform Network Landscape
- Network Structure and Cryptoasset Distribution
- ICO Market: Process, Insights, Quality, and Use of Funds
- Although half of all crypto-assets are classified as tokens (built on other platform networks), nearly 90% of the value resides in coins.
- Further, the velocity of tokens is ~4x that of coins.
- The median platform network trades at ~4x the total value of the overlying tokens built on it.
- ~12% (~$5.4B) of the circulating supply of ETH is held by the top 115 ICO's, and ~3% (~$1.3B) is held by the top 20.
- The current ETH balances of the top 10% of ICO's is equivalent to ~50% of the total funds raised to-date, while the top 2% holds ~10%.
- Over 70% of ICO funding (by $ volume) to-date went to higher quality projects, although over 80% of projects (by # share) were identified as scams.
ICOs are growing in popularity
However, reports such as the above along with another recent claim that one in five ICOs turns out to be a scam don’t seem to be putting investors off.
Indeed, roughly $6.6 billion was raised via 217 ICOs for the first quarter of this year.
This constitutes a massive 65% increase from the $3.9 billion (itself a record, at the time) raised in the final quarter of 2017.
Cryptocurrencies are made possible by blockchain technology. This is why at one time, to begin with, most ICOs were launched by blockchain start-ups.
Nowadays, lots of other kinds of companies and organizations are choosing to run ICOs in order to fun their respective projects.
Even companies that don’t specifically require the use of blockchain technology are using them.
Despite the endless bad press, nothing, it seems, has yet been able to derail the ICO train, so to speak.