Initial Coin Offerings

For better survival chances, ICOs need to do this one thing

A recent study has revealed the one thing that ICOs need to do if they are to boost their survival chances. The study was jointly conducted by Emmanuel De George who is an assistant professor of accounting and fellow academics from Columbia Business School and the University of Utah.

With over 75% of ICO projects dying within the first six months, what De George and his fellows sought to understand was what made the difference between the surviving 25% and the rest. They analyzed 776 projects and realized on top of having good ideas that were solving real problems the one other thing that stood out was transparency at the beginning.

ICOs that failed to give their investors proper detailed disclosure at the start had higher chances of failing as time progressed. Part of the necessary information that should be revealed at the outset includes availing the source code of tokens to show that there is a  finite supply of the and also revealing that tokens held by founders will only be cashed after a period of time and not immediately after the issue.

Also, it’s crucial that ICOs provide informative white papers and also seek to be rated by top firms like ICObench, ICO Drops, ICORating and ICO Alert as this helps reassure the investors.

The high crash rate has alarmed regulators who have resulted in warning investors of the potential dangers of investing in ICOs however, despite this ICOs have experienced high growth rate and De George said “ICOs are running at a rate of about 100 a month, We don’t envision that to be slowing down at all.”

Adding:

“What you are seeing is a lot of entrepreneurs with a lot of ideas. This is by far the cheapest way of raising capital these days because you don’t have the regulation that comes with other forms of capital raising.”

Recently Autonomous Research LLP released data that indicated that ICOs have already attracted 12 Billion in 2018.

Do you agree that being transparent is the one thing ICOs need to do if they are to boost their chances of survival? Share your thoughts in the comment section below.

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Basil has three years of freelance experience writing on disruptive technologies. He focuses on breaking news and education pieces; helping to spread the gospel of Blockchain. He hopes to have his own blockchain company one day; helping the world through its innovative ledger technology.

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