Following the recent spate of experiences in crypto space coupled with many failed ICO and by extension crypto projects, one tends to wonder the connection between ICO and failed crypto projects which lead to series of questions that are asking for answers. Some of these questions were answered thus:
CAN A PROJECT SURVIVE WITHOUT AN ICO?
This is a very good way of asking if ICO is a necessity to the survival and success of a blockchain and crypto currency project. Well, originally ICO has been used in many occasions for the Initial fund-raise and promo for new project entry to the blockchain family. This ensures that the project does not suffer any financial crunch that will hinder the completion of the project in any way; Suffice to say that every administrative cost is built in the fund to be raised over a fixed period of time before the project on its own will start reeling in income. Although in recent times, this has been over used and abused. While ICO seem to be one of the best ways of raising fund for Blockchain and crypto currency projects, there are other options that can be explored for a successful funding in the wake of several failed ICO. We have witnessed projects that did 100% airdrop like NO BS CRYPTO project and of course other projects that used crowd funding to raise funds other than ICO. The SUCCESS OF AN ICO is measured based on two criteria; SOFT CAP & HARD CAP.
WHAT ARE SOFT CAP & HARD CAP?
SOFT CAP is the minimum required running cost that is needed to get a project on its feet while HARD CAP is the maximum required overhead cost expected in the course of a crypto project. From experience not many projects exceed their HARD CAP, though a good majority barely exceeds their SOFT CAP. The SOFT CAP seems to be a major indicator that determines the success of most ICO and crypto related project. Many crypto related projects with lofty idea were truncated half way due to inability to reach its SOFT CAP. This may originate as a result of perceived investors apathy or lack of interest. Investors like every business man is profit oriented and does not risk his pocket for projects whose sure returns are uncertain. The eventuality of not being able to reach a SOFT CAP of a crypto project is termed “a failed ICO”
IS A FAILED ICO A FAILED CRYPTO PROJECT?
Ordinarily, a failed ICO results to a failed crypto project. A good example is ARTICLEX that has a compensational undertone for both publishers (bloggers, journalist, writers, etc) and reader alike. This project died out simply because they were far from reaching their SOFT CAP despite the community strength of well over 50k. This should not be so since it is glaring evident that too many cryptos fund-raise has been solely sourced via ICO. Again, it could also be that so much external involvement is expected in the execution of the project besides having the vision for the project. The circumstances of actually averting a failed ICO becoming a failed crypto project is possible if some of these checks could be put in place:
When a cofounder doubles as a developer or plays an active role in execution of the crypto project, a lot of overhead cost is saved. It makes the project a lot cheaper to execute but not in value. The project also becomes faster to execute and sustained longer in the face of a difficult dynamics in the predominant market situation. Take for instance, I run https://cryptoairdropbounty.com. Fortunately, I render over 90% services needed to run it actively. Sometimes, I imagine the cost of running this blog if I were to engage the services of a second party. I may have been out of service by the first few month of launch. When there is lack of fund to run the initial overhead cost before the crypto project picks up is one of the reasons where a failed ICO easily results to a failed crypto project.
Some crypto projects create fake use cases that are not relevant to the crypto industry or not even in existence to arouse the feature of a USE CASE to attract investors. Prevalent USE CASES carries the crypto project beyond the judgment of the fund raised during the ICO. USE CASES sustains the project and its ecosystem to further create a continuous income as long as the product and services of such crypto projects meets dire needs and are problem solving. With a teeming community of people willing to use a product and service for a fee, the fund raised from such project through ICO is immaterial.
Also good a thing many flexibilities are being introduced to the blockchain industry. The free listing services of some exchanges (centralized and decentralized alike) for crypto project that met some criteria other than outrageous payment for listing is a very good welcome development. Gone are the days when crypto projects use a better part of funds raised from ICO for exchange listing purposes. Projects owners and founders should do their due diligence to check these conditions and save their projects funds from the preying hands of some crypto exchanges.
With other forth coming positive changes, there are high tendencies and expectation that the success of a crypto project will not completely rely on the success of its ICO. So in all, a failed ICO is not necessary a failed crypto project.