Satis Group, the leading advisory group on ICO issues, classified the primary location of the tokens by their quality to demonstrate a real picture of the actual progress of the projects. According to Satis Group's findings, almost 81% of ICO turned out to be fraudulent, and only 1.6% have real prospects for success.
The Satis Group classifies ICOs from the first fund-raising offer until the appearance of the token on the exchange. Researchers divide the projects into the following groups:
Fraudulent
These are the ICO projects aggressively advance through social networks and press people into immediate investment. Usually they offer great profits and low risks, while the project team isn’t disclosed, and Whitepaper is either missing, or the necessary information in the document is small. Such projects are not initially set up to create a useful product and disappear when they collect a sufficient sum of money.
Failed
The projects that fell into this group managed to collect a part of the funds, but did not achieve the set goals. They are a bit different from scammers, because they return money to investors if the project was unable to collect the minimum amount claimed by the startup when entering the ICO.
Not reached the stock exchanges
These projects are exactly in the middle between those that achieve success and those who fail. Similar to ICO it is possible to raise funds and complete the process, but they can’t achieve the required liquidity because no stock exchange accepts them.
Developing ICOs
Developing projects succeeded in raising funds, completed the ICO process and enrolled in stock exchanges. They meet at least one of the following success criteria:
1. Deployment of the block / distributed registry / product / platform;
2. The presence of a clear and transparent map of technological development on the site;
3. Make changes to the code on GitHub for at least three months in a row.
Successful ICOs
Projects that meet all three of the above criteria.
Conclusion of the researchers
According to Sherwin Dowlat, an analyst at Satis Group, the results of the study are very depressing. Dovlat and his team came to conclusions after analyzing the ICO rating sites. Below are the results for ICO projects worth more than $ 50 million:
• 81% - fraudulent projects;
• 6% fail during fund-raising;
• 5% cannot get tokens on stock exchanges;
• 4.4% fall on exchanges (developing);
• 1.9% - successful projects;
• 1.8% - promising projects.
Research Satis Group once again confirms that it is necessary to be extremely cautious when investing in ICO and carefully study the project before transferring money to its development. It is worth paying attention to the partners of the project - if among them there are large companies, this can reduce the risk of investment. However, it is worth making sure that statements about partnership are true.