The crypto bear market has lingered over a year now, and it is unclear when the bulls are going to kick in again. This bear trend has impacted ICOs most severely. Despite the bear trend and the skeptical approach of retail investors, a staggering 48% of ongoing ICOs still lack a Minimum Viable Product (MVP) according to the statistics from Icobench.
A Minimum Viable Product is a product just enough to satisfy the curiosity of early customers and investors about the capability of a company or team. In most cases, the MVP is created and showcased before a company or team seeks outside funding.
Several crypto projects will woo the community with their plans and projections to raise funds. However, with the added difficulty of raising funds in the bear market, it is staggering to see ICO projects without an MVP.
The number of completed ICOs has been in a decline since the beginning of 2018.
In February 2019, Icobench reported 78 completed ICOs, which is about half of the completed ICOs reported in January. What’s more, only 23 of February’s ICOs raised funds. However, 11 ICOs rescheduled for the next few months.
Although the success rate of ICOs dropped to 29% in February (compared to 32% in January), more ICOs reached the soft cap in February (31%) than in January (25%).
Ongoing ICOs: March and Onwards
There are 439 ongoing ICOs, and 48% of them lack MVPs. This means that over 200 ICOs currently raising funds do not have an MVP to reassure concerned investors.
Crypto projects that are built on other blockchains (or that do not require a blockchain) can definitely have an MVP before starting an ICO. Projects that are building a brand new blockchain may not be able to do this, but the capability of the team can be proven and shown in other ways.
The ICO model of fundraising is being contended by STOs, which is presumed to be better and safer for retail investors.
As the chart below shows, the keyword “STO” has enjoyed a lot of popularity in recent times (measured by Google Trends). However, very few projects in the crypto space have gone in that direction. This may be due to the uncertainty that still revolves around crypto regulations.
STOs offer tokens that are classified as financial securities for accredited investors. There are several platforms by which security tokens can be accessed, and there are plenty of examples of security tokens on the market already. There is also less pressure on STOs to provide an MVP because the tokens constitute financial security recognized by law.
While ICOs with an MVP seem more credible than ICOs without an MVP, retail investors do not appear to care so much about that, as currently less than half of the top 100 cryptocurrencies have working products that are in use.