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Odd of success: ICOs vs VC funding – Where is the best bet?

A Chinese report from CAICT, a scientific research institute under the Ministry of Industry and Information Technology, has revealed that 80,000 blockchain projects have been launched worldwide since 2009. Of those, only 8% are still being maintained, leaving 92% of all projects abandoned by the team. Furthermore, the average lifespan of those projects was just 15 months, a staggeringly fast rate of failure when the current number of ICOs being launched is taken into account.

Even if this sounds discouraging, it is somehow understandable. 75% of venture-backed startups fail (https://www.fastcompany.com/3003827/why-most-venture-backed-companies-fail). So if 75% of companies built by capable teams and backed by professional investors are failing, there is no surprise that 92% of projects built by pretty much anyone (sometimes even anonymous developers or using fake identities) and backed by pretty much anyone (even kids or people who don’t understand the technology or the risks) don’t succeed. But despite the crash in the last few months, the number of ICOs didn’t drop so much and they are still raising money (https://coinspeaker-yyissxxdmt7hpv.netdna-ssl.com/wp-content/uploads/2018/07/ico-market-analysis-q2-2018-figure-1-1.png).

On the other hand, some projects are constantly building products and continue growing their ecosystem and communities. Not all of them are ready for production yet, but they are on the right path. Developing products using cutting edge technologies takes more time and is more complex, but the rewards are also bigger because they revolutionize their industries by solving old problems using new technology.

The following are a few post-ICO projects that seem to be on the right path leading to success:

LOCI – disrupting the global patent industry by using blockchain technology to empower aspiring inventors to search, analyze, protect, and monetize their ideas without requiring them to first secure an expensive and time consuming Patent;

Augur – a fully decentralized prediction market platform running on the mainnet, and one of the first ICOs on Ethereum;

Maker DAO – a DAO that manages the supply and price volatility of its own stable coin, DAI. It is already considered a success after proving itself in the bear market, even with ETH price dropping over 80% since January 2018.

Basic Attention Token – improves digital advertising by creating a token that can be exchanged between publishers, advertisers, and users. It has strong integration with Brave browser, as it is built by the same team.

While most startups fail, especially in a dynamic environment like crypto, there sure are projects that will succeed and have great returns. Think of the dot-com bubble, when the overwhelming majority of web projects failed, but companies like Amazon or Google adapted and survived. Nobody thought they will become what they are today, and the same can be true for the stronger crypto projects in their early stages right now. So, place your bets on the long term, invest when there is “blood in the streets”, and choose wisely.

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