Since the initial coin offering (ICO) market keeps slumping, new tendencies are starting to emerge, offering investors new chances.
Projects offering utility tokens have become less popular, whereas those providing support or security components are increasing, according to a new report from rating bureau ICORating. But, despite being in decline, utility token offerings collectively with hybrid token offerings continue to be the most successful ones, the report revealed.
“In comparison to Q2, the number of projects offering service tokens increased by 6.55%. The share of projects that offer security tokens improved by 1.66%. The number of projects with utility tokens decreased by 10.07%,” according to the bureau.
The numbers keep halving, together with approximately 12.5% of jobs offering hybrid tokens (payment for providers + bonuses for work performed), about 6.5% promoting security tokens (tokens secured by a responsibility, like guarantees of dividend payment, receipt of company shares, etc.), etc..
But just because half of ICOs are providing a specific kind of token, doesn’t mean that this is what investors want. A hybrid vehicle, reward, and usefulness tokens are the ones raising the most capital in this quarter. In contrast, cryptocurrencies, service, and security tokens all increased less compared to a median amount of USD 250,000. Service tokens were the most likely to fail, with approximately half of these projects not creating it. Only hybrid token projects had more successful projects than failed ones. This might indicate is that investors are looking for more options given in the tokens, preferably returns coming from several sources (both from bonuses and services, for instance ) and that project teams are a bit slow to catch on.
Number of active projects and their financing
Close to half of ICOs originated in Europe. Lately, the SEC settled charges with two such companies, Airfox and Paragon Coin, mandating they register their offerings as securities and reimburse investors because of improperly offering digital tokens.
Other US authorities are stepping up to help modulate the distance as well. After the case, the Federal Bureau of Investigation (FBI), said they would “continue to pursue any person who seeks to profit by exploiting others.” Further, the SEC was also filing associated civil charges from Zaslavskiy, which should be settled after the court’s criminal sentencing.
Following these situations, the SEC released a”Statement on Digital Asset Securities Issuance and Trading,” detailing how ICOs must be held to stay compliant with all current regulations, mostly telling prospective ICOs to enroll. The community’s response to this is mixed: Reddit consumer, u/WantedToGetInvolved, writes, “Blockchain businesses should steer away from those restrictive frameworks and take innovation elsewhere,” while u/elizabethgiovanni writes, “That is good news because organizations and funds and high net people will not touch this space without even know what danger they’re exposing themselves to.”
The regulatory difficulties in America are prompting some investors to bypass this industry altogether. “Europe is the jurisdiction for STOs because we don’t have the draconian security laws which America has. America is going to likely be off the books since they are set and costly to perform,” he explained.