Type of disclosure affecting the success of ICO

By Lawrence Hecht

Information on token launches are not regulated, but the professionalization of the ICO process – also known as token generation events (TGE) has led to several predictive practices of success. The first evidence on the role of disclosure in the unregulated encryption market is a quantitative analysis of 776 attempts made up to February 2018, of which 659 fulfilled an ICO satisfying its regulatory requirements. variable capital financing. Strategic Corner has spoken with two of the co-authors – Atif Ellahie and Daniele Macciocchi of the University of Utah – to better understand their approach to collecting and analyzing data. Ironically, future studies can be strengthened if data on ICO pricing and other variables are more consistently available, which would allow researchers to use a much larger sample size bigger. Here is a summary of the main findings and a discussion of their ramifications

• Positive "Ratings" = More money: Higher scores on ICObench and ICOrating on average raise more capital. In addition, these tokens see a larger increase in prices since the end of the ICO until the end of their first trading day on a stock exchange. The ratings are based on data disclosed by ICO teams and qualitative assessments by "experts".
• Token Distribution Details = Less Money: ICOs that disclose the ownership levels of the founders collect less money than other tokens. The OICs that disclose information on the acquisition of the post-OIC tokens see on average a slightly lower price change from the OIC at the end of the first trading day on a stock exchange.
• GitHub is good: Only 15% of the missing ICOs revealed the source code via GitHub, compared to 51% of completed token launches.
• GitHub is Bad: Projects that reveal the source code are significantly more likely to "crash" or fall by at least 75% in the first, three or twelve month period after the token is registered on an exchange. The authors explain that it is possible that "technical disclosures represent proprietary information that subsequently erodes the competitive advantage of these virtual organizations." In other words, for young tokens, there is a quantifiable risk of an open source fork.
• The quality of white paper is more important than the quantity: The more readable white papers are less likely to see a drop in prices. On the other hand, an increased number of pages is associated with a statistically significant increase in the risk of an accident after the listing of the token on a stock exchange.

At first sight, it seems that ICO rating sites fulfill their mission of providing information that has a positive impact on investors. the decisions. This may be true, but there is another explanation. The most important and best funded ICOs usually have the ability to operate in a very professional manner and have the resources to get assistance at a symbolic launch. The professionalization of ICO marketing means that having a white paper, a presence on social media and disclosing LinkedIn profiles of team members has become a major issue.

Some sites like ICObench see positive network effects only having the time to complete detailed profiles on a few sites. This does not mean that the analysis on the sites is unbiased, just that they have data that investors want. In fact, the recent blog of Althena, the co-founder of Markus Hartmann, provides evidence that these crowdsourcing evaluation sites can easily be manipulated. He also alleges that the ratings may be purchased, but Strategic Coin has no independent information about it.

Full Disclosure: Strategic Coin provides independent due diligence chips, which is sometimes cited on other sites

not to disclose much quality information often fail because they have launched too early or were not strong enough. Those who succeed in meeting their softcap requirements generally disclose information as part of a maturing process. That being said, there are still short-term incentives to not provide limited information about the property of the founders and the acquisition of rights after the IOC. However, it is also likely that because they disclose more founder information, these same tokens may be more stable in the long run.

This article also examines the impact of social media activity on the success of the ICO. The study looks at the return on investment, but it also considers volatility and risk as criteria that potential investors care about. Another study – Digital Tulips? Hugo Benedetti and Leonard Kostovetsky, Carroll School of Management, Boston College, conduct a deeper analysis of return on investment and examine how prices move from a final public sale to an opening price in stock exchange. 19659010] Future studies will have to study in more detail how price and value change over time. While most analyzes assume that the final sales price of an ICO is used to calculate the return on investment, it's only because these data are more readily available. However, savvy investors prefer to look at the average price per share of a public sale. In addition, with limited information on pre-ICO or private sales, it is difficult to assess how valuations change over time. With a live sale before ICO for two current public ICOs, these data are important. Another difficulty encountered by future researchers is that post-OIC acquisition information is not collected in a standard way. In other words, calculations assuming that market capitalization divided by the number of chips flowing may not be a reliable way to evaluate the return on investment.

Strategic Coin is a leading provider of market and sector research. to the blockchain industry. Strategic Coin is known for: 1) Comprehensive Reports on Viability Assessment and Strategic Assessment (VISTA) that are the most detailed view of a project's usefulness , value of the platform and long-term prospects; 2) customized consulting services for global token generation events; and 3) the Strategic Corner Media Network, which distributes stories, videos, in-depth analysis and thought leadership articles that stand out for their quality and depth.

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