Innovations in Crypto Assets! A new approach to tokenization

Innovations in Crypto Assets! A new approach to tokenization

Education Investment
August 13, 2018 Editor's Desk
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After analysing the quarter two of 2018, we bring you the insight details of various tokens offered by ICOs and their performance in the ICO market. The second quarter of 2018 was quite interesting as we witnessed that ICOs ditched old ideas and came up with new ones. Some of these ideas were hits while others
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After analysing the quarter two of 2018, we bring you the insight details of various tokens offered by ICOs and their performance in the ICO market. The second quarter of 2018 was quite interesting as we witnessed that ICOs ditched old ideas and came up with new ones. Some of these ideas were hits while others missed capitalizing on the market.

Let us look at the various tokens offered in Q2 of 2018.

Utility Token: As the name signifies, these tokens create utility for the token owners as these were the tokens of a protocol. They are basically two ways of providing utility to token owners –

  • By giving access to network or service feature
  • By allowing token holders to actively contribute work to the system

Some tokens are capable of giving both facilities to the holder while few others don’t provide any utility. Q2 of 2018 saw the capitalization by Utility token. There was a surge of 32% in projects offering utility tokens. The token to raise highest mean funds was utility token accounting to approximately $22 million.

Security Token: These tokens are issued on the promises of dividend payment, receipt of company shares, credit tokens, etc. These tokens are subject to federal security regulations and failure to abide results in penalties and even derailment of projects. Security tokens accounted for 4.88% of project shares in ICO market. The Q2 of 2018 was quite upsetting for security tokens as there was an 8% decrease in projects offering security tokens. The mean fund raised by security tokens was bleak and far less than $5million.

Vote Token: These are the tokens which make the token holder powerful and give them the right to vote and the ability to influence the development of a project. Vote tokens accounted to only 0.27% of the total number of on-going projects in Q2 of 2018. The share of mean funds raised by vote token was less than $1million.

Service Tokens: Now we are talking about the tokens on which maximum projects tried seeking funds. The service tokens are exchanged in place of the services offered by the project. Though the number of projects offering service tokens decreased by 24% even after that 42.5% of all projects were based on service tokens. The market capitalization of service tokens lags far behind of utility tokens and it grossed the mean funds raised accounted to about $6million only. On the contrary, the maximum number of unsuccessful projects were marked as service tokens. Q2 of 2018 saw more than 150 service token based unsuccessful projects out of total 827 projects initiated in Q2.

Reward Tokens: These are the tokens which are awarded to the contributions of the participants of the network. A total of 0.81% of projects was based upon reward tokens. The performance of Reward tokens was better than service tokens, hybrid tokens and vote tokens. The funds accumulated by reward tokens were more than $6million. The probability of success and failure was equal in reward token meaning almost equal number of projects succeeded and failed in Q2.

Hybrid Tokens: This is one fascinating type of token where the token is given for the services as well as for work performed for the network. 15.04% of total projects were giving Hybrid tokens to network participants in Q2 of 2018. The mean funds raised by Hybrid tokens were about $6million. There were about 60 successful projects which gave Hybrid tokens and the number of failed hybrid token projects were less than 50.

Cryptocurrency: Now we are talking about the buzz of the decade.

Paul Vigna once said, “The whole human populace is now taking charge of the means of production and changing the rules of the game. They’re making their own freaking currencies, for God’s sake!”

This is very evident with the pace of ICOs coming up with their own currency.  1.36% of total projects launched their own cryptocurrency with no additional exceptional features. These new cryptocurrencies raised a mean fund of about $7million. Most of these projects were unable to succeed.

The second quarter of 2018 was evident in the fact that innovations in the Blockchain industry are the new normal. Experts are following the trend and investors are cashing out the opportunities. Entrepreneurs are getting new ways and means to implement their ideas. We expect the same trend to continue in the rest of the year.  

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