What seemed too good to be true, has foreseeably proved to be it. It seems like the highest high that crypto devotees have discerned in the last and past few years, have now faced the low tides of the crypto seas. The culprit? High-profile fraudulent activities and a range of other malpractices revolving around cryptocurrency. The amount of backlash and flak it’s been receiving coupled with FUD being spread by financial powers in the media is just adding to the descent. This in turn, has had an adverse effect on the faith in Initial Coin Offerings as a means of fundraising, owing to the increased cautiousness of investors. Because this method is taking a turn for decline, firms are now looking at alternative sources of fundraising and using the blockchain innovation. Among this is crowd funding, which hopes to be a fresh wave in the cryptoseas. Other than this slump, the cryptosphere seems to be sailing smoothly. There are a lot of firms reassuring the stay of crypto by investing in blockchain phones, crypto debit cards, and ample other innovations in order to make cryptocurrency readily available to people and easy-to-use. THE REASONS BEHIND THE FALL OF THE ICO The ICOs are notable losing out on their loyal followers owing to a plethora of deceptive activities this year. Robbery and frauds have contributed to the fall of the mighty traditional Initial Coin Offering. One remarkable example is the case of Centra, an ICO which came under fire by the SEC after merging with known names in the entertainment and sports industry like DJ Khaled and Floyd Mayweather. The amount of publicity one gains after being endorsed by influencers is unmatched and is a sure shot way of turning around ones reputation — then even if it means supporting a ‘shitcoin’. Once the damage is done, the lost loyalty is tough to bring back and knowing the colossal following both of these have, a great deal of negative awareness was spread on the ICO domain. Any growing venture needs to be recognized and in sync with the authorities, or it cannot be counted as being legal, and so is the case with the crypto space which has requested the involvement of financial authorities. Most of these authorities are shaming the absence of a systematic approach in the crypto domain already. The reason why investors are playing coy about investing in digital currency is because there are no systems in place to protect them although blockchain technology is a bearer of innumerable advantages. ICO fundraising is on the down low because of other reasons too. Believe it or not, in an effort to warn the public about the perils of investing in Initial Coin Offerings, the SEC recently launched a ‘fraud’ ICO. It is still debatable on how many people were actually deceived by this inconsiderate move. Numerous crypto-news agencies covered this ‘scam’ ICO and their spurious offerings, so it can be derived that this was carried out by members of the crypto community itself, with the knowledge of it being fraudulent. This just added fuel to the already rattling fire of Initial Coin Offering concept. An even shoddier example of besetting uncertainty in the minds of people regarding ICOs was a PR stunt performed by the owner of SaveDroid, Yassin Hankir who convinced his investors into thinking he had conducted an absconding scam. This news spread like wildfire in the crypto community and many of these SaveDroid backers were broken with the thought that their hard earned life savings had gone down the drain. This led to doubts arising towards recognized crypto sites like ICObench, who were either thought to be bribed or incompetent. Although ICObench had nothing to do with it, its name was tarnished owing to the nature of bad news. NEWER, BETTER SYSTEMS TO DETHRONE THE ICO All said and done, the crypto empire still seems to be reigning and powerfully so. The crypto space still insists on growing each passing day with newer, bigger industries adopting it every day in different ways, the ICO not being completely void just yet and blockchain based businesses popping up practically in each domain. The fall of the ICO only means that it will be substituted by another, more trustworthy fundraising approach which would re-instil the lost trust and provide clarity that the investors, businessmen and regulators deserve. A lot of the existent blockchain based businesses are looking into polishing their methods in order to meet the requirements of regulators and tackle their own needs. Hence, even though the ICO drama is on the rise, we see the crypto community prospering on its own. For example, due to the tarnishing of its name, advertisements related to cryptocurrency have been prohibited calling them ‘misleading’ and ‘opportunistic’. This barring has led to a decline in luring supporters for the same and with respect to this, many new firms are now holding ‘airdrops’ as a way of building appeal. You may be wondering, what are airdrops? They are nothing but free token distributions that motivate the community into gaining knowledge about a particular project. Basically, they are a part of the blockchain-based marketing schemes and are believed to exist even if the ICO completely shuts down. Some projects have taken the onus of raising funds on themselves. Blockhive as an example has raked in funds through way of ‘initial loan procurement’ — a new way of crowd funding which makes use of cryptographic tokens to give access to investors for signing loan conformities on the blockchain. Similar to the ICO, this structure of fundraising lets consumers purchase the company’s native tokens, but rather than utilizing them for services granted by the issuer, they will be legally bound to access loan agreements. This initial loan procurement will make registrations to be done by necessitating KYC or AML documents as an initiative to safeguard creditors which in turn makes the ILP regulation-friendly by construct. Although borrowed funds are a more common way of raising funds, ILPs let any individual with the capabilities and sufficient money to become a creditor. This paves the way for startups that are often shun by banks and other financial institutions because, according to them, the idea isn’t ‘fool proof’ or they fail to understand it. Again drawing similarities to the ICO, this method standardizes crowd funding but goes ahead and legalizes the same. STOs are a heaven-sent for trades involving bonds, shares, and other intangible assets — keeping them at par with the changing structure and without being at a risk of completely redoing their business models in the future as well. It looks like orders and rules are bound to be placed and firms are trying hard to cope with these. STOs are probable to sustain in the long run as they come to rescue when token issuers are required to keep up with the law changes every now and then. As a forecast, even if companies fail, STOs could transpire to be the new standard for blockchain-based funding. In other news, a disruptive tech company called Lexit is aiming at simplifying the merger and acquisitions market by overturning the way firms and their intellectual property is traded. It plans to attain this by making use of blockchain technology to design a reliable ecosystem that brings together buyers, sellers and experts under the same roof. As of now, buyers, sellers and appraisers are expected to search and find one another themselves. This gets hectic and to a point, even impossible as it narrows down the options based on availability. To evade this, blockchain technologies are coming up with ways to tackle these barriers and Lexit is creating a programme that is likely to untangle and simplify the world of merger and acquisitions. The LEXIT ecosystem will be run on its native utility token (LXT) which will be used to pay experts for doing extraordinary work in this domain, reward platform users for using relevant and helpful tags, and to pay commission to LEXIT upon successful completion of a transaction. This initiative comes as a breath of fresh air after all the on-going discrepancies and confusion in the ICO market! PARTING WORDS OF THE ICO One can only theorize on what the future hold for the ICO but the fact remains that it is on the decline. It cannot be blamed, as it was the very first try at blockchain-based funding and no idea is bulletproof or perfect. The already issued ICOs are facing problems and developers are looking into solving them at the earliest. It is just a matter of months before we see newer, better substitutes of the same so the cryptosphere can come full circle again. It will be tough for newer systems to completely overthrow the ICO throne and they have a lot of catching up to do as the ICO was the first innovative concept of the blockchain. However, it is a known fact that there’s always a need for change and nothing can guarantee the immortal sustenance of a system.
