Token Sale Market Performance - Smith + Crown
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Token Sale Market Performance

A deep look at the performance of the token sale market. This talk was given at Token Summit 2017.

Note: This talk was given at Token Summit 2017. We will update this with a summary of takeaways from the expert panel as they apply to different graphs. We will note when this is updated.

  • While the amount of money raised this year has increased dramatically, this has been driven largely by sales that raised over $5 million: the number of sales has actually been declining while the total amount raised has increased. A year ago, a $10 million sale would have been an outlier: in the past couple months, it’s not that much above average closer to average.

  • Historically, VC funding has dwarfed token sales as a form of funding, but this year, so far token sales outstrip Seed, and Series A investments in the industry. Token sales have emerged as the funding route of choice for early stage blockchain projects.
  • We compared token sale data to CoinDesk venture capital data, which while not complete, has reasonable coverage.

  • More than half of all funds raised went to the top 10% of projects.
  • These high-raise projects usually dominate news headlines about token sales, but the longer tail of smaller-raise projects is important and is often ignored.
  • Historically, the per-raise average is about $2 million.

  • There are many factors driving this increase, including the broader market, but one of them is the incredible returns these sales have given.
  • Ethereum was one of the early sales and had massive community participation. A dollar invested in that token sale would have been about $350 last week and well over $500 today.
  • These kind of returns over two years outstrip almost any other investment opportunity, and it’s one thing attracting notice
  • It’s already created a global community of enthusiast investors who have 500x funds to support new projects

  • Ethereum has played another role: launching new tokens. Ethereum meta-tokens have emerged as the meta-token of choice for token sales, and it’s become a platform for raising funds directly through a smart contract. This lowers the engineering burden on projects and lets them benefit from Ethereum’s security without setting up their own consensus infrastructure.
  • At the same time, it’s worth noting people are still launching new blockchains. The race for the dominant blockchain platforms isn’t over yet, and plenty of projects are angling to establish a new platform.

  • We did a thought experiment to see how these projects are doing: we imagined, if you invested one dollar in each sale at the average sale price, what would it be worth today?
  • As of May 17th, about 45% of projects haven’t launched tokens, will never launch tokens, or have launched tokens that trade below their USD price. Those would be losses.
  • Most people don’t consider USD a benchmark, however, because if they don’t invest a dollar in a token sale, it probably means they kept it in cryptomarkets. For a benchmark, we estimated how much that dollar would be worth it had been invested in Ethereum at that date instead.
  • Less than 50% of those sales have beaten a commensurate Bitcoin investment and around 20% of the sales launched after Ethereum was trading have beaten Ether.

  • Here are the returns of all of those projects that are worth more than their initial investment. Note the scale on the left is log10, so it smooths out what would otherwise be a very sharp drop-off.
  • The Ethereum token sale so far has been the third-most valuable token sale. It has also had one of the longest times to mature–and until a couple months ago, would “only” have been about 10x their investment. The other projects have plenty of time to mature as well.

  • We looked at how many issued tokens that made it to a secondary market. The liquidity of the tokens is one of their strengths: people aren’t locked into their investment in an early-stage project. So we looked at how many haven’t created markets to give people this option: less than 50% for all projects and less than 30% for projects that raised over six months ago. This has a higher rate than venture-funded early stage companies: 40% of projects that get seed stage funding never make it to another funding round or get acquired: initial investors lost everything. Already, token sales are giving sale participants more options.
  • Over 40% for all projects and almost 40% for projects over six months old are still active, with a secondary market and meaningful project updates. For venture-funded companies that get seed stage funding, only 30% go anywhere–that is, they get to an IPO or get acquired, with some potential returns for initial investors. Token sale-supported projects already seem to offer more flexibility.
  • It’s too early to draw conclusions on that: most of these projects are less than a year into their funding and still have plenty of time to fail. On the other hand, the market is still pockmarked with long-shot projects that manage to raise seed stage funds but wouldn’t make a successful venture capital round. As the community of token sale supporters matures, we’d expect those to become more rare.
  • But we will leave you with this: these token sale invested projects currently make up about 30% of the combined marketcapitalization of all funded tokens, and only 20% is attributable to Ethereum. They’re a big part of the ecosystem.


Smith + Crown does not include sales that ended in refunds, such as The DAO, or sales that fail to raise $25,000, about the average amount raised on kickstarter.

To calculate the “average ICO” price, we divided the total amount raised in USD (valued on the final day of the sale) by the number of tokens distributed to token sale participants. This doesn’t account for bonuses, which in most cases only some token sale participants received.

To establish a BTC and ETH benchmark, we indexed the current ETH price to the price on the day the sale launched.

To determine whether a project was active, it had to meet three criteria:

  1. It had an average daily trade volume of $15,000 or more, the median across all markets, according to We sampled over the course of a week to account for sudden fluctuations.
  2. It had a working website.
  3. It had given a meaningful project update on the project blog, reddit, or bitcointalk. We did not count Twitter posts as meaningful updates.