BitMEX Research: ICO Tokens Allocated by Teams to Themselves Depreciates By 54%
The latest research by cryptocurrency exchange BitMEX reveals that the value of tokens that the teams allocate themselves has decreased by 54%. Conducted over a hundred projects on the Ethereum (ETH) network, the ICO market research has been in collaboration with analytics firm TokenAnalyst.
The report published by BitMEX on Jan. 16. referred the treasury balances of over a hundred of initial coin offering (ICO) and inferred that the tokens that the ICO teams allocate themselves sees a massive a depreciation. The analysis employed machine learning techniques and was based on the interpretation of the smart contract data and transaction patterns on the Ethereum blockchain.
The report states that the combined value of all the tokens that the analyzed projects have allocated to their own teams has slid from $24.2 billion at the time of each token’s issuance to about $5 billion as of today. Furthermore, BitMEX cites 2018 crypto winters and the $1.5 billion worth of transfers to external addresses as the major contributors to the slump.
“Based on current illiquid spot prices, the ICO teams still appear to own around US$5 billion of their own tokens, money they essentially got from nothing, depending on ones view. At the same time the teams may have realized gains of US$1.5 billion by selling tokens, based on coins leaving team address clusters.”
The report also inferred that the historical combined peak value, calculating by using each coin’s individual price peak was more than $80 billion.
The BitMEX and TokenAnalysits drew out a conclusion that the ICO market lacks standards and transparency, especially when it comes to allocating tokens to the founding teams. Furthermore, BitMEX noted that the analysis can further complicate, when the ability of ICO teams to mint, burn, buy, and sell their own tokens is considered.
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