How long can the IEO craze last?

Since the last IEO project launched by Binance, not only has the chance of winning decreased significantly, but the opening price of the projects also fell short of expectations. At this point, many are wondering: How long can this craze last?

Since Binance launched the BitTorrent IEO in January, various exchanges have followed suit, introducing their own IEO platforms to seek out projects and attempt to get a piece of the IEO pie.

As the pioneer of IEO, the dominant exchange, Binance continues to launch projects on its LaunchPad IEO at a rate of one per month. Other exchanges are occupying their market share and attracting traffic in the frenzy of IEO by conducting IEOs at a higher frequency.

Among the other two major exchanges in China, OKEx has launched 7 projects in the past 4 months, while Huobi has launched 8 projects in the past 5 months. Some second-tier exchanges are even more aggressive, with Gate.io, which has made a bloody path in this exchange war, launching 21 IEO projects in the past 4 months; and some third-tier exchanges are launching one to two projects per week. The frenzy of IEO in the past half year has to some extent overdrawn the entire market. So, how long can this wave of IEO frenzy last?

Recent IEO projects launched by major exchanges, such as Binance's Erlond and Perlin, and OKEx's Pledgecamp, all conducted ICOs or private placements in 2018.

We assume that it takes half a year to a year for a project to transition from ICO or private placement to IEO. Projects that go straight from ICO or private placement to IEO are highly suspected of being money-grabbing schemes, so they are not considered here. Then, based on how many projects from 2018 in the blockchain sector have not yet been listed, we can assess how long the IEO trend can continue. We crawled the projects that conducted ICOs or private placements in 2018 from Hypernum (which lists relatively high-quality projects) and obtained the following statistical data.

According to Hypernum's data from 2018, a total of 606 projects conducted ICOs or private placements, with 396 of them currently listed on exchanges. Among the remaining 210 projects, some will not issue tokens, such as the crypto analysis company Messari and blockchain game Gods Unchained, which do not have token economics; and some are scam projects or have closed down, such as the token ACG Chain and Emotiq created by the former CTO of AE.

Therefore, conservatively estimating, one-third of the 210 projects are unable to issue tokens. Binance launched the BitTorrent IEO in January, while IEOs on other exchanges only officially started from March or April, so the 396 projects listed on exchanges have mainly been digested in the past 5-6 months.

Therefore, based on calculations, the remaining 210 projects may be consumed by exchanges in 2-3 months. The number of relatively high-quality blockchain projects left in the market is already quite small. In a few months, many exchanges will be in a stage where there are no reliable IEO projects available and will have to maintain their IEO momentum by listing a large number of low-quality projects. When the IEO market is flooded with a large number of low-quality projects, it also indicates that the life of IEO is coming to an end.

Originally published on LongHash

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