The Factors for Successful ICOs

In terms of numbers the boom for Initial Coin Offerings goes from strength to strength. As it looks, in the first quarter of 2018 alone ICOs have raised more than $5bn. This would almost out shadow the $5.6bn that has been raised in approximately a thousand ICOs that were launched in 2017. However, not all ICOs are successful. In fact, a recent EY report found from 93% of ICOs in June 2017 that reached the hard cap the numbers went down to only 23% in November. What are the factors for a successful ICO though? Michele Marchesi is a professor of Software Engineering at the Department of Mathematics and Computer Science of the University of Cagliari. He and his team looked at almost 1,400 ICOs in their study to determine the factors for successful ICOs.


PlanetCompliance: Where does you interest in ICOs come from?

Prof. Michele Marchesi: With my research group at the University of Cagliari, I have been studying economic and technological aspects of cryptocurrencies since 2013. In spite of that, the boom of ICO phenomenon in mid-2017 took us by surprise. Hence the need to perform research on it, and on the success factors of an ICO.


PlanetCompliance: How did you go about it?

Prof. Michele Marchesi: Instead of performing a deep but episodic analysis of selected ICOs, we decided to perform a massive study of the ICOs characteristics and success factors, gathering data of as many as possible existing ICOs from the Web. In a sense, we traded accuracy with pervasiveness. Overall, we collected data on 1387 ICOs, and studied 712 ICOs concluded by the end of 2017.

The main sources of data we used were:

  • data about the ICOs themselves, collected by, one of the most popular sites for describing and evaluating ICOs;
  • financial data about the ICO tokens traded on main cryptocurrency exchanges, collected by website;
  • data about token transactions and holders directly collected from Ethereum blockchain using a blockchain explorer (

We had also to establish a success factor for an ICO. Since only a subset of the ICOs we examined had hard and soft cap explicitly reported, we decided to consider as successful an ICO that raised more than $200.000, and failed those that raised less than $80.000. This criterion is quite arbitrary, but at the beginning of ICO phenomenon, only a few ICOs were able to gather more than $1 million.

Then, we performed a multivariate analysis of the ICO features influencing their success.


PlanetCompliance: What were your findings with regard to the key factors for a successful ICO?

Prof. Michele Marchesi: Perhaps the most interesting finding was that the rating given to an ICO by site, before ICO start, is the statistically most significant success factor. This rating spans from zero to five, and a unit increase of this index decidedly increases the odds of ICO’s success. Moreover, we found that the automatic evaluation performed by “Benchy”, the robot of, outperform the evaluation made by human experts. Overall, it seems that ICO evaluation websites work!

Other findings were that ICOs coming from some countries, namely USA, Slovenia, Israel and China, looks with higher success chances than ICOs coming from all other countries. The category which positively contributes to the ICO’s success is “software”. Other categories which in principle could be interesting are ‘gambling’ and ‘business’, but with a much lower statistical significance.

The analysis also shows that the size of the team does not seem to count for determining success or failure of the ICO project.


PlanetCompliance: What is the role of regulation (i.e. how does regulation and an ICOs compliance with the rules affect the success of an ICO)?

Prof. Michele Marchesi: ICO compliance with the rules of its country of origin was not a factor we considered, because it is an information that cannot be easily gathered automatically. However, I think that the times an ICO was able to ignore compliance, and still be successful, have been gone for a long time. Nowadays, compliance is of utmost importance, being a guarantee for both ICO proposers and ICO participants. If anything, the issue is whose regulation and compliance? Most countries have no ICO regulation, and many countries are tempted to apply regulations issued for different funding mechanisms, like IPOs or equity crowdfunding. The proposers of future ICOs must be very careful about the country where to found the company, and must get the best legal advice.


The full paper is available for download here and for more information on Blockchain and ICOs in general check out our dedicated area.