Bitcoin
BTC$48 040.82

-1.15%

Ethereum
ETH$3 406.76

-3.36%

Cardano
ADA$2.37

-1.97%

Binance Coin
BNB$409.51

-2.13%

Tether
USDT$0.998941

-0.15%

XRP
XRP$1.074680

-1.02%

Crypto Projects Are Getting Rid of Their ICO-Gained ETH Coins


05 Aug 2019   #Ethereum

 

According to a recent analysis, it seems that ICO projects that accepted ETH coins during their token sales are slowly but surely emptying their wallets of Ethereum. The last 12 months alone have seen over 1.8 million ETH removed from the projects' treasuries.

Ethereum's role in ICOs


Ethereum has been one of the most important cryptocurrency projects ever since it emerged. Not only did it shift the attention from cryptocurrencies towards the abilities and potential of blockchain — but it also kickstarted the rapid development of dApps, and also new coins and tokens.

In the last several years, the majority of Initial Coin Offerings (ICOs) have seen their coins launched on Ethereum's platform. These tokens are built on the ERC-20 token model. The reason for this is that it is easier to create a token on an existing platform that is relatively easy to use, and then finance the development of the MainNet, than to start with the MainNet and then launch the coins on top of it.

During their token sales, these projects would accept different cryptocurrencies (including Ethereum (ETH)) in exchange for their tokens. These funds would then be used for projects' costs.

Projects that launched their coins on Ethereum's platform would then easily go through a token migration, burn the ETH-based tokens, and launch their own in their own ecosystem.

However, according to recent research, it would appear that the Ethereum holdings of many of these projects have been on a sharp decline. Researchers have analyzed up to 57 Initial Coin Offerings, as well as projects that grew from them. It would appear that, on average, each of the projects has moved or liquidated around 2,500 ETH coins per month during the last 12 months. This is equivalent to around $530,000 per project per month.

Crypto projects moving and liquidating large quantities of ETH


According to the research, the projects raised approximately 8.2 million ETH coins in total. At this point, around 72% has been either liquidated or moved since the projects' ICOs to this day. The more precise figure is at around 5.9 million Ethereum coins.

According to the report, the two largest movers were the blockchain platform Tezos, as well as the decentralized CPU power developer, Golem Network. Golem is the largest mover by far, with around 138,000 ETH transferred so far. The coins were sent to the Golem Foundation.

As for Tezos, it moved 60,700 ETH according to the report, although it only distributed them across four separate wallets. Researchers believe that the funds are still sitting in these wallets, waiting to be used or liquidated.

There are multiple reasons why projects might want to dip into their Ethereum treasury after their ICOs. Many were in a hurry to hold an ICO back in 2017 when the prices were soaring, so they had a lot of development costs to cover after the token sale. The same is likely true now, as the prices have seen another rapid surge in the first half of 2019. Others had to draw from their ETH balances to pay for operating expenses.

Even so, it is likely that these projects still have some reserves that could keep them afloat. However, they still choose to pay for their costs in ETH, which makes these findings very interesting.

Author: Ali Raza for Crypto-Rating.com

Related

Ethereum options data suggests the battle for $4K ETH is at least a week away
Ethereum price metrics back traders confidence in $3,800 ETH
Ethereum layer-twos reportedly processing more transactions than Bitcoin
Top up with stablecoins at FreshForex
Ethereum's rise to No.1 crypto seems unstoppable
Cryptocurrency derivatives market shows growth despite regulatory FUD
Eth2 staking contract ranks as single-largest Ether hodler with $21.5B
Reasons why Ethereum is unlikely to flip Bitcoin any time soon
Ethereum approaches $3K resistance as Bitcoin price rebounds toward $40K

Top Cryptocurrencies with Price Predictions

# Crypto Prediction Accuracy CVIX Price 24h 7d Market Cap Volume 24h
1 Bitcoin (BTC) BTC Bitcoin predictions 88.4% 18 $48 040.82 -1.15% 4.49% $904 138 209 931 $27 168 138 382
2 Ethereum (ETH) ETH Ethereum predictions 76.4% 50 $3 406.76 -3.36% -0.59% $400 587 974 492 $14 083 515 721
3 Cardano (ADA) ADA Cardano predictions 68% 67 $2.37 -1.97% -9.16% $75 770 110 129 $1 761 903 242
4 Binance Coin (BNB) BNB Binance Coin predictions 64% 71 $409.51 -2.13% -1.24% $68 853 321 231 $1 118 665 295
5 Tether (USDT) USDT Tether predictions 92% 1 $0.998941 -0.15% -0.13% $68 220 155 150 $55 238 355 832
6 XRP (XRP) XRP XRP predictions 69.6% 61 $1.074680 -1.02% -2.67% $50 104 002 644 $2 001 954 604
7 Solana (SOL) SOL Solana predictions 60% 90 $159.62 -0.39% -11.29% $47 403 146 839 $4 342 326 777
8 Polkadot (DOT) DOT Polkadot predictions 64% 81 $33.87 -3.28% 5.40% $33 450 932 962 $1 531 270 854
9 Dogecoin (DOGE) DOGE Dogecoin predictions 63.2% 75 $0.238990 -2.72% -2.75% $31 391 728 418 $814 388 693
10 USD Coin (USDC) USDC USD Coin predictions 90.8% 1 $0.998865 -0.13% -0.15% $29 376 466 972 $1 886 680 146
11 Avalanche (AVAX) AVAX Avalanche predictions 68.4% 69 $72.57 1.86% 14.34% $15 986 861 751 $1 646 527 720
12 UniSwap (UNI) UNI UniSwap predictions 69.6% 64 $24.41 -2.34% 2.68% $14 931 117 171 $258 525 925
13 Terra (LUNA) LUNA Terra predictions 69.6% 64 $35.81 0.61% -13.26% $14 384 328 816 $821 923 843
14 Chainlink (LINK) LINK Chainlink predictions 74.4% 51 $28.31 -3.15% 0.91% $12 837 320 531 $907 387 794
15 Binance USD (BUSD) BUSD Binance USD predictions 95.2% 1 $0.998729 -0.16% -0.14% $12 797 266 194 $4 423 728 987

Be the first to receive Cryptocurrency Price Predictions and Forecasts daily

Get cryptocurrency price predictions, forecasts with analysis and news right to your inbox.

© 2015-2021 Crypto-Rating.com

The usage of this website constitutes acceptance of the following legal information. Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website, including information about the cryptocurrencies and bitcoin is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Crypto Rating shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about cryptocurrencies. The entire responsibility for the contents rests with the authors. Reprint of the materials is available only with the permission of the editorial staff.