As the initial coin offering (ICO) market continues to shrink, new trends are beginning to emerge offering investors new opportunities.
Projects offering utility tokens are becoming less popular, while those offering service or security tokens are growing, according to a new report from rating agency ICORating. However, despite being in decline, utility token offerings alongside hybrid token offerings remain the most successful, the report showed.
“Compared to the second quarter, the number of projects offering service tokens increased by 6.55%. The proportion of projects offering security tokens increased by 1.66%. The number of projects with utility tokens decreased 10.07%, “according to the agency.
Almost half of all ICOs in Q3 offered service tokens (a token used as an internal currency to pay for project services), while a quarter went to public service tokens (tokens of the protocol itself). The numbers continue to halve, with around 12.5% of projects offering hybrid tokens (payment for service bonuses for work performed), around 6.5% selling security tokens (tokens guaranteed by an obligation , such as promises to pay dividends, receipt of company shares, etc.), etc.
However, the fact that half of all ICOs offer a certain type of token does not mean that this is what investors want. Hybrid, reward and utility tokens are raising the most capital this quarter, while cryptocurrencies, security and service tokens raised less than an average amount of $ 250,000. Service tokens were also the most likely to fail, with about half of those projects failing. Only hybrid token projects had more successful projects than failed ones. What this could indicate is that investors are looking for more options offered in the tokens, preferably returns from multiple sources (both services and bonuses, for example), and that project teams are taking a while to realize this.