ICO Escrow: What It Is and Why Your ICO Needs It
After a banner year for the capital raised, and massive excitement surrounding the ICO market in 2017, things have been progressively softening in 2018. Despite the total funds raised so far in 2018 already exceed those raised last year by over 30%, the amounts have been dribbling down continuously.
Partially, this downward trend is driven by poor reputation of the crowdfunders. With every successful ICO, you hear stories about missed deadlines, lack of updates or worse — sometimes project leaders just disappear with the capital raised in the offering. This can lead to investor losses and jail time if the founders are caught.
In fact, a recent study by ICO advisory firm Statis showed that almost 80% of ICOs were identified as scams prior to trading. Of the remaining ones, only 15% continued on to keep trading, where only 7% found successful funding.
That’s why, with increasing fraud and deceptive practices among the hundreds of available ICOs, it’s more important than ever to make escrow services a part of your ICO offering to ensure investment. A properly executed escrow system can help avoid the problems while at the same time making your ICO look more attractive than others which lack such safeguards.
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