Having spent almost 18 months now trawling through ICO whitepapers to find the next hidden gem in the crypto market, the team here at Picolo Research and Astronaut Capital have noticed an interesting trend that has emerged.

In our past life of analyzing small-cap IPO’s, one of the first things we would look at with any prospective investment is the amount of stock/tokens that are issued to the public as a percentage of the total supply.

Keeping in mind how much the ICO market has evolved in the last 12 months, we decided to do some quick research to see how this figure has changed.

On average, ICO’s are now keeping 22% more tokens than the same time last year.

Changes in token ownership over 12 months.

In fact, the data shows that there has been a complete reversal in the amount of tokens that are issued to the crowd in the space of 12 months.

The data

We took a random sample of ICO’s that held a crowd sale between May- July 2017 and the same time for 2018.

Looking at the raw data, it is apparent that token sales in 2018 are slicing off a larger piece of the pie, leaving prospective investors with significantly less of the overall total supply of tokens available for trade.

Is this a bad thing?

Not exactly. There are legitimate reasons for an ICO to hold a larger portion of tokens in their back pocket.

Some of these include:

incentivising the ecosystem for participation through their own tokens (marketing, partnership, etc)

availability of tokens for pre-mining and to boost the attractiveness for miners to switch focus to a new protocol

incentives to onboard developers to build out DAAPS and innovate through their token

However, there are also some ‘not so great’ reasons for ICO teams to increase their slice of the pie:

they want a bigger reserve incase things turn sour (a warchest/rainy day fund)

they want to do a large ‘untargeted’ airdrop to try to increase demand and trading volume

they want to give a large portion to an exchange (Binance) for the listing of their token

How does it affect investors?

One of the most significant aspects for prospective investors to consider with this new trend is the effect it has on the market capitalization of the token.