The Wall Street Journal published a very interesting article which brings to light a silver lining to the current "crypto winter" which is the decimation of scam and fraud within the industry. The analysis was well done and yielded interesting results yet missed the mark to an extent regarding the sourcing and the rating criteria. I can't help but be amused that my analysis here was confirmed by the results.
Don't Order Bleu Cheese If You Don't Want Mold
The Wall Street Journal downloaded details of nearly 3,300 cryptocurrency projects that announced an initial coin offering from three websites: ICOBench.com, Tokendata.io and ICORating.com.
The tokens for the analysis were gather from three sources: ICOBench.com, Tokendata.io and ICORating.com. Anyone who is still thriving in the crypto industry wont hesitate to tell you that these sites are basically scam hubs. Pay to get your token listed, pump and hype, dump and swipe. The problem here is that gathering tokens from shillville is going to lead you down a fud road and alas your results will be skewed.
How About Github Activity?
I can't really quibble with the next few processes but towards the end of the description of the methods used we find the following.
To identify projects with unresponsive websites, the Journal pinged each project’s website and attempted to download a copy of public pages on Nov. 28, 2018. The Journal visited each site not responding to its request to confirm it was unavailable.
Finally, the Journal sent its findings to team members of each project and included comments from those that responded.
I think an improvement to this would have been to both determine if the project had a link to their source code (i.e. Github, etc.) and furthermore determine the last date of activity for the mere handful that had open source code publicly available. The reason for this is two-fold: there have been a significant number of projects that did have a reasonable idea but yet failed to properly manage the operational risk of keeping the capital they raised from depreciating beyond the point of ruin.
End of Chapter 1
Yes, the bubble having been popped will be a positive thing in the long run because it has helped us to shed the parasitic rent-seekers that blockchain was built to usurp. But let's not forget the handful of innovators who fell in tandem.
Here are my suggestions and ideas for further research that is slightly more relevant the current developments in the industry.
Are the returns promised actually delivered and given that basically none disclose the risk what is this return actually become when adjusted for potential risk factors? One might use the wonderfully curated data over at stakingrewards.com and work some analytics on that list.
How about a review of some of the projects that raised funds and have since been building or already released a product?
Aragon, LivePeer, Augur, Bancor, Maker, Decentraland, 0x, SpankChain (yes, really.), Enigma, Dharma, dYdX, Giveth, just to name a few.