A downward market trend this summer 2021 suggests that we’re experiencing the end of crypto’s second boom. So, let’s recap the market hype over the past year and look into whether we can draw any conclusions following the booms of 2017 and 2020-21.
We conducted a series of interviews with the most active participants in these bull runs and tried to analyze the current state of the market to find out what determined a project’s success both then and now.
Our first guest is Dima Budorin, CEO of Hacken Foundation.
Natalia Gavrilenko (AroundB): What was your strategy, including marketing, for launching successful ICOs in 2021? What helps you raise funds for projects now compared to 2017?
Dima Budorin (Hacken Foundation): I’d like to start by mentioning the community we created and the successful launch of tokens rather than raising funds. Everything depends on a project’s goals, which are set by the founder. If the goal is to raise funds no matter what happens to the token, then this is one story, but if there’s a long-term project being planned for, the approach will be different.
In 2017, projects that aimed for the biggest fundraising were managed by marketing companies that made big promises. Also, in 2017, after fundraising rounds ended, many projects vanished, and their founders ended up disappearing as well.
Our plan is completely different. Our main goal is to craft a story that makes you fall in love with a project, like with HAPI and DisBalancer. We want to build a narrative that catches on, remains memorable, and captivates the community.
Another point to deal with is greed. It was our intention to avoid a flashy entrance, and this gave us an opportunity to defer demand. It worked. Maybe we don’t have much money in our pockets, but we have a stable token that is growing even when the market is down. Our strategy lies in first creating a sustainable brand, telling interesting stories, and building a community.
Natalia: What would you like to see changed about crypto projects and ICOs in the future?
Dima: First, I’d like to get rid of a tool that emerged in 2021—Moonshots. This is a handy tool that shows the starting market cap of a project, what caps its competitors have, and how much a project can rake in if that cap equaled its competitors. Moonshots became an integral part of any IDO. The more you circulated them among influencers and so on, the more hype you created. In fact, this is open manipulation. But it works.
After the first wave of IDOs in 2020, it didn’t matter whether a project was for NFTs, DeFi, or anything else. People read the first project’s docs. Then, with each additional IDO, they read less. Then, after several failures, investors tried to make up for their losses during the sixth and seventh rounds, but no one read anything by that stage.
Natalia: Are you trying to say that it didn’t matter anymore what projects were about nor what problems they solved?
Dima: Yes. People stopped looking into details. They stopped caring after the first successful ICO. Money was made during the first wave, then money was lost during the second, and then there were gains again.
Natalia: Does this mean that the project doesn’t matter, but, instead, market flow is what’s important?
Dima: Yes. What matters is timing and a project founder’s goals—what they aim to achieve in the short and long-term outlook for a project.
Natalia: Do short-lived projects still sprout up in 2021 the way they did in 2017?
Dima: Yes, they do.
Natalia: No lessons have been learned?
Dima: Exactly. In 2017, this process took a year to unfold, and the same thing is happening for 2020-21.
Natalia: What is the key factor for investors this year? What should big investors pay attention to first before investing in a crypto project?
Dima: Funds turned out to be like cancer this time around. They dump their pre-listed tokens and disappear at the first possible convenience. Hype, community, publicity, stories, and PR are the only things that matter to them.
Another important factor for these funds is partnerships with IDO platforms, or launchpads. Launchpads are basically the only platforms offering access to active influencers. This means that it has become important for projects to form partnerships with top-tier IDOs (Polkastarter, DaoMaker, Paid Ignition).
In our case, we aren’t seeking additional funding for our current project, PureFi. There will be a single fundraising round, and we’re not going to send a single token afterward—only six months later. If investors accept these conditions, then we’ll be interested in cooperation. If not, we’ll go our separate ways.
Natalia: Do you have any statistics on new projects that raised funds but failed in terms of security? What role does the security of a new project play in raising funds?
Dima: Fewer mistakes are being made in smart contracts these days, but risks related to internal controls are taking center stage. Project founders can rug pull funds at the click of a button, and there are no tools available to check contracts for such vulnerabilities at the moment. One of our projects, Hyping Scout, has been created to analyze these risks that are related to project management. This isn’t for detecting errors in a smart contract but rather the risks associated with managerial leverage over a project.
Natalia: What are your expectations for the rest of the year? What projects do you have planned?
Dima: We’re focusing on ourselves, and we have a lot of ideas, primarily for new projects. We’re even thinking about a DEX Pancakeswap-style. We have a great team and will continue developing and moving up the rankings on CoinMarketCap.
Natalia: What are your thoughts about the overall market situation?
Dima: Speaking generally about the market, I think we’ll be hovering around $25,000-$35,000 till the year’s end. A slow downward trend is possible, but I doubt there will be a sharp decline or that we’ll fall below $20,000.
Natalia: Speaking generally or just about this year?
Dima: Generally, I think.
Natalia: To wrap up, is there anything else you would like to share with our audience?
Dima: I’d like to mention our ToxicList project, which aims to call out funds that token flip or act otherwise unethically. Anyone can add instances of funds that acted, in their opinion, in a way that has led to the current mistrust between the crypto community and investment funds. I call on our audience to contribute to this list and help raise awareness about funds whose cooperation should be avoided.