What Makes ICO Development Companies and Services Crucial for Blockchain Success and How Can They Transform Your Fundraising Strategy?

The world of blockchain is changing fast, and one of the biggest developments in recent years has been the rise of Initial Coin Offerings (ICOs). ICOs have transformed how startups and blockchain projects raise money, creating new opportunities and challenges for companies and investors. Back in 2014, when Ethereum launched its ICO, it raised $18.3 million worth of Bitcoin (around 31,500 BTC at the time), paving the way for what would become a major force in fundraising. 

Fast forward to 2021, fundraising efforts across Decentralized Finance (DeFi) and NFTs raised significant amounts, with DeFi alone having over $80 billion locked by mid-2021. Newer models like IDOs (Initial DEX Offerings) and IEOs (Initial Exchange Offerings) gained popularity, often eclipsing traditional ICOs due to their improved security and regulatory compliance, according to various industry reports. Clearly, ICOs are here to stay, but as they grow, the role of ICO development companies has become even more crucial.

What Exactly Does an ICO Development Company Do?

If you’re launching an ICO, an ICO development company is your go-to partner. These companies specialize in taking a project from an idea to a full-scale token sale. What do they do? Well, it’s not just about writing code or launching a website. It’s about managing the entire process — from smart contract development (which ensures the secure handling of tokens) to marketing, legal compliance, and even investor relations.

For example, look at CoinFactory, a company that has successfully helped launch more than 45 ICOs. They offer a full suite of ICO development services, including everything from token creation and wallet integration to building out marketing campaigns. And it’s not just startups that rely on these companies — big corporations dipping their toes into blockchain technology often turn to these experts as well.

And it’s no surprise why. Launching an ICO has a lot of moving parts. Nick Szabo, the man who coined the term “smart contracts,” once said, “Trusted third parties are security holes,” pointing out why decentralization and proper development are essential. Without a well-executed smart contract, your ICO could face serious risks, including hacking and theft, as was the case with DAO’s ICO back in 2016, which lost around $50 million due to a flaw in its smart contract.

4/ In 2016, ETH suffered the DAO hack – an existential situation at the time for a top asset, that rekt a major bull market it had been in.

— Dan McArdle (@robustus) May 14, 2022

The Rising Demand for ICO Development Services

Since 2017, when ICOs truly exploded onto the scene, the demand for ICO development services has gone through the roof. In 2018 alone, over $6.3 billion was raised across over 150 ICOs, 59% of 2017 ICO numbers. With numbers like these, it’s easy to see why having a seasoned ICO development team is crucial for success.

$6.3 Billion: 2018 ICO Funding Has Already Outpaced 2017's Total https://t.co/2vhVEMMnr2 pic.twitter.com/LCylWSTpIo

— CoinDesk (@CoinDesk) April 19, 2018

Today, the services offered by ICO development companies are even more robust. Not only do they ensure your token is legally compliant, but they also help create a compelling whitepaper, design the tokenomics (the economic model behind the token), and manage post-ICO community building and governance.

According to a report by Grand View Research, the global blockchain market is expected to reach $1.43 trillion (or $1,431.54 billion) by 2030, growing at a compound annual growth rate (CAGR) of 87.7% from 2023 to 2030. As this space grows, the ICO market is likely to expand further, and more companies will look for specialized ICO development services to hold them by the hands and walk them through this complex landscape.

Why ICO Development Services Are So Critical

Launching an ICO is not as simple as throwing a website online and selling tokens. There are technical, legal, and financial aspects that need to be perfectly aligned. This is where ICO development services play an essentially useful role. They help create smart contracts, design token models, manage compliance issues, and market the project to potential investors.

For example, take the case of EOS, which conducted one of the most successful ICOs, raising over $4 billion in 2018. It wasn’t just their technology that drew investors — it was the marketing and the clear token structure that an ICO development team helped to shape. And EOS is just one of many projects that have benefited from professional development services.

Oh, and this. The team that just raised $4 billion through the EOS ICO promptly had their customer support system hacked, allowing the hackers to send out phishing emails from the company. That is top notch security. https://t.co/yJ9jeXpdJK pic.twitter.com/Ef1dJqnFfi

— Nathaniel Popper (@nathanielpopper) June 1, 2018

It’s not uncommon for poorly planned ICOs to fail. In fact, it’s widely reported that a significant number of ICOs from 2017 did fail by 2020. For instance, a study by Satis Group in 2018 found that about 80% of ICOs were scams, and only a small percentage made it to exchanges1. Another report from 2019 indicated that around 70% of ICOs had failed or were inactive. This statistic hints at the importance of having experts guide the process from start to finish, ensuring not just technical reliability but also a strong market presence and investor trust.

📊 70% of VC-backed startups fail — usually around 20 months after first raising money with an average of $1.3M in total funding raised.

Top reasons for failure:

🤷‍♀️ 1. No market
💰 2. Ran out of $
🤬 3. Wrong team

https://t.co/Q6dWPNt2r2

— @levelsio (@levelsio) June 14, 2018

How to Choose the Right ICO Development Partner

Now, with so many companies offering ICO development services, how do you choose the right one? The first step is to look at their track record. Successful ICO development companies have a proven portfolio of projects and can demonstrate their expertise in the specific industry you’re targeting.

For example, Coinsclone is a well-known blockchain development company specializing in industries such as gaming, healthcare, and fintech. Another key factor is security. ICOs have historically been a hot target for hackers. For instance, in 2018, Verge (XVG) lost $1.75 million due to a vulnerability in their token. The right ICO development company will prioritize security, especially when developing smart contracts.

Play stupid games, win stupid prices. $XVG once again exploited. "Block 2155850 to 2206272 were mined with super-low-diff for the hackers.. About 35 Millions (~$1.7 mill.) in a few hours rather than a few weeks.. all alone for one person or group.." https://t.co/eBd6nagovA pic.twitter.com/gmISnZW6XR

— WhalePanda (@WhalePanda) May 22, 2018

One more thing to keep in mind is the regulatory landscape. In 2018, China and South Korea banned ICOs, while the U.S. Securities and Exchange Commission (SEC) ramped up scrutiny, labeling many ICOs as securities. These shifts mean that your ICO development partner needs to have a firm grasp of global regulations and ensure compliance, no matter where you plan to launch.

Incredible. Steven alleges the DAO hack was an inside job by Ethereum insiders. This leads to the DAO report and the stat of the SEC crackdown against ICOs. The next year Hinman gives his speech and Ethereum is the only ICO that gets a free pass based on decentralization despite,… https://t.co/E5NcO12Dug

— bill morgan (@Belisarius2020) December 19, 2023

On the ICO Development Horizon

What does the future hold for ICOs? One thing is for sure: ICO development services are becoming more sophisticated. As decentralized finance (DeFi) and non-fungible tokens (NFTs) gain traction, expect ICOs to metamorphose in these spaces, too. Reports predict that by 2030, the total tokenized market will be over 10% of global GDP. As such, the demand for ICOs and the companies that help launch them will only increase.

The total tokenized market will be 10% of global GDP by 2030.

On the high end it could be worth as much as $68 trillion. pic.twitter.com/ZrMAO05JmN

— Misha (@mishadavinci) July 30, 2023

Down the line, we might see tokenized assets, decentralized exchanges (DEXs), and cross-chain ICO platforms becoming more common. This is where innovation lies — ICO development companies will need to stay at the forefront of these trends to remain competitive.