Status ICO Generates Over $60 Million, Fails to Deliver, Triggers Ethereum Overload

A decentralized messaging app called Status — built on the Ethereum blockchain — raises over $60 million dollars during its initial coin offering campaign. However, as soon as the sale started the network became congested, and the Status team was unable to immediately provide everyone with their promised tokens. 

Also read: Bitstamp Initiates Litecoin Trading Function as the Currency’s Price Surges

Status Logo

The coin generation event imploded as a result of too many transactions being sent to the smart contract address simultaneously. Even more individuals tried to purchase tokens after that, causing the network to become engorged and unusable. This great mass of activity led to many transactions stalling or freezing or failing. A myriad of complaints by would-be token buyers then came flooding in en masse.

Overall, based on the Ethereum block explorer, the current number of Status tokens created sits at 1.68 billion. The number of token holders rests at 20,389 at the time of writing. A reddit post provided details about the ICO, saying total market cap value of the Status token will be $275 million. This makes it more valuable than The DAO at the time of its ICO. It is still unclear who was able to complete transactions during the ICO and which transactions failed entirely.

A article covered the bedlam and chaos rather eloquently:

The sale was planned to last until 4th of July, but the cap of 300,000 eth was quickly reached during a frenzy period which broke down ethereum’s network, creating much congestion, backlog and some shenanigans.

Ethereum’s Network Overload Causes Service Suspensions; Its Transaction Price Also Climbs

This issue turned out to be a huge problem for the Ethereum network as a whole. As a result of the massive amounts of Status ICO transactions and other Ethereum transactions taking place, the system essentially failed. Coinbase even placed Ethereum transactions on hold until its blockchain can function properly again.
Status ICO Generates Over $60 Million, Fails to Deliver, and Helps Trigger Ethereum Network Overload
Other sites and exchanges have been affected by the congestion as well. recently tweeted they are taking down Ether and ERC-20 tokens as a result of the delays. Exchange platform Bitfinex halted transactions, too. They tweeted, “We are suspending all ETH withdrawal until the network backlog subsides and we are able to reliably post transactions to blockchain.” Lastly, tweeted they are tired of fixing ICO related problems, and are moving on to continue building features. Without doubt, more trading centers and services have crawled into red alert mode, ceasing Ether transactions until the system begins functioning again.

Another issue with Ethereum’s congestion is it has increased block sizes, which in turn causes the gas price of transactions to soar. This occurs as a result of all the transactions taking place in rapid fire succession. It can be seen as a new charge for the extra transmissions occurring on the network. This is another downside to the system being jammed up and backlogged.

Ethereum’s Price Begins to Plummet; Ecosystem Greed, and Healing the Network

No telling when Ethereum will be back and healthy online, but the consequences of the mad rush for ICO speculation have been severe. According to Coinmarketcap stats, the price of Ethereum has begun a descent. It is sitting down at 12.04% and still falling, at the time of writing.

Some people believe the Status ICO Generates Over $60 Million, Fails to Deliver, Triggers Ethereum Network Overloadprior Ethereum price surge has been a result of rampant speculation and greed on the market, which were sparked by ICO feeding frenzies. Dogecoin founder Jackson Palmer recently made a video where he expressed concerns regarding the current environment of greed.

He said, “The real reason the [ether] price has been going up something like a hundred dollars per week for the past month is really just greed: greed from developers, greed from investors [and] greed from everybody in this speculative market.”

No one can be certain pure greed contributed to the recent Ethereum bull market…but there was certainly so much cash floating around that all the excitement may come to a grinding halt. That is not surprising, however, when today’s coin generation events or ICO’s are pulling in millions of dollars within minutes. And for the Ethereum status quo to continue forward uninhibited, the network congestion issue would have to be addressed. Until then, the price could enter into a nasty ferocious bearish saddening trend.

Do you think Status will recover? Will Ethereum continue spiraling downward? Share your thoughts below!

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  • Papascrubs

    I think ETH will be just fine and continue its uptrend after the consolidation phase… likely wont go down much more that 250 and then shoot right back up again. Russia is adopting, it is more advanced than BTC and there is talk of POS taking the place of mining which will stop the creation of new coins. All +++ for ETC

    • Khurram Javed

      Think you meant to type ETH (not ETC)

  • Zyo

    Thanks for reporting this subject, by some reading I had the impression that Ethereum was near perfect software… everyone have to deal with their problem and I’m sure Ethereum will get out of that stronger than before.

    • Bjorn E

      It is Just as with the DAO. another fork lies next?

  • Andrew

    Good news on all counts. Ethereum’s next true test of time. 🙂

  • Locodoco

    And people didn’t believe me when I said a week ago that Ether price will go below $300 point again. 😉

    • Rachida

      How did you knew this locodoco?

  • Ausi Olivas

    Well, it looks like stress fractures are occurring more frequent For Ethereum. 1st. A theft which caused ETH to fork prematurely and now an overload of the system creating more issues. What’s next?

    • Dbt123

      There’s probably a good chance of ether being quickly dumped for fiat by some ICO’S, and my goodness, who would give a start up company 100/200 million, without a customer?

      • Dave J


  • Bjorn E

    And the hipsters are running scared! Lol:p

  • Jean-Francois Simard

    Switch to IOTA, problem solved. (the more transactions, the faster it gets)

    • Dave J

      How did this space get so retarded? IOTA? So dumb.

  • Scott

    Ethereum needs to change its consensus model – like Bitcoin it has scalability problems because the way consensus is reached. There are newer upstarts, such as EOS, that are building more stable, sustainable foundations based upon the key lessons learned from early Bitcoin and Ethereum experiences.

  • MarvinMurdock

    Should do ICOs on Bitshares network. It can already handle that load and more.

  • Daniel Stan

    ETH is just fine. It’s just a normal downtrend, every so often. Bitcoin had it as well. And then it sprung up again. Nothing to worry about, but to buy more…

  • Yzord

    It is a piramid scheme. ETH on top, ICO’s under it and then the sheeps which are following blindless. All on one blockchain which can’t handle even tx’s. And they want to add dapps on it? You can count on your fingers this will collapse.

  • Dbt123

    Let me start by thanking the author of this well written article. That said as an investor in ether let me explain the Huge problems I see with this ICO funding model. I have not participated in any ICO’S, and don’t plan on it. I bought ether for the belief that Vitamin and Vlad and others can build something valuable, and they have, however this ICO funding is no doubt going to exert price pressure on my investment as ether is converted to fiat to finance these startups. I understand about falls creation and why they matter, however, what I don’t see here is any substantial vetting of these ICO’s to make sure a ‘pump and dump’ doesn’t occur. Hopefully this and other issues can be remedied by the Ethereum Foundation, for the sake of Ethereum investors.

    • Dave J

      ROFLMAO! That is why bitcoiners call you Ethtards. The show is just beginning for us.