An initial currency offer ( ICO ) is a fundraising method that exchanges future cryptography coins for cryptocurrencies that have an immediate liquid value. Generally, a percentage of the tokens is sold to the ICO participants and a percentage is kept for the needs of the company (private investors, etc. The terms differ from one ICO to another). An ICO allows large and small investors to finance the projects they like. The recent year brought thousands of successful ICO stories. The motivation for the project is obvious. The motivation for ICO investors is that the price of the token would be higher (or much higher) than the price of the token during the ICO.
1 – Composition of the team
Discover everything you can about the team, especially the development team and the advisory board. Find each team member for the relevant experience. Google their names. Visit your LinkedIn profiles Find famous names among the project’s advisory board. Find out if the team has any cryptographic experience and, what is more important, in which projects or ICO they were involved and what impact they had.
2 – Bitcointalk.org Theme
A good starting point is the project announcement thread (ANN) in BitcoinTalk.org, since Bitcointalk is the biggest forum for Bitcoin and problems related to encryption. It is strongly recommended that you read the messages carefully. The investor’s concerns will be answered (or may be left unanswered) in this thread. It’s a bad sign when developers avoid answering certain questions or do not collaborate. Send the developers a personal message to see how receptive they are is also a good idea.
Each message in Bitcointalk contains the degree of rank and activity (number of past messages) of the sender. Watch for low-level novices and writers. The reputation has become very important and significant.
Consider the comments of experienced writers and also look for negative messages, sometimes it could be a warning sign. Use Select [All] to see all the comments in the thread and use CTRL + F (Windows) to look for red flag words like ‘scam’, ‘with’, ‘MLM’.
3 – Stage of the VC project and investments
Evaluate the stage of the project. Do you only have a technical document? A beta version? Is there any product released with limited functionality? Prefer projects that have “some lines” of work code, however, many ICO have shown that they can become success stories without any written code.
Venture capitalists tend to invest and support projects from an early stage. Look for this information generally on the home page of the project website. It is likely to be considerable if it is a known crypto VC, such as Blockchain Capital or Fenbushi (belongs to Vitalik Buterin, founder of Ethereum).
4 – Community and Media
It is crucial to have an open support community as a public slack for all investors. Openness is as crucial to gain our trust as the Github code. Try to capture the atmosphere within the community. Look at the size of the community and its activity.
5 – What do you need the token for? Is the blockchain necessary?
ICO means the creation of a new dedicated token for the project. One of the most important questions that each project must answer is: what is the token good for? Why is not Bitcoin or Ethereum enough to serve as a project token? Yes, many projects only invent a deceptive story. Hey, an ICO can not be an ICO without a dedicated token. The same question needs to be asked regarding the use of blockchain technology behind the project.
6 – Unlimited limit / hard cover
In the early days of ICO cryptography, the difference between open and rigid covers did not have the same impact as current ICOs. An open limit allows investors to send unlimited funds to the project’s ICO wallet. The more coins circulate, the less symbolic your chips become for later trade, through lower demand.
As ICOs are generalized within cryptocurrencies, huge amounts are collected. Take a look at Bancor, this project raised $ 150 million in just three hours. This resulted in a percentage gain for investors. Keep this in mind when participating in ICOs without limit.
On the other hand, you do not want to be the only one who invests in the project. Exchange have much less interest in projects that raise very little, which makes it more difficult to sell these tokens after launch.
7 – Distribution of tokens: when and how
Greed can be defined by a high distribution of tokens to team members, say, more than 50% of the tokens are suspect. A good project will link your token distribution to the roadmap. Because each phase or milestone of the project requires a certain amount of funds.
Be aware of the stage of distribution of tokens. Some projects only release their tokens hours after the ICO has finished. Some projects need to develop a beta version before sending the tokens. If we look at the percentage profit of Etherium (one year between ICO and distribution of tokens, around 500% profit), Augur (1+ years, 1500%) and Decent (8 months, 350%), sometimes this break It creates a very positive hype result around the project.
8 – Evaluation of the Whitepaper
Most typical investors do not actually read the technical document, even though it contains all the necessary information about the next project and the ICO.
No dude en leerlo, o al menos en la mayoría. Tenga en cuenta los aspectos fuertes y negativos y agregue algunas de sus propias investigaciones. Al final, el libro blanco es la bandeja de plata para los inversores potenciales. Después de leerlo, debería ser capaz de responder una pregunta simple: ¿qué tipo de valor aporta este proyecto a nuestro mundo? También aprenderá en qué está invirtiendo.
9 – Calidad del código – Conoce a Github
Si tiene un poco de experiencia en programación, debería usarla aquí. La calidad de un desarrollador se puede entender mediante el análisis de algunos de sus códigos. Como no tecnólogo, aún es posible evaluar su calidad observando la consistencia del código. Otro buen indicador es el uso de comentarios adecuados. Evita desarrolladores desordenados. Un fragmento de código refleja la actitud de un desarrollador.
10 – La línea inferior
Las ICO se volverán cada vez más “convencionales” como método para recaudar fondos. Habrá muchos proyectos para elegir, por lo tanto, será aún más difícil evaluar estos proyectos.
Es fundamental investigar y leer la mayor cantidad de información posible y anotar todos los aspectos importantes, positivos y negativos, antes de tomar una decisión de inversión.