How to choose a good ICO?

The ICO market is exploding right now, and, sadly, unviable or even false projects are swarming in. How do you invest in a promising start-up and not burn your wallet?

Website assessment

A website is the sum of any project, and ICOs aren’t exceptional. It is worthwhile to start judging the project from there. Most of the time, a website would contain information about the project, contact information and a token sale offer.

White Paper

Learning the project’s white paper is very important. A white paper is a document that tells investors about the structure, the market, and the risks of the project down to technical details. It should describe the missions of the project, its business plan, and also its funding phases accurately and clearly. The project missions should be logical and feasible. If the white paper contains some examples of the code or links to storage, that would be a good sign. The more detailed it is, the better.

It’s a bad sign if the idea is unclear or if the authors spam so many ambiguous terminologies to disguise the lack of sense in the message.

The Team

A good dev team contributes to at least 50% of the project’s success. It is crucial for any site to have information about its team members detailing their background and contact information. I would be persuaded if I know that some of them had already worked on and finished successful project blockchain-wise.

The Roadmap

Additionally, dependable ICO sites contain a roadmap outlining the stages of financing, how the money will be spent, and the timeline of the project. It’s essential to note whether the objectives mentioned in the roadmap are connected to the general missions of the project and whether it’s feasible to finish them in such time frame.

If the team promises to set out doing an unbelievable task in a very short amount time, you should be really mindful.

Tokens assessment

If you are sure that the company is dependable and the project is possible, you can continue to the assessment of the tokens themselves.

The number one question is what value the token will bring after the ICO.

Firstly, try to understand what potential the token offers and how it will be made use of in the project’s ecosystem. For instance, the Eros token holders will be guaranteed to a share in the company’s profit and a discount for using its services; the token will also act as an internal currency used on the platform.

If everything is in order, then you should look into the share distribution between investors and founders. The share of tokens should not be too big or too small. There’s a rule of thumb to keep in mind, the ratio of coins offered should be 70-80% of all coins released, while the remainder stay in the team’s hand.

To tell a worthy ICO, common sense should be taken into account. You always have to understand what you are really getting investing into someone’s coins, and how final product will look.

One Comment

  1. inferior November 14, 2017 Reply

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