Surely, people are interested in crypto-currencies in general, I think you often paid attention to such an uncomplicated abbreviation as the ICO.
What is ICO? As the scientific story tells us, this is the initial placement of coins to attract ITR investments into a certain project. Nowadays, the money-raising for their start-ups is called with this shortening, ICO (Initial Coin Offering), but the sweetest of these three letters is of course the ability to double, triple or even increase your investments. With a 10x factor, 100x and 1000x.
The assumption that each investor can “enrich” himself simply by buying a chip mine at the primary sale, which makes the ICO one of the main tendencies of 2017 and 2018 is not always successful. A large number of people, with their eyes closed, invest in projects that offer only illusions, and they consider that they will give them a bright future; only in 2017, because of the primary sale were attracted funds of over 2.8 billion, a huge number of ICO existing are of bad (SCAM).
The ICO Market (originally Coin offering) in 2017 was in full expansion that can only be comparable to the “dotcom” era. According to statistics, only in July of the year 2017, with the help of the ICO’s developed to finance different start-ups, the investments were drawn higher than in the last 12 months taken together before July 2017.
Note: Dotcom – is a term applied to companies whose business model is based solely on work on the Internet. Beginning in the late 1990’s. At the time of a boom in the internet business.
Naturally, as in the dotcom market age, the ICO’s flooded the market, it is certainly possible to say they are high quality projects, but with a bad opinion… there are a lot of “trap” projects for investors less informed in this area, these being very convincing, but are often just elaborate scams; simply for a single purpose, to collect funds from gullible investors. After the wave of mass hype around the dot-com bubble, they remained only a few truly successful projects, including true leaders appointed, such as, Facebook and Amazon.
It is logical to assume that the ICO market expects a similar fate, and in the long term they will survive and successfully develop some of the projects that now come to the ICO or from those that were earlier.
It can be said that even the most “reliable” project can give a crack, or its creators simply decide to throw all investors and flee with the money. After all, it’s hard to find the thieves or to take responsibility for it. This picture looks pretty sad. Therefore, if we are interested in leaders and projects with prospects that are aiming for long-term success, then we will have to look closer to the deployed ICO and identify the signs of a successful project.
So, shall we study together what are the signs of a successful ICO?
In my opinion based on the information from various sources available at the moment in the network, I have listed several of these signs, which I am also guided by and which the prospect of the project launched at the ICO, can be estimated.
1. If the creators of ICO do not obey KYC – maybe because of this, will not occur if they have problems later with the fee. What is KYC? It means – Know Your Client. This is the term of banking and exchange regulation for financial institutions. Currently, to avoid the risk of losing money, such a identity verification is simply compulsory in a decent ICO.
Another thing that raises the question immediately, how to pass KYC? And not all will pass.
Not only do you need a passport photo and proof of your ability to pay, you simply may be refused to purchase tokens for many reasons.
2. The project should solve real problems facing millions of users. It should be clear in the expanding market and the segment in which it will be introduced, to be quite competitive by demonstrating and attracting powerful advantages in front of competitors. For example, a convenient crypto-active storage wallet or icloud for storage information, etc., that’s something real. And not made-up technologies to link to the Blockchain just monetizing a wave of your own interest in new technology.
3. White Paper – Make sure you read the white paper, do not believe in delusions, read the main document of the project, in this document you must understand the essence of the project, from the general idea to the technical details. When a clear business plan is presented, with real objectives, objectives for the target audience, the main markets for which the product is targeted and the financing stages. A bad sign is the abundance of the words “praise / praising themselves”, the vague formulation and misuse of terminology, which covers the absence of meaning.
4. The participation of a venture capital is a good sign. Venture capital investment in the ICO project at stage “Presale ” is an important signal for the market that this project has been evaluated in an expert manner. In this case, the fees during the “beginning stage” should be at least $1 million.
5. The team is at the core of being successful. The potential ICO team should include experts in the field, preferably with a successful history of commercial or technical projects. If you don’t know anything about the project team, try to find out more details about these people. Luckily, we all know how to use Google, it won’t be difficult. If you have any doubt about someone or the ICO site does not have detailed information about the team, go to the next ICO.
6. The presence of an active prototype or a MVP (Minimum Viable Product). Can be an application, a demo version on the project website or a prototype posted on Github and other authoritarian resources and which these times happen to be criticised by the cryptographic community.
7. Clear economics of the issued symbol. The purpose of the token should be so simple and understandable that you can explain some suggestions even to your grandmother. If this is a symbol for internal use (utility token), then we must look at what can be spent inside the ecosystem and what value this source can have. If the token is used as a value title, then it is necessary to analyze the cash flows and how the income will be paid to its holders.
8. Consultants (Adviser) a very important and very useful form of support for the project. Among the consultants there should be industry leaders, they can give the right advice on the implementation of the project. Or at least it’s a sign that they believe in him.
9. News about the project. Estimate and study project accounts on social networks (Facebook, Twitter, Telegram, Slack, YouTube, Bitcointalk, Github, Reddit), number of subscribers, activity, comments. Draw attention to “What people say“. Successful projects are the ones to which the proposed ideas are supported by many followers who spread the information sometimes without receiving rewards for it. At the same time, remember that the number of subscribers can be easily screwed, and positive feedback is bought from rewards companies.
10. Road Map. The project should have a clear plan, on implementation stages after the ICO – Road Map with the designated value of costs and execution deadlines. A bad sign may be when in spending structure, more than 30% are set for marketing, reference and rewards companies.
11. The project has announced a limit of fund-raising, which reflects the investment described in the White Paper. In this case, depending on the actual realities on the market, the most attractive projects can be in the range of 25 million to 70 million, because with such a hard head there is potential for capitalization, because the current average capitalisation of successful projects is in the range of $150-250 million.
12. Escrow – is a person disinterested, third-party, is a well-known and respected person who is a custodian of funds and ensure of transparent conduct in ICO. If the project has an escrow, then all funds fall exactly to it, and not to the project itself, it is like an insurance bank. Upon completion of the ICO, the project begins to implement the actions that have been declared in the roadmap. At each stage of the roadmap, a certain amount previously established is necessary to complete this stage, and according to this fixed plan, Escrow releases funds for the project.
13. What is important after the ICO? Upon completion of the ICO, an important criterion is the number of chip holders. This indicator can always be checked, simply enter the name of the chip in the search box on the site https://etherscan.io. There must be at least 1000 addresses, and the most successful projects have more than 10,000 addresses. The number of transactions is also important: Successful projects now have about 30,000 transactions per month.
In conclusion, I want to draw your attention to the fact that the presence of these points will not be able to guarantee the 100% success of the project, but respecting these points will significantly increase its chances, while the absence of the majority of the points listed, almost certainly guarantees its commercial failure.
Be careful, take the time to study the project – you will save your money and your nerves.