Netscouters, The Discerning Eye For The Best Ico
An ICO is an Initial Coin Offering and it has been taking the crypto world by storm. It is kindred to an IPO, but exclusive to the cryptoverse. Many start-ups are usingICOs as an expedient to raise funds to bring their projects to life. This could be anything from hiring incipient team members to having a more astronomically immense budget for research and development. When deciding whether to invest in an ICO there are many factors to take into consideration. Throughout this article, I will be delving deeper into those factors. I will additionally be publishing an article in the next week, exploring why influencers rate projects differently, what they gain from it and when you can additionally gain.
How to rate an ICO
These are the main components you should look into when deciding whether or not to part with your hard earned
“Behind every great man is a great woman..” — a saying we have been acclimated to aurally perceiving over the years, and is plenary of truth!
With any conception or project, the analogy is precisely the same; it is astronomically unlikely that you will have a prosperous project/ICO if the team behind it is not great.
Deciding if a team is great or not, is quite a subjective view, but here are a few pointers to avail make it more objective:
– Does the team member have any authentic precedent experience that pertains to the project? I.e. if it is an ICO who’s USP is data analytics on the Blockchain, does the CTO (Chief Technical Officer) or COO (Chief Operating Officer) have experience working for a well-kenned company as a data analyst, or if they are building their own Blockchain, do they have enough developers?
– Does the team have a good balance?
I have visually perceived some teams who have a plethora of experience within the corporate world and have worked for companies like IBM; Mercedes; KPMG; but they are launching their own protocol and only have one developer. The likelihood that they will be able to launch their product is highly unlikely.
The other side of the coin is that you could have a very adolescent team, fresh out of university with lots of conceptions but just not industry yare. Do you indite off this ICO? Of course not!
The exuberance of youth is raw and feral, and with the right set of advisors (guidance) they may just be the next Ethereum!
Great teams incline to get behind great conceptions, so if you have researched the team and they are solid, rest assured, the conception will be solid as well.
In the majority of cases, we optically canvass the conception afore we optically canvass the team. Whilst most established ICOs have a marketing team that can sell frozen dihydrogen monoxide to an eskimo, you have to be able to wade your way through the fancy terminology (BS!) and get and understanding of what the project is authentically doing. If it is doing one of the following then you could be onto something:
• Does is solve a genuine quandary?
• Does it need the Blockchain?
• Will it actuallydisrupt a centralized ascendancy?
• Is it innovative?
• What is the potential of the conception?
• Are there ICOs like this within the space already?
• If yes to the above, then: how is it different to those ICOs? Does it have amended features? Or is it just a replica & paste conception?
The more the number of yes answers you have, the more likely the project will prosper (in the short term at the very least).
The number of ICOs being relinquished weekly is crazy, and there certainly isn’t enough time for you to go through each one (unless you have a prodigiously and sizably voluminous team working with you). Consequently, another way that can avail identify an ICO with good potential is if it has a minimum viable product, an MVP.
To those unfamiliar with the term, an MVP is a product with enough features to slake the initial investors, and provide feedback for future development.
With this in mind, it is much more likely that a team with an MVP can reach the milestones on their roadmap more expeditious and thus launch a plenarily functioning product sooner. This in turn designates the native token to that platform will be in utilization and the price will go up predicated on genuine demand, not hype or manipulation by whales.
It is not all the time that only projects with MVPs turn out to be remuneratively lucrative. Those with a solid community or established partners can additionally have the same desired effect.
- Token Metrics
Whilst each of these factors has an equal paramountcy, they are in order for a reason (there is a method to my madness); we commenced with the most subjective section and worked our way to the most objective section.
Being a mathematician by trade, this is the section that I personally most relish researching and optically discerning if a project is worth investing in pristinely through the numbers.
As with any project within this space, decentralization must additionally occur by having many different investors and adherents holding the majority of the tokens.
As time has progressed in this space, token metrics to the standard investor have gotten a little fascinating to verbally express the least!
With earlier projects there were only 3 main rounds: Seed round, private sale/pre-ICO and then ICO, where the bonus percentage was consistent for each round. Infelicitously this is no longer the case, with many ICOs opting to go for more intricate fundraising structures to maximize funds raised and minimize bonuses given out.
There are now at least 4 different stages, and within each stage, there are bonuses depending on the amount to be invested.
This makes it prodigiously arduous to work out the bonus for each round of fund raising and increases the likelihood of a ‘Pump and Dump’ from early contributors as anon as the token is relinquished to an exchange.
In general, when analyzing the token metrics these are the things to look out for:
What is the price of the token?
What percentages of tokens are being sold?
What is the hard cap, and is this in line with homogeneous projects?
What kind of bonuses was given in the earlier rounds?
Are bonus tokens from earlier rounds locked up? (to eschew a pump and dump).
How many tokens are there for the team?
How long are the team’s tokens locked up for?
If the hard cap isn’t met, will they still split the raised capital in the same ratio?
Will the token have an actualuse within the platform/project?
Does the split of raised funds make sense, e.g. If the project is at alpha/beta testing and they claim that 30% is going to R&D then it is most likely that they have an MVP at best and will require that substantial amount of funds to further develop their MVP to alpha/beta stage.
If I can answer these questions and the numbers integrate up, then there is a good chance that I will part with my hard earned money to invest. (Given sections 1–3 are withal solid).
A sizably voluminous community doesn’t always mean an awe-inspiring investment, there are projects with over 30k members in their Telegram channel, most of whom have auricularly discerned a project mentioned by an influencer and flocked to visually perceive how they can make millions without doing their due diligence.
Having verbally expressed that, if a community has organically grown and hasn’t need cumbersomely hefty marketing; advertising or shilling from an influencer, than a sizably voluminous number is a good number.
Not all prosperous projects have an astronomically immense community at ICO stage. There have been a few ICOs in stealth mode, who have relied heavily on early contributors and genuine believers in the project, in lieu of those probing for an expeditious flip.
With over 5 Billion USD raised in 2018 through ICOs, many people are visually perceiving this as a ‘get affluent quick’ scheme and are launching ICOs very akin to established projects whose tokens have gone up at least 100 times in value.
If a project is a facsimile paste or prodigiously kindred with no distinct differences to a different/more established project, be punctilious!
If a project doesn’t have any solemn competition, pay more attention and do your due diligence.
- Type of Project
There are many types of projects ranging from those who want to build a Dapp on top of a Blockchain, to those wanting to build Blockchains themselves.
Cerebrate of it like this: would you rather invest in the app store itself, or one of the apps within that store? Of course the app store!
That is why it is a more perspicacious investment to optically canvass projects that are building an infrastructure (Blockchain, Protocol, DAO) as opposed to an app.
Withal, some established Blockchains have some issues like scaling, security, etc. These would additionally be keenly intellective investments as they are solving a ‘now’ quandary.
Projects who have genuinepartnerships with established companies/cryptocurrencies are more liable to become prosperous as many of the communities will adopt this project and invest in it, as they believe in the companies that have opted to partner with a categorical ICO. This could be because of hype (optically discern below) or a concrete partnership causing a breakout in the price and utilization of that concrete token.
Every now and again comes along a project, which takes the cryptoverse by storm. Main reasons are down to wide spread exposure of the project by different influencers; the project solves a genuine quandary and people believe that it will take them “to the moon”.
It is true that hyped projects do authentically well once the tokens hit the exchange and give many of the early investorsa good return, the same cannot always be verbalized for those who invested during the crowd sale, or bought as anon the token was relinquished onto an exchange.
Ergo, Hype is always good if you got in early, as with the bonus you will most likely make a handsome return. In integration to this, many of the influencers are like shepherds; moving the masses to believe that a categorical project will shake up the space and they would be crazy not to miss out, causing the token to be over valued as anon as it’s relinquished on the exchange as their adherents have incremented levels of FOMO (trepidation of missing out).
I hope this article has given you a better understanding of just how much time and effort is needed to analyze the true potential of an ICO, and that when you are investing your hard earned mazuma, you require to be more punctilious and not go in gung ho because the people/influencers you follow on YouTube and around gregarious media have verbalized it’s an astonishing project or given it a very high rating.
The solution is to come up with your own rating structure; it could be a percentage, a total out of 10, or just a list of pros and cons of each project. DYOR (do your own research) and invest at your own peril!
Mazuma is there to made, but just for those who work strenuously and do the correct due diligence (or sometimes just damn fortuitous!).
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