How to Evaluate if an ICO is Worth Investing In
The balance where there is failed ICOs on one side and successful on the other, the side of successful ones are a lot heavier and loaded than the other one.
No matter what the naysayers say about the declining acceptance of the fund raising medium in the market because of the million hack incidents that revolve around ICO, the fact remains that ICO continues to enjoy their share of limelight in the world, only now investors have become a lot more careful in their selection.
So, if you are one of those people who have some extra cash in hand and are looking to invest in a project that is poised to bring you in a profitable position in the future, ICOs are something you should not keep away from your list of probable investment avenues.
The intent of this piece is to help you get an understanding of how to evaluate an ICO project to ensure that the investment you are making in the cost of launching an ICO is not a complete waste.
So, without a moment’s delay, let us get straight to it.
1. Look at the Team Backing the ICO
Identifying the names behind the project can be a great starting point of ICO evaluation. As a general rule of thumb you should look for a ICO that has people on board who have complete knowledge about the Blockchain domain. In addition to that, those people should also have a reputation to uphold in the market.
Identifying the brains behind the ICO project can help you foresee the future that the project will come packaged with.
2. Look at the Regulatory Factors
There are several rules and regulations set by the government bodies of different nations in terms of how an ICO should be launched, promoted and also in terms of the fund collection and usage process.
So, ensure that the ICO you are planning to invest in abide by those rules and regulations to the T.
3. Study the End Goal
The success of the project and your finances is directly linked to the goal that the project has been ideated with. From your end, do a comprehensive study of the project. See the real value that it holds, if it does in fact offer solution to a real world issue. Also, if the solution to the problem that the project is out to solve actually needs a Blockchain integration.
Once you have ensured that the project actually solves a real-world issue which indeed needs a decentralized solution, go on ahead with investing in the ICO or take a back step right then.
4. Study the Token Economics
As an investor it is of extreme importance for you to understand the token economics that the project is build upon. See how they are looking to use your coins to solve ABC issue and how they plan on making their cryptocoins grow in the market which is already pretty crowded with the variety of coins.
5. Look at the ICO Website
Looking at the ICO website in addition to the whitepaper can be a great way to judge the worth and genuinity of the project. The more clarity you see there the more sure you can become of the fact that your money will not be wasted.
So, check out the ICO website and look at all the major tell-tale signs that hints at genuinity - presence of contact information, photos of team backing the project along with their social profile ids, detailed information about the project, etc.
So, here were the ways I have identified that can help in evaluating the genuinity of an ICO.
What do you think are some of the other ways to evaluate an ICO? Share with us in the comments below.