It is very difficult to talk about the blockchain industry without mentioning Initial Coin Offering (ICO). It is true that blockchain projects need funding. And one possible way by which blockchain developers and investors can fund their blockchain project is through Initial Coin Offering (ICO).
An Initial Coin Offering, which is commonly referred to as ICO, is the sale of cryptocurrencies by startups in order to raise funding for their business. The use of ICO has been so popular in the blockchain industry because of how huge, and money-intensive blockchain project can be. Most blockchain startups found ICO as a legitimate way not only to raise their funds but to earn trust from investors.
This article is not just going to be about ICO procedures but its a guide to help cryptocurrency investors evaluate any launched ICO before investing. Over the years, people have become skeptic on any launched ICO because of the incidence of failed projects and visions. But for now let’s analyse six tips for evaluating any Initial Coin Offerings for a better investment.
1. Know who they are
What first attracts you to any ICO project? Is it their promises or their long list of features? Many times, people have been misled by the juicy benefits that are attached by any ICO projects, only to realize at the tail-end that it’s just another failed promises. But one way to evaluate any ICO is by doing deep research to know the team of expert involved in the project.
Evaluating an ICO may not be too easy especially when the team involved are not popular figures in the crypto world. But, with a careful follow-up on their historical path, contribution in the blockchain world, and level of experience it might give a positive signal on their coin offering.
You can go as far as checking their profiles in every social media link and check for their contribution in the blockchain industry. This might be so important in other to know where they are coming from. For this not only guides you before investing in their ICO sales but places you in an upper hand to understand the entire project.
2. Ask Questions on bigger forums
Investing in cryptocurrency is a serious business especially when giving early start-ups a trial. The blockchain industry is like a community, and everybody identifies itself with one forum or the other to keep abreast with the latest happenings. To verify and evaluate any ICO, you should check out BitcoinTalk Thread. BitcoinTalk thread is one of the biggest forums to address your much-awaited questions in regards to any ICO issues.
Day-in-day-out people constantly drop questions on any blockchain topics, and relevant updates and threads are hinted by blockchain experts. You can even post your questions on relevant threads and answers are supplied from within the BitcoinTalk Thread.
3. Do a comprehensive digest on their technical papers
Technical papers are most times called white papers. It is a comprehensive document that is developed by the company’s team. This document contains features, missions, and ideas, technical details on how its blockchain works and sometimes the brains behind its success.
A careful understanding of any project’s technical paper will give a perfect understanding of its drive and purpose. When reading through any whitepaper, you should take note of how it plans to strengthen the blockchain industry, its long term visions, and most especially its attention to security concerns. Technical details might be difficult for lots of people to understand especially with the lots of technical terms. But in cases when such a problem arises, you can either use reviews by websites or seek a reliable help from cryptocurrency investors.
4. Analyze its roadmap and milestones already reached
Roadmap is now found in most cryptocurrency platforms especially when such a project is bid for the long term. It gives a projection of the cryptocurrency future achievements and where they are currently in terms of development. Before investing in any ICO, paying attention to its already reached milestone and achievements will give you a perfect picture if it’s worth investing or generally accepted by the coin community.
Milestones are set by project owners in other to check the progress of its coin project from start to finish. But in cases when different milestones are not met by project owners, investing and participating in their ICO might be too risky to invest. Any coin project that is meant for business should be ready to hit its milestone and show responsibility.
5. Check for its purpose and drive
The crypto sphere community is full of fall-out and break-ups from many projects. And one major reason why such exist is due to shared differences between team members of a particular coin project. A coin project that is launched by any team must have a defined purpose and drive to the blockchain industry rather than enriching their pockets. Embarking on a coin project is not centered on controlling millions of digital asset but to give value to the community.
So, as an investor intending to participate in any ICO, some questions that must be asked by any intending ICO participant should be: What is the token for? Are the already existing token not enough for investors? What extra features make it unique? Do their mission and vision show a good prospect? These key questions will not only give you a detailed analysis of the coin project but help you draw a conclusion before investing in its ICO.
6. Evaluate on its token distribution
Are cryptocurrency meant for project owners or the whole community? This is one question that needs to be addressed in regards to the share of token distribution during ICO sales. ICO sales should focus on higher percentage for the community rather than splitting it even between the community and the team. A token sale should be evaluated both on the share of the distribution of the ICO sales, its roadmap during each stage of its ICO sales, and its percentage gain between its ICO and its token distribution.