Identify an ICO in which to invest is not easy. A very large number of criteria must be analyzed in order to identify the best projects. The year 2018 had already exceeded in June by twice the total amount raised in 2017 by the ICOs. More and more projects want to take advantage of this craze and launch their ICO too. But any project does not require a new cryptocurrency. Let’s analyze these criteria.
If you want a full explanation of what an ICO is, go to this article.
The idea of the project
A new cryptocurrency project must have a reason to exist, that is, to answer a solution to an existing problem. If there is no problem, there is no project! The project must have its share of originality, without necessarily being a revolutionary idea. The competitors must not be too numerous and if there are competitors, the project must really stand out from the others and be the best of all competing projects. It is also necessary that the roadmap be clear and provided and that it projects itself for several years.
In addition, we must ask the question of the usefulness of a new cryptocurrency token and blockchain for this project. Why do they need a new token, can not they use Ethereum? Do they really need to decentralize or surf the ICO wave?
The documentation of a project is essential. It is also in the light of this documentation that we can quickly eliminate a good part of the projects.
At first, go to the official website of the ICO. Does it seem very professional? Is the information explicit and complete? Does it help to understand the purpose of the project?
The official website must have a link to the White Paper, or White Paper in French. This is the complete document presenting the project. If he misses the technical aspects, it’s a bad sign. Nor should he behave like a cookware vendor on the market by overselling the project or talking about revolution.
The project in which you will invest must have a product in beta that you can test. This is called an MVP, Minimum Viable Product, or Minimum viable product in French, that can more simply call a prototype. It is this MVP that will really give you the current progress of the project.
Finally, the official website must give the address of the GitHub in which the code must be made public. GitHub is a website for sharing computer content where developers make their code available to the community for proofreading or suggestions for improvements. Indeed, during any new cryptocurrency project, it is very important that the code is made public so that it can be audited and validated for both utilitarian and security aspects. Ideally, a trusted third party should have audited and validated the code.
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L’équipe et les partenaires
The team is one of the most important elements of an ICO. This is the brain of the ICO. Analyze the courses and profiles of the team. You must ask yourself at least the following questions:
How many are they? Do they have complementary profiles? What is their experience in the field of activity of their project and in the blockchain? Have they already done a lot of big projects from A to Z? Did their LinkedIn profile exist and how long have they been in the blockchain business? What are their relationships?
For technical profiles, see if they have a GitHub profile, if it is very active, and for how long.
Regarding the partners, check if they have already advised ICO projects and if they have been successful. Look at their experience, their backgrounds, their relationships. Re-source by going to the official social networks of the partner if he talks about the ICO in question. Note that Vitalik Buterin said he would never be a partner again, so if you see a project with such mention, run 😉
A large community following the project is essential for a successful fundraiser. Indeed without community, no fundraising. Beware, however, that many communities exist only because the project has launched a system of donations for people who have joined social networks, a method called Airdrop (literally: fallen from the sky).
We must check the existence of all social networks of the type Facebook, Twitter, LinkedIn, Telegram, Discord, YouTube, Instagram, Reddit, Medium, Bitcointalk, GitHub, Slack … If these networks have many members but little activity it surely means that the community is there only for the Airdrop. On the other hand, networks with a lot of interactions prove that the community is really interested in the project.
Public sale and Token
In the light of the analysis of the topics discussed above, if the project seems interesting and promising, we must finally see if the public sale is intelligently conducted. As a first step, check the minimum of the expected amount. Some very popular ICOs only let in investors with huge sums of money. If so, you will only be able to invest through a pool, that is, a group of people who all invest together at one time. If this is not possible, you just have to invest when the token comes out on the market, after the ICO. In addition, look at what stage of the project you are investing. The sooner you invest, the more ICO bonuses are great.
Look at the soft cap amount, which is the minimum amount expected for the ICO to be a success. If it is not reached, the funds will be refunded. If the minimum amount is too large compared to other projects of the same type, the project will be unlikely to succeed. On the other hand, a very weak soft cap can be serious.
In terms of funds allocation, look at the share that is actually allocated to the sale of chips, often around 70%. The rest is allocated to the salaries of the team, the partners, the marketing and bonus program, etc. If this allocated share is below 50%, it is not ideal, but not eliminatory.
Are unsold tokens burned (ideally) or kept in stock by the project team? This last case is not the best because then the project team will be able to reinject chips later to manipulate the price of the currency. Similarly, if the chips are not all sold but kept in stock, the course can be manipulated.
Finally, the greater the number of trading platforms for trading the new cryptocurrency is, the better. The ideal being that the token is exchangeable on the most known as Binance, Bittrex, Bitfinex …
Analyzing an ICO project takes time but is necessary in order to get a personal and objective idea of the potential of the project.
Multiply the sources, do not follow body and soul the advice of this or that influencer. Do your own research from various sources, do your own analysis! InvestIn ICO does not give investment advice.
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