Over the past few months we've seen many cryptocurrencies skyrocketed which led to many investors flocking towards the next booming ICO. However, due to the unregulated nature of the cryptocurrency space, a number of hoax ICOs now exist on the blockchain. This unfortunately becomes a risky business when choosing an ICO to invest in.
Therefore as a potential investor, you would need to conduct thorough research, which also identifies the legitimacy and quality of an ICO. The team at Mo Works have crafted a step-by-step approach to choosing an ICO that will go the distance.
1. Consider the Team and Their Experience
Do they look like professional team? Do they have experience? What is the track record of the leadership team? Review and scrutinise the team to ensure that they are real personas and have the necessary skills required for a successful ICO.
2. Understand the Tokenomics Behind the ICO
Find out the role, features and purpose of the token. Understand the utility of the token within the business model. If the token usage is obscure, not well explained, or not defensible, there is weakness in that model. Is the token tied to a product usage, i.e. does it give the user exclusive access to it, or provide interaction rights to the product?
3. ICO Model And Market
Is an ICO release the right option for the product or enterprise? Does a crowdfunding model suit the business venture? Is the blockchain audience the right market for the product or enterprise?
Participating in an ICO launch an be a risky business! Be sure to review whether the product or enterprise has been modelled for successful market capitalisation. The business model should also have long term value—it should be a valuable asset for the market and have purpose in order to retain its success over time ... Make sure that the ICO business model is suited to the cryptocurrency space with an appropriate product and a fitting marketing campaign to save yourself from making some risky investments!
4. Review Their Online Presence
Does the business have a strong online presence? Do they have an established following base? What is being said about them on cryptocurrency forums? This step can help you gauge whether an ICO is likely to succeed or fail before its launch …
Businesses that have larger follower bases are more likely to have a substantial number of people participating in their token sale. A strong online presence is also a good indicator that the enterprise is legitimate—with all the scammers on the blockchain you can never be too careful!
Do they have a well-constructed whitepaper and does it have all the relevant information?
The importance of transparency when you are choosing an ICO cannot be overstated! Be sure to only invest in business ventures that are open and honest about their strengths and their weaknesses—you want to be informed and confident about the project.
The whitepaper should also inform you about the current state and strategies of the company ie. does it have a minimum viable product? Participating in an ICO which already has a working product can help remove a number of major concerns.
If you don't have access to important information it's impossible judge the quality of a business model! Be sure not to participate in anything that isn't upfront about their business or provides conflicting or limited information.
Consider these factors before participating in an ICO. These steps for assessing quality may help you determine the level of risk—and hopefully save you from making poor investment decisions.
The more information that you seek-out about ICOs (and about cryptocurrencies in general), the more success you will have when investing in an ICO.
Any additional information that you can find about the company, team, product, and/or business model will give you the confidence in your decision to invest in an ICO.
Scammers are becoming increasingly common in the cryptocurrency space, so watch-out and report anything suspicious, and never invest in anything that makes you feel uncomfortable or apprehensive.
Keep a lookout for inconsistencies or anything else that may seem suspicious throughout the whitepaper/posts/emails etc. being released—to be certain that the ICO is not a scam.
Always remember, however, to only invest what you are willing to lose.