9 Criteria for evaluating a potential ICO investment project

What is ICO?

DEFINITION of ‘Initial Coin Offering (ICO)’
An unregulated means by which funds are raised for a new cryptocurrency venture. An Initial Coin Offering (ICO) is used by startups to bypass the rigorous and regulated capital-raising process required by venture capitalists or banks. In an ICO campaign, a percentage of the cryptocurrency is sold to early backers of the project in exchange for legal tender or other cryptocurrencies, but usually for Bitcoin.

9 Criteria for evaluating a potential ICO investment project

1. The team established the ICO

Learn everything you can know about the ICO project creation team, especially the development team and the advisory board. Study each team member for more information about them. You can find their name on google. Visit the Linkedin profile page. Look for the famous names on the project advisory board. Find out if the group has ever participated in an electronic money or ICO project that is successful or not and in which project they contribute.

2. Chủ đề về ICO trên Bitcointalk.org

A good ICO project has also reported on BitcoinBalkon.org before the ICO, Bitcoin is the largest and the first Bitcoin virtual forum and crypto-related topic. I recommend reading the user feedback carefully. The interest of investors will be answered or not. If the developer avoids answering a few questions, it’s a bad sign. Sending a personal message of how fast they respond is a good idea.

The number of posts made by members on Bitcoin represents the rank and activity level of the sender. Based on this, it is important for you to be aware of new people and reputable people.

Look for reputable reviews, as well as look for negative messages, which can sometimes be a warning sign. Select [All] to view all comments in the topic and use the CTRL + F (on the computer) to search for words like ‘scam’, ‘child’, ‘MLM’.


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3. Roadmap for development and venture capital funds

Evaluate the stages of project development. Does it have a whitepaper? Beta test? Is there an initial launch with limited functionality?

In the early stages, venture capital funds tend to provide capital to the development team. Try to find out if this information is available on that ICO. For example, Blockchain Capital or Fenbushi are two of Vitalik Buterin’s founders – the founder of Ethereum.

4. Community and media support

The importance of a potential ICO is to have a broad support community, such as a public slack for all investors. The openness of the developer is very important in gaining investor confidence. Let’s look at the scale and activity of the community to assess the ICO is reliable offline.

In addition, we also need to evaluate the project through other sources such as reddit, twitter and facebook. Watch out for bounty articles that only give positive information, exaggerate the project and do not have an objective view. It is possible that the ICO project is not as good as what you read.

5. What is their Token? Blockchain needed?

ICO means creating a Token (token) dedicated to the project. One of the most important questions that every project needs to answer is what is a Token? Why is not Bitcoin or Ethereum enough to serve as the project’s Token? Yes, many projects just make up a scammy story. ICOs can not be ICOs without their own token code.

Next we have to find out behind the coin code that is a really Blockchain technology. Or just fake ads.

6. Number of tokens (limited or unlimited)

An ICO project with unlimited number of tokens will be difficult to raise in the future. In addition, the greater the number of tokens, the lower the purchase price, which makes it harder for investors to sell, and the liquidity will decrease.


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7. Token Distribution – When and How?

An ICO project where the tokens are divided among the team members so much for example 40-50%, that project is worth worrying about. A good project needs to connect between the token release and the roadmap. Because each stage of development requires a certain amount of capital.

You should see the stages of their Token distribution. Some projects just released their codes after the ICO ended. Some projects need to develop a beta before releasing Token. If you look at the percentage increase of Etherium (one year between ICO and token distribution, about 500% achieved), Augur (1+ years, 1500%) and Decent (8 months, 350%), This breach creates a positive hype around the project

8. Evaluation of the ICO Whitepaper

Most investors do not read the whitepaper, although it contains all the necessary information about the upcoming project and the ICO.

We should read to know the positive aspects and limitations of the project. At the same time to answer the question what value does it bring to this world? You will be more secure if you know the money spent for good purpose.

9. Quality code – See on Github

Investors like us often do not have programming experience so it’s difficult to determine the quality of the developer. But there are several ways we can look at it:

The first is consistency: Read the comment on Github, avoiding the messy developer for “every piece of code, reflecting the attitude of the developer”
The second is the length of a function: A function containing more than 50 command lines will be quite confusing. Choose developers with easy-to-read and concise modules.
Third is open source: Good projects often use open source, to encourage community input and improve quality.

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