LIST: How to evaluate ICO opportunities

[drakegon]

Thank you, that's a very comprehensive list.
For dummies that want a shortcut to that, simply go to the ICO bench and see what reviews does the ICO have, those reviews are from blockchain expert.

[Ging]

thank  you very much for such a valuable thread such as this one really sometimes we have doubt to choose an ico to invest in with increasing waves of upcoming icos which makes such threads  really important.

[MichaelMeu]

Are these two sections actually the same thing??? Should I combine them into one section "Minimum Viable Product"?

3b. (Functioning) Prototype: how strong is the prototype?
Is there a working prototype code working on a testnet?
Do they have prototype code at all (even if its not currently executed)?
Does the code have commentary?
Does the commentary explain clearly the purpose of the function?
Are the functions a reasonable length? i.e. are they less than 50 lines?

4. Minimum Viable Product: how solid is the product?
Is there a working prototype?
Is the product's technical specification thorough and does it demonstrate mastery of the subject matter?
Are there people out there who want and need this product right now?
Does the product benefit from network effects?

Yeah I would combine these sections personally. Incorporate 4 into 3 imo; I would title 3b 'Minimum Viable Product: how solid is the product', followed by 'Is there a working prototype?', put the current content of 3b after that, then complete the section with 'Is the product's technical specification thorough and does it demonstrate mastery of the subject matter?
Are there people out there who want and need this product right now?
Does the product benefit from network effects?'

[Ging]

for me i have always use to go on hunch and of curse on some researches like the whitepaper and the background of the dev team and olso the traction that ico has made among the crypto community on different channels such as telegram and reddit etc...

[Hafamot]

I really appreciate your effort on this as this is a wide opener on ICO with basic lesson and knowledge on it.
It is a guide for all new entry and beginners.

Thank you

[MichaelMeu]

SEEKING INPUT 

May I have your input on the order of the sections, the titles of the sections, and the brief description next to each section title.

Here are the current sections:

1. Token Purpose: what need does the token address?

2. Competitive Analysis (SWOT): is this unique in some way?

3a. Technology: what is the tech?

3b. (Functioning) Prototype: how strong is the prototype?

4. Minimum Viable Product: how solid is the product?

5. Team: who's running the show?

6. Advisors: who are the big guns? (mentors and advisors)

7. Roadmap: where do they plan to go?

8. Hype: what are people saying about the ICO? (ratings + community + PR)

9. Token Offering Structure: can I make money?


Thank you!

Crypto-Kristen 

I think the titles are by and large pretty good. I'd update the numbers to reflect my previous comment. Couple of things I'd change personally.
Roadmap - What is the team's timescale for implementing their proposals? How detailed is it? And how realistic is their vision?
I'd have in the roadmap section at the end - is token distribution linked to roadmap? This can be seen as a good indicator of a solid project. IF it begins with a reasonable low market cap, and the amount of tokens which are tied up in development team whose distribution is linked to the team meeting their roadmap goals, then this can be interpreted as a good sign of a promising ico.

Consequently I'd then put the 'Token Offering Structure' - section after the roadmap section as those two would link in nicely together. I'd change the title of the token offering structure - can I make money? Seems a little bit flippant imo, for me ico investing is medium-long-term investing. Sure you could make profits in the short term but if you've done your research on icos properly, then the medium-long term potential is so much greater than the short-term potential that it'd be silly to sell in the short term.

So I'd actually call it 'Token Offering Structure: How likely am I to get burned?' . Emphasises to everyone that investing in icos is inherently risky, and the best we can do is reduce this risk as much as possible (such as spotting red flags e.g. devs holding too many tokens etc. (=>50%)).

[MichaelMeu]

SEEKING INPUT 

May I have your input on the order of the sections, the titles of the sections, and the brief description next to each section title.

Here are the current sections:

1. Token Purpose: what need does the token address?

2. Competitive Analysis (SWOT): is this unique in some way?

3a. Technology: what is the tech?

3b. (Functioning) Prototype: how strong is the prototype?

4. Minimum Viable Product: how solid is the product?

5. Team: who's running the show?

6. Advisors: who are the big guns? (mentors and advisors)

7. Roadmap: where do they plan to go?

8. Hype: what are people saying about the ICO? (ratings + community + PR)

9. Token Offering Structure: can I make money?


Thank you!

Crypto-Kristen 

I think the titles are by and large pretty good. I'd update the numbers to reflect my previous comment. Couple of things I'd change personally.
Roadmap - What is the team's timescale for implementing their proposals? How detailed is it? And how realistic is their vision?
I'd have in the roadmap section at the end - is token distribution linked to roadmap? This can be seen as a good indicator of a solid project. IF it begins with a reasonable low market cap, and the amount of tokens which are tied up in development team whose distribution is linked to the team meeting their roadmap goals, then this can be interpreted as a good sign of a promising ico.

Consequently I'd then put the 'Token Offering Structure' - section after the roadmap section as those two would link in nicely together. I'd change the title of the token offering structure - can I make money? Seems a little bit flippant imo, for me ico investing is medium-long-term investing. Sure you could make profits in the short term but if you've done your research on icos properly, then the medium-long term potential is so much greater than the short-term potential that it'd be silly to sell in the short term.

So I'd actually call it 'Token Offering Structure: How likely am I to get burned?' . Emphasises to everyone that investing in icos is inherently risky, and the best we can do is reduce this risk as much as possible (such as spotting red flags e.g. devs holding too many tokens etc. (=>50%)).

Oh and the hype section, I like it. Although I spotted on one ico site that some of the most successful icos were the ones with the least amount of hype. Just a thought

[jack107]

So just looking at the list, where how would you rate a project like Polymath?? Platform for launching security token projects. Recently partnered with Overstock as well. https://polymath.network/

[MichaelMeu]

for me i have always use to go on hunch and of curse on some researches like the whitepaper and the background of the dev team and olso the traction that ico has made among the crypto community on different channels such as telegram and reddit etc...

I think people tend to over-think with their gut. This list is , at least from what I've seen on the net, the best way to counter this. Don't become emotionally invested in coins, judge only by reason and the rest will come. Not to say that every ico has all this information available to be evaluated, but this list's more of an 'ideal' scenario list. And if you can't find all the information from the prospective ico's website or whitepaper, communicate with the devs and ask them to find it out (if at all possible and, if it isn't, then that's information in itself) (Y)

[MichaelMeu]

So just looking at the list, where how would you rate a project like Polymath?? Platform for launching security token projects. Recently partnered with Overstock as well. https://polymath.network/

This feels like subtle shilling tbh. We're not here to evaluate icos. We've not even finished sorting and organising the list yet so please refrain from posting things like this. Perhaps there is potential in the future for those of us who are keen to invest in icos to create a private group and take a 'divide and conquer' approach to rooting out the chaff from the wheat. I'll communicate with CryptoKirstie with it in the coming days. But this is just an idea I've had there and nothing is in place at the minute so please don't hold your breath. Equally, I (personally) wouldn't want passengers who are wanting to just piggyback off the (many of hours of) work of those who are willing to researching icos to discover the most viable projects.

Please no one else post icos to review, we are creating a guide here, not a research unit.

[MichaelMeu]

This is a great list man, I can't see much else to add to it. I will be forwarding people to this thread in the future!

Unless I'm mistaken, Crypto-Kristen is a woman, considering the effort she's went to for this list you could at least secify her gender right, would be a nice token of appreciation

[Kristen_Colwell]

I want to add about point 5 (team)
It is good team if they participated in many blockchain event or seminar. It is a prove that they are serious team to run ICO and without intention to scam people.

Great suggestion. I added this "Have any members of the founding team participated in blockchain and/or cryptocurrency industry events?" Thoughts on the wording?

Thanks,

Crypto-Kristen 

[Kristen_Colwell]

different token might have with same or similar service as developer to works on manage with customs of details with strategy as lying with the whitepaper for investors to sees as decision to put of parts with investment unit with the projects.

  ???Please rephrase, I'm confused.

Thank you!

Crypto-Kristen

[Kristen_Colwell]

Thank you a lot for this list. It is a good start to evaluate if an ICO is worth to invest or not. I think this really helps especially newcomers and beginners to check if an ICO is legit or just scam. Hopefully it will help to prevent scamming from this forum. Everyone good luck with your ICO choices.

All the best,

Peterparker9191

Glad to hear you find it helpful! IMHO, The cure for scam fears is information from reliable sources. 

Best,

Crypto-Kristen

[Kristen_Colwell]

Thank you, that's a very comprehensive list.
For dummies that want a shortcut to that, simply go to the ICO bench and see what reviews does the ICO have, those reviews are from blockchain expert.

Ha! I thought the same thing before putting this list together. However, I've seen evidence of ratings manipulation on ICO Bench, so not a fan of relying on it too much. I'm a fan of unbiased data... or at least as unbiased as possible. 

Thanks for your support,

Crypto-Kristen 

[Kristen_Colwell]

Are these two sections actually the same thing??? Should I combine them into one section "Minimum Viable Product"?

3b. (Functioning) Prototype: how strong is the prototype?
Is there a working prototype code working on a testnet?
Do they have prototype code at all (even if its not currently executed)?
Does the code have commentary?
Does the commentary explain clearly the purpose of the function?
Are the functions a reasonable length? i.e. are they less than 50 lines?

4. Minimum Viable Product: how solid is the product?
Is there a working prototype?
Is the product's technical specification thorough and does it demonstrate mastery of the subject matter?
Are there people out there who want and need this product right now?
Does the product benefit from network effects?

Yeah I would combine these sections personally. Incorporate 4 into 3 imo; I would title 3b 'Minimum Viable Product: how solid is the product', followed by 'Is there a working prototype?', put the current content of 3b after that, then complete the section with 'Is the product's technical specification thorough and does it demonstrate mastery of the subject matter?
Are there people out there who want and need this product right now?
Does the product benefit from network effects?'

Yes, totes agree. I'll work on this change. It's not live yet.

Crypto-K

[Kristen_Colwell]

for me i have always use to go on hunch and of curse on some researches like the whitepaper and the background of the dev team and olso the traction that ico has made among the crypto community on different channels such as telegram and reddit etc...

I think people tend to over-think with their gut. This list is , at least from what I've seen on the net, the best way to counter this. Don't become emotionally invested in coins, judge only by reason and the rest will come. Not to say that every ico has all this information available to be evaluated, but this list's more of an 'ideal' scenario list. And if you can't find all the information from the prospective ico's website or whitepaper, communicate with the devs and ask them to find it out (if at all possible and, if it isn't, then that's information in itself) (Y)

YES! We are on the same page. I don't expect to locate an exact answer to each question for every ICO researched. But I expect to find "blank spots" that warrant more attention based on how easy/difficult it is to find answers and how my gut feels about those answers.

-Crypto-K 

[Kristen_Colwell]

This is a great list man, I can't see much else to add to it. I will be forwarding people to this thread in the future!

Unless I'm mistaken, Crypto-Kristen is a woman, considering the effort she's went to for this list you could at least secify her gender right, would be a nice token of appreciation

Hey, MichaelMeu...

THANK YOU 

[Kristen_Colwell]

Wow...great feedback from @MichaelMeu, thank you! THE LIST is looking sharp.

Also, re: the hype section. Note that the response to each question is not necessarily positive/negative, just facts... so a lack of hype despite positive factors in other areas would not strike an ICO from consideration. BUT if other factors are also problematic, then non-existant or negative hype can make an impact of the ultimate success of the ICO.

 
Crypto-Kristen

[Kristen_Colwell]

Hi all,

I'm working this list of factors to consider when evaluating an ICO for investment. This is a LIVING LIST, and I'm seeking input so that I can create a public checklist of sorts. Share your thoughts!

I'll constantly update the questions on this list based on new information. Ultimately, we should be able to evaluate an ICO opportunity by working through the checklist. See the end of the list for sources...there will be many in addition to the feedback I get here.

One list to rule them all!!!

SO, first step was getting the sections down. Now, I am reviewing ICO evaluation articles and adding relevant questions to the sections below:

Evaluating ICO Opportunities

1. Token Purpose: what need does the token address?

• Is the token new and no other token offers the same service?
• Does the token have a clear purpose?
• How broad or narrowly defined are the use cases for this blockchain?
• Does the token provide return to token holders?
• Does the token reward users for contributing resources towards the creation of a shared service that will benefit all users?
• Can the resources contributed by users be verified by anyone?
• Does the token align incentives to simultaneously accelerate growth and token value?
• Who will support the token?
• Is the token structured with centralized control or a decentralized governance?
• Is the token a utility token (usage token or work token) a security token, or a combination?
• For usage tokens: is the digital service being offered useful and does the network underlying the digital service aggregate resources (hashing power, file storage, etc.) that will differentiate the service in the long-term?
• For work tokens: is there a strong network emerging that wants to contribute and is the UX well thought through? And is the service offered useful to people?
• For security tokens: is there some technology underlying the security that gives the token a long-term competitive advantage?

2. Competitive Analysis (SWOT): is this unique in some way?

• Does the project benefit from being on the blockchain? Should it be on the blockchain?
• Can the company successfully dethrone any blockchain-based competitors in their industry?
• What are the possibilities past the first use case?
• Is there a core technical or product advantage that is likely to lead to competitive differentiation?
• Does the company have strategic partnerships with trustworthy sources within the industry?
• Is it impossible to substitute the use of the token for another?

3. Technology: what is the tech?

• What type of technology is it? (DApp? Infrastructure? Currency?)
• What blockchain is it running on?
• Are they developing their own infrastructure instead? If so, why?
• Is the token mineable?

4. Minimum Viable Product: how solid is the product?

• Is there a working prototype?
• Is there a working prototype code working on a testnet?
• Do they have prototype code at all (even if its not currently executed)?
• Is the code a copycat that implemented no new features?
• Does the code have commentary?
• Does the commentary explain clearly the purpose of the function?
• Are the functions a reasonable length? i.e. are they less than 50 lines?
• Does the code allow for rapid expansion of user base and network interactions?
• Are there any external audits of the code?
• Is the product's technical specification thorough and does it demonstrate mastery of the subject matter?
• Are there people out there who want and need this product right now?
• Does the product benefit from network effects?

5. Team: who's running the show?

• Who is the founder, what is his/her background? (Have they built and sold a company before, or a new entrepreneur?)
• Can the team be found on LinkedIn and Github?
• Is the team exceptional technically, inclusive, transparent, objective and capable of fostering a vibrant global community?
• Can this team attract partners and participants?
• Are there people on the team who understand marketing and evangelizing?
• Does the team have a history of success, demonstrated ability to overcome obstacles to success and strong desire beyond money?
• Has the founding team demonstrated the characteristics (inclusive, transparent, objective, etc.) necessary to build a healthy community?
• How will the team continue to communicate their progress?
• Does the company blog regularly about their work?
• Have any members of the founding team participated in blockchain and/or cryptocurrency industry events?
• What is the founding team's expertise with cryptocurrencies and blockchain? Are there any red flags concerning their credibility in these areas?
• Is the team able to explain, in relatively simple terms, the value derived from using the blockchain?
• How many developers are on the team?
• Do the team's developers have active GitHub profiles?

6. Advisors: who are the big guns? (mentors and advisors)

• Are there any industry experts backing the project financially or as advisors?
• What tangible benefit (i.e. advice or strategic connections) do advisors provide the company?
• Do advisors include the project on their own public profiles such as LinkedIn?
• Have advisors discussed the project publicly and recently?
• How involved are the advisors in the project's online community?

7. Roadmap: where do they plan to go?

• What is the team's timescale for implementing their proposals?
• How detailed is the plan?
• How realistic is the vision?
• Are the goals achievable based on what the team has accomplished to date?
• Is token distribution linked to the roadmap?

8. Token Offering Structure: how likely am I to get burned?

• What is the hard cap?
• What is the soft cap?
• How many tokens are being created?
• What is price per token?
• Is there a pre-sale?
• Who has written up the token issuance contracts and actual token issuance software?
• Which blockchain infrastructure is backing up their sale?
• Will the software platform generate new tokens?
• What is the planned use of funds? (e.g., marketing, legal, development, etc.)
• What share of the token distribution is allocated to bounty program?
• How are tokens put into the hands of investors and interested individuals?
• Are the founders holding onto most tokens?
• How long is the vesting period before investors can diversify?
• Are the funds in a multi-signature wallet?
• How do you buy tokens? Is there Escrow or direct to a company wallet?
• Is the team going to destroy or redistribute a significant part of unsold tokens?
• Is the token distribution coming directly from a smart contract?
• Is there a cap on funds raised per person?
• What rights does the token provide the investor?
• Are there any limitations on the ability to resell the coin or token?
• Is there a lock-out period? If so, for whom?

9. Hype: what are people saying about the ICO? (ratings + community + PR)

• Is there a well-developed whitepaper?
• Is there a professional website?
• Does the project have an announcement (ANN) thread on BitcoinTalk?
• Is there a Reddit community?
• Is there an official presence on Slack, Rocketchat, Gitter, Telegram?
• Does the company report progress on a regular basis?
• Are there a significant number of users on the main social media pages for the project? (Bitcointalk, Telegram, Twitter, Medium, and YouTube)
• Is the social community diverse?
• How is customer service and tech support on the project's social media accounts?
• Is there a bounty program?
• Is there an airdrop?
• How often has the project been mentioned in the press?
• Has the project been mentioned in mainstream technology media and in prominent finance publications? (Techcrunch, VentureBeat, Forbes, WSJ, Reuters, etc.)

10. Legal Considerations: is this on the up-and-up?

• Does the company have a physical address listed publicly?
• In what jurisdiction is the company incorporated?
• Do either national or international regulations apply to the project?
• Is the ICO compliant in your country?
• What legal structures are being disclosed?
• If a security token: federal and state securities laws require investment professionals and their firms who offer, transact in, or advise on investments to be licensed or registered. Is this the case?
• Is there a SAFT agreement?
• How is security handled?
• What are the apparent, perceived or real regulatory risks?
• Are there plans for external or internal audits?
• Have they published the terms and conditions of the sale in clear language?
• If there is a DAO (Decentralized Autonomous Organization) -like component, is its articulation realistic and well grounded?

Thanks in advance for your input!

Crypto-Kristen  

SOURCES:
1. "Our Process for Evaluating New Tokens" by Nick Tomaino https://thecontrol.co/our-process-for-evaluating-new-tokens-4627ed97f500
2.  "Scrap the White Paper: How to Evaluate Tokens and Blockchains" by Coindesk https://www.coindesk.com/scrap-white-paper-evaluate-tokens-blockchains/
3. "How to Evaluate an Initial Coin Offering" by Strategic Coin http://strategiccoin.com/evaluate-initial-coin-offering/
4. "Due Diligence: How to Evaluate an ICO" by Cryptos R Us https://cryptosrus.com/due-diligence-how-to-evaluate-an-ico-initial-coin-offering/
5. "Due Diligence: How to Evaluate an ICO Investment" by Bitcoin Market Journal https://www.bitcoinmarketjournal.com/ico-due-diligence/
6. "10 Steps for Evaluating Digital Asset Crowdsales" by  Token Market https://tokenmarket.net/blog/how-to-invest-to-ico-and-blockchain-tokens/
7. "10 keys for evaluating Initial Coin Offering (ICO) investments" by CryptoPotato https://cryptopotato.com/10-keys-evaluating-initial-coin-offering-ico-investments/
8. "Methodology" by ICORating https://icorating.com/methodology/
9. "ICO Analysis Framework" by Kasper Rasmussen https://blog.ethfinex.com/analysing-icos-4abe41930f04
10."Evaluating Tokens and ICO" by HackerNoon https://hackernoon.com/evaluating-tokens-and-icos-e6c22c1885bb
11. "ICO Analysis Framework" by MT Kander http://www.mtkander.com/cryptocurrencies/ico-analysis-framework/
12. "How to Value Cryptocurrency" by HackerNoon https://hackernoon.com/the-7-things-you-need-to-know-from-the-valuing-cryptocurrency-conference-call-c238095a03b9
13. "White Papers Versus Other ICO Evaluations" by Financial Advisor Magazine https://www.fa-mag.com/news/white-papers-versus-other-ico-evaluations-36272.html
14. "How to evaluate a Blockchain ICO" Nami Consulting http://consultnami.com/how-to-evaluate-a-blockchain-ico/
15. "How to Evaluate an ICO (a VC Perspective)" by Lauren Stephanian https://medium.com/the-mission/how-to-evaluate-an-ico-a-vc-perspective-65ac781971b6
16. "Investor Bulletin: Initial Coin Offerings" by United Securities & Exchange Commission https://www.investor.gov/additional-resources/news-alerts/alerts-bulletins/investor-bulletin-initial-coin-offerings
17. "How to Evaluate an ICO" by Shermin Voshmgir https://medium.com/blockchain-hub/how-to-evaluate-a-ico-part-1-c6829d4de766
18. "ICO Bounty Programs: Your community should be more than Bounty Hunters" by Brian D Colwell https://briandcolwell.com/2017/12/ico-bounty-programs-your-community-should-be-more-than-bounty-hunters/.html
19. "The ICO crapcoin checklist" by Matthew Roberts http://roberts.pm/ico_crapcoin_checklist
20. "4 Criteria For Evaluating Blockchain ICOs" by CoinDesk https://www.coindesk.com/evaluate-blockchain-initial-cryptocurrency-offering/

CHECK IT OUT!
Lots of updates. Thank you @MichaelMeu, my Telegram pals, and this CoinDesk article

Enjoy and share your feedback.

Crypto-Kristen