Do your numbers before entering an ICO - how to

[paxmao]

I am seeing so many new people here that I thought I would make a post about the basics. Surely many people know this, but others don´t:

If you are considering an ICO, you like the team, advisors, roadmap, idea, etc... There is a number you have to make.

Look a the total number of tokens.
Look and estimate the average price of the tokens in the sale.
Multiply those. That is the "marketcap" of those tokens.

If that number does not make sense to you, run away.

Example: Startup X sells 1 Million tokens at 1 dollar each. They keep 3 million tokens. This startup is saying that their tokens have 4 million dollars of value total. Can be reasonable, although they are keeping too many tokens, so the value is unlikely to go up unless very good things happen.

Example: Startup Y sells 1 Million tokens at 1 dollar each. They keep half million. They are valuing the tokens at 1,5 million total and only keeping half a million. Much better.

Example: Startup Z sells 4 Million tokens at 1 dollar each. They keep 100 million. They are valuing the tokens at 104 million total and keeping most of it. It is nearly impossible for that token to be worth what you paid for it.

[Dydot]

Thanks a lot. This will definitely help the newbies.

[iblistenan]

Aweseome how can you show with that though. when investing in ICO i just see if the project interesting or not and is the comapany real etc. now this calcuation is added in how to pick an ICO to join for me. I only have two ICO anyway so im not really experienced.

[awazieik]

I am seeing so many new people here that I thought I would make a post about the basics. Surely many people know this, but others don´t:

If you are considering an ICO, you like the team, advisors, roadmap, idea, etc... There is a number you have to make.

Look a the total number of tokens.
Look and estimate the average price of the tokens in the sale.
Multiply those. That is the "marketcap" of those tokens.

If that number does not make sense to you, run away.

Example: Startup X sells 1 Million tokens at 1 dollar each. They keep 3 million tokens. This startup is saying that their tokens have 4 million dollars of value total. Can be reasonable, although they are keeping too many tokens, so the value is unlikely to go up unless very good things happen.

Example: Startup Y sells 1 Million tokens at 1 dollar each. They keep half million. They are valuing the tokens at 1,5 million total and only keeping half a million. Much better.

Example: Startup Z sells 4 Million tokens at 1 dollar each. They keep 100 million. They are valuing the tokens at 104 million total and keeping most of it. It is nearly impossible for that token to be worth what you paid for it.

Thanks a lot for this info. You are right. Many investors jump into Icos without doing their due diligence or looking at market cap

[wilberthh]

Nice way to put it OP, although I don't really get it lol! *sorry*

In my case, before I investing in any ICOs, I'll check their total supply first, then their whitepaper, then roadmap, then the team behind it, and the last but not least, their mission. I love an ICO with infographic pictures too, it makes me more confident to invest in it.

[paxmao]

Nice way to put it OP, although I don't really get it lol! *sorry*

In my case, before I investing in any ICOs, I'll check their total supply first, then their whitepaper, then roadmap, then the team behind it, and the last but not least, their mission. I love an ICO with infographic pictures too, it makes me more confident to invest in it.

Ok,put it this way, I am selling you oranges. I have 1000 oranges and I will be selling 10 to the public.

Let´s say that I manage to convince 10 people to buy my oranges at 10 dollars each. I will get 100 dollars.

Now, since I have 990 oranges left and the market price is 10 dollar per each, then I have 9900 dollars in oranges, that is, my tokens are worth 9900 dollars.

Except that it is not true at all! I got 100 dollars and a lot of oranges and when the people who bought them try to sell them they won´t even be able to get 10 cents per each because there are too many oranges and they are not worth 10 dollars at all, even I scammed people into believing it.