The ICO market can be said to be very exciting, complex and requires a lot of analysis before investing more than ever. You can still earn a lot of money from good projects out there, but most will make you lose if you do not learn and prepare carefully.
Rule # 1: Choose the right ICO, focus on the true value of the project and avoid exaggerated ICOs.
When it comes to scale, it looks like the "golden ratio" would be ICO not too big and not too small. According to statistics, that range will be between $ 2 million and $ 10 million. Do not forget the essence of a true ICO is a start-up with the goal of calling for moderate capital to start a business.
In general, if the ICO and its team hold it well, any amount of $ 2 million to $ 10 million would be enough to complete the project or at least make a template for its product, providing one proof of concept. Conversely, if both the idea and the development team are poor, giving them $ 500 million can not solve anything.
Do not forget the purpose of the ICO is to get the initial investment money that the company needs to create its product / service. Only when they have done so will they need more money to expand their business.
By eliminating over-sized or over-inflated projects, we will significantly reduce the risk of tokens being "pumped and sold" and the "noisy" worthless. Not all small projects can not invite whales, only the probability they do is very low. You will also avoid getting into legal trouble, as often large projects will have higher legal risk because they attract too much attention and the investor community comes from many layers and tastes. Different geographical locations.
Rule # 2: Analyze the team behind the ICO and check to see if they are successful
If the ICO Founding Teams have not had any successful business activity - do not choose to trust them. Make sure that the founders have a clear orientation. They all have to prove their ability from previous projects to be able to "qualify" to receive your investment. Otherwise you are throwing your bloody money to those who do not know anything about creating a company from zero and developing it. And do not give them any experience whatsoever.
At the same time, if the ICO core team are successful individuals, then there is little chance they will commit wrongdoings, because not only their reputation but their whole life will go away.
By choosing a successful, experienced and well-targeted development team, you will significantly increase your chances of making a profit from the ICO. This principle can be said to be the most important, but I rank it second, simply because the legal risks associated with the number one are too great and can easily be dropped. Good management with experienced management team.
Rule 3: Stay away from ICOs that have "dead time" in the roadmap
The idea behind the ICO is to deploy an electronic currency that will be useful and widely accepted. This is only possible if the service provided by the ICO is progressive, breakthrough and delivers high value and immediately to the user. Therefore, it is unacceptable to wait until the alpha phase.
An ideal ICO is what gives you the feeling of "one hand" on the product / service it promises while the money is still being issued and the ability to spend the token at your own discretion right after it. finish.
Rule # 4: Make sure the market capitalization is fixed, the excess token after the ICO will be destroyed and there will be no future offers.
With the ICO surplus at the moment, one of the most common of these is that the projects do not reach the initial funding they set. This is generally not something too bad as long as the amount of money the ICO intends to call is around $ 2 million, and as mentioned above
Therefore, it is crucial that the token issuers immediately destroy the excess amount immediately after the offer is over. It will ensure that the current token supply corresponds to the market demand, keeping the balance of the economy.
In addition, it should be ensured that the project will not invite more investors through the issuance of the same currency in the future. It will protect you from the possibility of crisis oversupply and help prices rise from 500% - 1000% in just one year.
Rule# 5: The project needs to be based on the Blockchain platform and be groundbreaking in its field.
We are witnessing a large number of startup projects as ICOs simply because they only want to be part of this fertile slice without having to actually integrate Blockchain technology. You should read the whitepaper carefully and ensure that Blockchain is an integral part of the project and adds a unique value and competitive edge to the idea behind the ICO.
Otherwise, developers are just doing ICO purely for money - taboo in this area.
The services / products provided after the ICO must have core values and breakthroughs sufficient to create a fever in the user community.
Rule # 6: Developers must interact with investors often and they need tokens to add value to the project.
Another plus point for having a moderately sized project is that by then we will be able to easily connect with the development team. The best projects I've ever invested in are the ones where I was able to directly contact the CEO and founders through news channels in the user community.
Next, make sure that the founders want to get rich from their own tokens, not from the Ether they earn through the ICO. This will make their benefits equal to the interests of the investor, which is extremely important because it will give them the motivation to manage their investment properly and make every effort to General goal.
