The year 2017 saw ICO (Initial Coin Offering) boom and since then, this type of capital raising and investment has been at the center of attention in the blockchain and finance world. Also, most businesses and organizations have benefitted from this system as they have used it to raise capital. The benefits of this system will not make us forget the fact that most ICO's have failed awfully, some investors have been scammed, while some lost their money. Anyways, this has not deterred people. This article will discuss various points that must be taken into consideration before jumping into any ICO.
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Some of them are :
Team
This should be the first thing that should be analyzed by any investor. Most ICO projects that have failed have been as a result of the fact that the information of their development team was not shown to the public. Having a strong team happens to be one of the fundamental factors of a successful ICO. If your team of developers has worked in any industry prior to that time, the information should be shared with the public. Also, your CTO must have a strong record of success whether on a corporate or on a personal level.
The Timeline
The time frame or timeline of the project is very important. All ICO projects should have realistic and defined roadmap with a couple of set milestones. Also, it is important that you know if your project is the beta, prototype or alpha stage. Experts have advised that if you are seeking to invest in any ICO, you should look for an ICO that has a demo that proves that the particular product will work.
The Media Community
Every aspect of a project must be accessed. Most projects do not have a lot of media attention, so it is important that you as an investor should check for online forums and discussions that judge the particular project in an objective manner instead of reading contents that have been self-produced by the team. There are various social media platforms where you can get quality reviews on any ICO project.
Regulation
The White Paper of any project should have and always mention the regulatory body that overlooks the ICO. It is reported that most investors tend to support ICO's that are regulated by US governing bodies. If the project signifies which body that approves of it, then it is a good sign.
Distribution
Distribution here means the total number of tokens that will be given up for pre-sale and the total number of tokens that have been locked up. When the team of an ICO project withholds an unfair amount of token, then its price could be manipulated. The White Paper of the project should have a detailed note of how many tokens are to be distributed and the total number of tokens locked up should show market fairness.
Most ICO's have failed because they have neglected these important points. In summary, a strong team, the media community, the regulatory body and the total number of tokens to be distributed makes an ICO successful.