In my previous post I wrote about the benefits of Pre-ICOs. I felt I needed to do a follow up. It was clear from the feedback that a lot of people are hesitant when it comes to Pre-ICOs and ICOs because of the risks.
The risks involving Pre-ICOs and ICOs can be reduced by good old fashioned research. There are two ways of going about it and my suggestion is that you use both methods.
Do your own research:
This is very straightforward. When a projects is announced they publish facts about the project on their site. What you want to do is do some fact checking for yourself. See if the numbers add up and if the published info holds up.
The propaganda
Break the marketing blah blah down into something that is comprehensible for you. The project will present you with some cool marketing buzz words and riveting stories but it is up to you to dumb it down and get to the heart of the story. Just ask yourself these important questions:
- What is the project trying to do accomplish?
- Is there a demand for their product/service?
- What is their unique selling point?
- Are the goals attainable?
- Who is the competition?
- Who are the partners? (be sure to check if the partnership is legit)
Ignore the buzz words like decentralized, cutting out the middle man, lightning fast transactions, secure transactions, decrease in costs etc. All ICOs use these terms.
The team
For this you need to do some googling, just look up the members of their team, every person should have some digital footprint. Are they for real or is it bogus?
The white paper
Yup, gotta read the white paper. To be honest I usually just skip the techie stuff myself and go straight for the summary and pictures. I do look for things that stand out or things that I noticed on the site and see if everything adds up. I also look if the white paper is something of quality and not something that has been hastily copy-pasted together.
The numbers
How many tokens/coins are available? How many will be distributed? How many are for the team members? If you know how many tokens will be distributed and at what price then you will be able to calculate the market cap. Check on WorldCoinIndex or CoinMarketCap how that number stacks up against the other crypto.
Proof of work
If possible check out their endeavours up until now. Do they have a working site? is it in Alpha, Beta, when are they planning to release their service to the public?
Check with the experts
Whenever I find an Pre-ICO/ICO that I find promising and I have done my homework (Method 1) I also check what others think.
Spreadsheets
These are spreadsheets made by knowledgeable crypto traders. They rate ICOs and add all the relevant info. Good examples are:
TheGobone
Sergio’s ICO ratings
Oh Hey Matty
ICO ranking sites
There are a number of sites dedicated to reviewing and ranking Pre-ICOs/ICOs. My personal favorites are:
ICO bench
ICO ranker
Top ICO list
ICO projects
Yup talk about governing ourselves. There are cryptocurrency backed projects out there that also screen ICOs. This is something I will be using a lot more in the future. Beside the fact that they screen the ICOs they also provide a way for the holders of their own cryptocurrency to invest in the ICOs that make it into their list.
WINGS lets you make forecasts for ICOs. A portion of the crypto from those ICOs is reserved for the forecasters. So you are indirectly investing in the ICO.
ICO Headstart is probably the most promising (and much needed) project for ICO investments. You can invest (and vote on) ICOs screened by their experts through their own cryptocurrency the MOAT token.
If you are reading this now then you missed out on the ICO Headstart Pre-ICO but their Public sale is coming up soon.
The thing with Pre-ICOs and ICOs is that you have to be sure of the ICO and play it safe. You can do this by doing good research. If you see any red flags don’t take the risk or you might be setting yourself up for a major disappointment.
Do your own research but also consult with the experts to see what they think.
PS. My 1K followers milestone is coming up. The first 10 people to congratulate me will receive a 100% upvote so stay tuned, my fellow Steemians.
