What are the signs of a successful ICO?
Signs of a successful ICO project:
- The project must solve the real problems faced by millions of users. The market for this product, the segment, the main competitive, price and other advantages should be understandable.
- White Paper. Be sure to read White Paper, read the main project document. From this document you should understand the essence of the project, from the general idea to technical details. Good sign, when a clear business plan is presented with real goals, objectives, target audience, the main markets for which the product is targeted and the stages of financing. A bad sign is the abundance of “water”, masking the absence of meaning, vague wording and abuse of terminology.
- Venture capital participation is a good sign. The investment of venture funds in the ICO project at the “presale” stage is an important signal for the market that the project has been expertly evaluated.
- The team is the basis of success. The prospective ICO team should include experts, preferably with a successful history of commercial or technical projects.
- Presence of an operating prototype or MVP. MVP (Minimum Viable Product) is a minimally viable product. It can be an application, a demo version on the project site or a prototype posted on Github and other authoritative resources and analyzed by the crypto community.
- Economy of the released token. The purpose of the token should be so simple and understandable that you can explain it to several of your suggestions even to your grandmother. If this is a token for internal use (utility token), then we need to look at what specifically it can be spent inside the ecosystem, and how much it is a valuable resource. If the token is used as a security, then it is necessary to look at what cash flows and how the income will be paid to its holders.
- Advisors. A very important and really useful form of project support. Among the advisors there should be industry leaders, they can give the correct advice on the implementation of the project. Or at least this is a sign that they believe in him.
- News background of the project. Estimate project accounts on social networks (Facebook, Twitter, Telegram, Slack, YouTube, Bitcointalk), the number of subscribers, activity, comments. The projects will fly up — the ideas of which are capable of capturing and making talk about themselves thousands of people. At the same time, remember that the number of subscribers can be easily screwed, and positive feedback is bought at bounty companies.
- Road Map. The project should have a clear, step-by-step project implementation plan after the ICO — a “road map” with the designated amounts of costs and terms. A bad sign when in the structure of spending more than 30% are for marketing, referral and bounty companies.
- The project has a declared cap on the collection of funds, which reflects the amount of investment described in White Paper. However, proceeding from current market realities, projects in the range of $ 25 million to $ 70 million are the most attractive, since with such a hard cap there is potential for capitalization growth, as the average current capitalization of successful projects now fluctuates in the range of $ 150–250 million.
- Escrow is a disinterested person, third party known and respected person, who is the custodian of funds and to guarantee the transparency of the ICO. If the project has an escrow, then all the funds fall precisely to it, and not to the project itself. Those. it’s like a guarantor bank. Upon completion of ICO, the project begins to implement the actions that have been declared in the roadmap. At each stage of the roadmap, the necessary amount is required to complete this stage, and according to this fixed plan, Escrow issues the funds to the project.
- What is important after the ICO? Upon completion of the ICO, an important criterion is the number of tokens holders. This significative can always be checked, just enter the name of the token in the search box on the Etherscan.io website. It must compose at least 1,000 addresses, and the most successful projects have more than 10,000 addresses. Also important is the number of transactions: successful projects now have about 30,000 transactions per month.
In conclusion, I want to draw your attention to the fact that the presence of even all 12 points does not guarantee 100% success of the project, but significantly increases its chances. But the absence of most of the listed items, almost certainly guarantees its commercial failure.