There are several attributes each project should have to be trusted (and give you good return on investment):
- Clear concept and realistic propositions.
- A strong team with public profiles and proved skills enough to complete the project.
- At least one technical co-founder (event if you are growing bananas) .
Community support (not only bounty support).
- Token sale goals and transparent procedure.
- It is reasonable to apply blockchain in the project.
There is a good thread on bitcointalk with many questions for ICO teams. Take a look at it first: How to evaluate ICO opportunities.
Pick 10–20 questions you like and use them during your custom research of an ICO.
Here we will mention most common red flags that you should be noticing during your review:
- There is no team. No public profiles of team members or they are not reachable in social networks (like LinkedIn). There are no photos with the team in one place. Investors give money to people, not white papers. If there is no team who will be responsible for your money then?
- The project idea is not clear, does not have anything to do with blockchain.
- There is no market for the project to work on. Creating new markets is way harder than to work on an existing one. Evaluating the potential of a non existing market is even harder.
- There is no hard cap, no expense distribution.
- There is not RoadMap with concrete dates (at least quarters).
- There is no social activity around the project. Social accounts where created two/three weeks before ICO — the team is just using hype to raise some money.
- The team has no MVP.
- There is a working project that is not very popular, and the team is just trying to give it another birth using your money.
- The team has more than 20% of the tokens created.
- There is more than 5% spend on bounty campaign.
- Team members never visited any blockchain events.
and a lot more… Stay in touch to be aware of all the red flags that ICOs have.
This article brought to you by TokensRecord Team.
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