ADN Coin Tips: 5 Signs to Check Before Investing on ICO’s
Investing in ICOs is a tedious task for anyone. But given the right knowledge, it won’t be anymore. Learn about ICO investment in this ADN Coin blog.
The Initial Coin Offering (ICO) process is the most common way to raise funds in the cryptocurrency space. It has been used by successful cryptocurrency projects like NEO and Ethereum, and the funds gathered powered the projects to what it is today. But as the cliche goes — there are two sides of a coin. Running alongside the positives, ICOs have been used as a mechanism for scams. Illegitimate ICOs overwhelmed the cryptocurrency world. Remarkably during its investment peak in 2017, data reports that 80% of ICO’s turned out to be scams and only 8% were able to properly operate.
The ADN team is all about protecting investments. This is why we put together this blog post to help users determine and choose their ICO investments wisely. Here are 5 tips to help you determine if you should invest or not.
Promises on Stellar Returns
Does the return on investment (ROI) promise sound too good to be true? It probably is.
The eye-rolling, obvious statement is very common in scams. We believe that the crypto market could give us incredible returns and yet there are driving forces that make it volatile and uncertain for investments. In this case, you should beware of ICOs that promise a tempting skyrocketing, but the unrealistic amount of return on investment (ROI) specifically stated within a short period of time.
The Core Team’s Shady Profiles
Who are the people behind the company? These are the individuals who will manage the business and benefit from the funds raised. A smart investor must make sure that these trustworthy-looking faces displayed on the team section are not fake. Make an initiative to track the names of the key positions, research their profiles and do a thorough background check about the team.
The CEO is the most important person in the core team and his reputation within the industry could be one of the deciding factors whether the company is a scam or a potential goldmine. You can check his credentials via LinkedIn and browse through his work experiences and connections to see if he’s genuine or not. Accordingly, developers are as significant as the bosses because they are the mastermind behind the structure and development of the project. Look for their portfolio and previous projects on GitHub if possible, and if they are not listed, then they are probably rookies in the field or simply frauds.
Also, many scams have listed names of prominent advisors. Make sure to cross-check their identities and examine the link between the ICO founders and its respective advisors.
A Shallow Whitepaper
It’s easy to create a document and add a few exaggerated words here and there. But a legitimate company will use their whitepaper to make the investors understand the business idea and recognize its potential to succeed. A person may not be able to grasp the technicalities behind the project, but its concept should make sense. A credible company ought to have an estimate on the numbers they want to obtain. If they are targeting to raise an exceeding amount that doesn’t equate to what they are trying to build, the ICO is very likely to be a scam.
Never Heard on Mainstream Crypto Media
If the ICO was never published or announced in the top news sources within the cryptocurrency industry, think twice before investing on it. A clean project usually tends to be on the spotlight. If the project has good design, structure and proper marketing plan, they would have likely sent press releases to prominent media companies. A company that is serious about its ICO will have a bold idea that will attract the interest of media and they will have the confidence to promote it everywhere for the right reasons.
Social Media Presence
Legitimate projects aim to create communities of like-minded people. They don’t usually resort to hype and buzzwords to get noticed in social media as they are confident in what their project is offering. If a project conducting an ICO has empty social media channels — beware. They may want to go incognito to refrain from answering questions. It would be better to find an ICO that is trying to build a community and allowing people to join in on the conversations.
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