10 Benchmarks of a Good ICO
1. Team
Simply verifying the profile of the team, making sure that there are industry leaders, ensuring that the profiles are not fake. A quick Google can take you a long way. 6 or more with at least 2 superstars or industry leaders is a good mix.
2. Token allocation and funding
Pundix’s ICO is a great example.
Removing total investments as soon as an ICO’s coin reaches an exchange is a widely practiced strategy. Lately, more ICO’s are looking for ways to ensure the token is held for longer terms.
3. Token or coin supply
In some fundraising schemes, tokens that haven’t got sold get “burned” which increases their value. Sometimes more of the tokens go to the public, other times, the founders. Depending on the goals of the startup, assess if there is a scheme with the token supply that doesn’t play in your favor.
4. Purchase cap per person
When there are pre-sales before an ICO, often there are higher minimum investments or investments accepted by “accredited investors”. Basically, fewer individuals with more capital to invest. Some pre-sales such as Medical Chain, for example, have upwards of 50% more bonus. Sometimes up to 90% of the tokens are sold already. Some of these individuals are “whales”. People who control most of the market.
5. Know the Market Caps
Try to guesstimate and speculate a realistic market cap for an idea. If the market cap is low based on the fundraising, but something that could potentially become huge, there’s a lot of potential. Gems recently had a PR problem and falling out because of using the dutch auction model where the price of a token (and therefore the market cap) without an MVP, detailed road plan, and by offering early bonuses. This would lead to a product that would potentially have a significantly higher market cap than the product is worth. They have since worked to alter their fundraising model.
6. Project idea
What is the value proposition? Does it really need blockchain? Or is it just riding the hype?
7. Likely to end up on exchanges
Look into the type of token it is and ensure if it’s likely to end up on a reputable exchange. If not, how can one cash out of the ICO?
8. Working MVP or product
Are you investing in a product or an idea that has to be proven and validated? The more developed the product is, the safer it would be to hold long term.
9. Get Other Opinions
Here are some spreadsheets from individuals that rank ICO’s based on different metrics
Oh Hey Matty https://docs.google.com/spreadsheets/d/1OH-AoIggPLL9JGmx7i-Xsjzktc0JCEfLvHvEmDJmeWY/
Ian Balina https://docs.google.com/spreadsheets/d/1qvCCS6lwEH9nOa8KwQGTVhtQ3VXPzed3rXUqksDQkT0/
Sergio https://docs.google.com/spreadsheets/d/18ZA-_vwhfQSk6gWbl-_TkO3jYHZHeEFFw1uZfMWvYKs/
The GobOne https://docs.google.com/spreadsheets/d/1dCkbVKV-yz913WAsfJeNeNnnZCF9SXIt_uIyy49MLSM/htmlview
Websites:
10. Hype and activity among fans
Telegram groups are usually the best way to quickly pick up on market sentiment and product perception.
Here is a good example of due diligence on an ICO
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Disclaimer: This is not financial advice; you are responsible for your own money. All my resources are to be seen as research and conjecture. I do not claim having done any of it with my personal assets in the past or present.
