In a jumbled up online world — where a ridiculous amount of ‘accredited’ info is at our fingertips — it is easy to [initially] believe what we are told from the offset.
Meanwhile, there happens to be a hell of a lot of riff-raff who are purposefully meddling — some of which are good at their job (and others who are terrible). The trouble is, how can you tell what is worth acknowledging or what you should look out for to sniff a rat?
In today’s article Zkylos CFO, Victor Grinchenko, sparks the discussion surrounding confidence and genuinity. Have people nowadays literally got too much time on their hands or are they really contributing hard-earned knowledge to sway your interest?
Should You Believe All ICO Ratings?
The general idea of a public rating is to help protect an investor from making a loss. What’s more, a public score is to facilitate the maximization of profits — but this fact suggests the presumption of needing to deem a rating provider as a recognized, experienced industry ‘ninja’ who has devoted a considerable number of hours to reviewing a specific case, which sadly, is not always true.
Recent Affairs . . .
According to Business Insider, startups in 2017 alone raised 5.6 billion USD — just through the ICO/ITO process — which generates a remarkable field of interest for ICO ratings.
To appreciate the perspective of the subject as mentioned above, I spent a large quantity of time researching. Mostly, I Googled “ICO rating agencies,” and from here I studied dropdown firms to see, mainly, what it is that they are offering and precisely which approach they manage to be exploiting (in other words what they had stated on their websites).
Interestingly enough, what I found was a pattern: There are two main directions which seem to be the leading choice for most to use — either independently or as a combination.
~Approach #1: The ‘Expert’ Opinion.~
Firstly I noticed that many companies are choosing such a method of providing an ‘in-depth’ insight which utilizes some form of a scorecard. However, a so-called “expert opinion” raises several questions.
Here we see that there are two extremes faced in this area: “secret experts” vs. an “enormous experts list” — neither of which have accountability for the rating itself.
What I will say is this:
Who the hell are these god-blessed investing gurus? More to the point, what exactly were they responsible for in their investment banks? (If they ever worked in any.)
Also, do “crypto enthusiasts” or “media editors” make a generic input to analyze a project’s financial model? Perhaps they carry out ‘feasibility studies’ on one’s product for new markets?
My primary concern is this:
Do these people have enough time to read all of the data which is available on the dozens of appraised projects while making their own “37th ICO this year”?
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Flaw In The System
In the modern adult-world websites generally, have a name that is provided along with a direct number attached to contact the responsible partner or principal and raise questions to allocate such responsibilities. Unfortunately, this is not the case in ICO world — and by now it should be.
Regrettably, however, all you will find available on the web today is no more than mere salespersons to arrange the next money to be spent on your project.
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~Approach #2: Scorecards~
Now let us look at scoring models stated for investor risks determination.
Compared to a thousand-page Big 3’s rating methodologies ICO raters deliver a concise approach by making only dozens of bullet points. Overall, neither of these approaches were adequately structured nor did they have a strong logic.
Remarkably, even the assessment of media activity (which was once considered promising for project viability) nowadays translates as playing a minor role in the overall evaluation.
One thing I find hilarious (as well as hard to believe) is that there are teams spending time and money on generating so much hype — yet no way can they guarantee execution on a project’s milestones.
Ultimately, what I am saying is this:
Hype level was (and still is) considered as positive to the rating, but it’s nothing but money spent. So essentially spending money does not correlate at all with viability of the project.
Where Is The Evidence?
Following the link to one project appraisal, I had a long read on one of their rating websites. At a glance, it is obvious there is an absence of any project results such as MVP or even a demo.
Looking further, I found there is no code whatsoever! — (except a smart contract for ICO) — but hey! These people are stating that they are to secure significant funds during private rounds and showing numerous outstanding advisors.
So all this is “promising” that high and stable ranks are provided. At this point, there is a significant disruption between project viability and “expectations” proposed in the report.
It should not go unspoken that no clear assumptions and limitations for the reports usage are stated. Weak lines on “use your own brain and consult your advisor” could hardly be presumed as a fair precaution and it looks like the guys earned their money, so they did the rating intentionally for remuneration.
There are hundreds of ICOs with executives gone with the wind on their lambos. Personally, I wonder when the swell of justice will reach all the participants? Hopefully, Karma will bite every one of these assholes in the ass.
Overall
There will always be those out there to spoil the fun for everyone. Trolls. Scams. And of course, ordinary people going about their normal lives, just doing their job.
But ask yourself this question:
Do you consider the “I pay you cash — you give me a rating” as even a trick-scheme which should be accepted in this nasty world?
For what it is worth, Zkylos only wish to give advice for your safety: Take your own approach, with caution. Remember to research, study and scrutinize. Be smart.
No matter what, it’s always up to you what kind of investment approach to follow, but just remember: neither a rating agency imitation nor “enthusiasts” will earn you a real profit.
Please take the time to leave comments in the box below, share your experiences and thoughts so that we can create a better more informed world!
