2018-11-10 09:00 |
Initial coin offering (ICO) is a financing system that companies, usually startups, use to obtain funds to finance a business model and give value to the offered cryptocurrencies that they will use in their services or applications. Instead of stocks, investors acquire tokens that can be used to interact with and use the company’s application.
There are two main motivations for people to invest in ICOs:
Business Model: some investors are attracted by the solutions developed by these companies making them willing to make a contribution to the project. Return on Investment (ROI): some cryptocurrencies have experienced an incredible revaluation offering lucrative returns on investment.If you are interested in investing in ICOs, you should pay special attention to the following topics:
ICO search engine and rating system: there are websites which are specialized in publishing lists of upcoming, ongoing and concluded ICOs. They offer a summary of the project, tokenomics, leading team and ratings according to experts and AI engines. The most popular websites are ICObench, TrackICO, Coinschedule, ICOholder and ICOdrops. Documentation: this is the informative documentation offered on the ICO website which usually contains the business model, the ICO process and financial data. These will include the Whitepaper, which offers all the content of the project, the roadmap, financial and legal data. The Lightpaper will show a summary of the Whitepaper and the One-Pager will summarize the relevant points of the ICO. Tokenomic or token metrics: it is important to know how the tokens will be distributed and what percentage of them will be dedicated to public sale, to the team and to the investors. Take into account how the funds will be used, which is usually known as funds distribution. The dates of pre-sale and sale are important since many ICOs offer bonuses and discounts on the token price depending on the date of purchase. The payment methods are generally in Ether (ETH), Bitcoin (BTC) and FIAT money (USD, EUR and other currencies). Community and Investors: projects with strong communities are usually the most successful. Check the social networks of the ICO and join their Telegram channel, review how the managers respond to the questions of their investors, check how the investors talk about the project. Visit Bitcointalk and Reddit to read what people say and think about the project and pay special attention if users tip the ICO as a potential scam.The most important piece of advice is to always do your due diligence before investing in any project, regardless of how good it may look.
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