Altcoins Talks - Cryptocurrency Forum
Learning & News => Announcements [ANN] => Tokens/Coins Offerings (ICO, IEO, etc.) => Topic started by: paeijwei on May 23, 2018, 04:33:15 PM
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I’d like to know what types of questions come to mind when reviewing a potential initial coin offering (ICO) investment. To start off, I have provided some of the questions I ask myself, along with some pointers.
1. What is the problem they are trying to solve and what is their plan for solving that problem?
2. Is it a feasible goal that can be measured by short-term, mid-term and/or long-term milestones? Does another project exist with the same/similar goal of the ICO? How do they compare? What blockchain platform are they using? Does the product align well with the vision?
3. Has the project built a product? If they have not, then I advise you move on and ignore the fancy titles of the team. If the project has been built, how many repositories are complete? An empty or non-existent GitHub is often a red flag.
4. Lastly, what does their telegram/discord group look like? You should ask questions about their whitepaper, then, see how immediate and clear the responses are. A busy team that is constantly on social media and/or Telegram suggests that it is not a scam.
I know it’s really tough to come across a rating system that is not influenced by ICO makers, advisors, or bribes.
If you would like to access an accurate and precise cryptocurrency ICO ratings website, I recommend Cointelligence’s: https://www.cointelligence.com/content/ico_list/
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And how to protect yourselves from exit scam ? That's the biggest question
Btw recently Titanium blockchain that was supposedly to provide infrastructure have left all investors with nothing
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There are a few signs that can predict that an ICO is fraudulent and can end up in an exit scam. These signs include:
1- The team of the ICO doesn't have adequate experience in the blockchain technology and/or the specific sector of the project. This can be checked by thoroughly examining the ICO's "Team" page and the LinkedIN profiles of all team members.
2- Whenever an ICO promises guaranteed profits, this should be an alarming sign, especially if the amount of profits is excessively high.
3- An empty Github repository. Most ICOs are open source and hence, their Github repositories should include code that potential investors can assess. An empty repository is an alarming sign that make you start thinking that an ICO might be fraudulent.
4- If the blockchain technology doesn't relate to the idea of the project, or doesn't solve a problem related to the market sector of the project, this means that the ICO has only been created to put holes in the pockets of investors.
5- Absence of a whitepaper, or a poorly structured whitepaper, should raise a red flag.
6- High percentage of token allocation to the project's team is an alarming sign that means that the project will most probably end up to be a scam. A project's team should not be awarded more than 10-40% of the total token supply.
7- Lack of a clear roadmap, or presence of an unrealistic roadmap, should also raise a red flag.
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What I would also consider looking at if actually investing, is look when their twitter was founded and also website... if it was formed less than 3 months ago for example I feel that this has to be a red flag... also consider looking what country the project is operating in.. there are very weird laws about how they can do things such as pay or approach exchanges... make sure the legality of crypto in their project so you don't get burned with surprises later... ones I for sure avoid are USA, China, and Germany.
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It's difficult to identify those fake ICO as they are almost perfect in your review but in the end of the sale their telegram and website were no longer accessible. As for me, this is the reason why investors will just wait at the exchanges and buy at dip same what happen last week with many altcoins at lower price by 50% than the ICO price.
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What I would also consider looking at if actually investing, is look when their twitter was founded and also website... if it was formed less than 3 months ago for example I feel that this has to be a red flag... also consider looking what country the project is operating in.. there are very weird laws about how they can do things such as pay or approach exchanges... make sure the legality of crypto in their project so you don't get burned with surprises later... ones I for sure avoid are USA, China, and Germany.
I wouldn't agree with you to consider a 3 months old Twitter account a red flag for an ICO, because after all, Twitter is just one of many social media channels that an ICO project would utilize as means for marketing and interaction with potential investors. However, establishing the ICO's website should be one of the first steps along any project's roadmap, so I expect the website to have been created at least 10-12 months before the actual launch of an ICO. When it comes to evaluating an ICO's website, I would also look for the registration period of the domain, and its "WHOIS" registration information. For example, an ICO's domain that is registered only for a period of 3 years should definitely raise a red flag. Also, an ICO's domain whose "WHOIS" registration information is lacking is definitely suspicious.
When it comes to the country of origin of an ICO, there is a lot to consider. One should feel suspicious if an ICO originates from the US, without complying with the SEC's regulations. Also, I totally agree that China is not currently suitable to found any crypto-related project. However, every case should be evaluated individually, and any claims of compliance of countries' specific regulations should be thoroughly investigated, before chipping in and buying any ICO tokens.
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I good idea that I use to do when I decided to invest in an ICO is to join telegram group and watch how community answer and of course how team answer to questions posed by potential buyers..