Sometimes investing in ICO projects is very complicated and risky, not a few investors who lose because of scam projects or projects that fail in the market. Doing research "be it deep or basic" to find out finalizing losses and see how much the crypto project has the potential for success/profits for investors. The following are some things that should be observed before investing in ICO projects
1. Advantages of Blockchain
Each Blockchain network has certain features, the use of Blockchain technology that is incorrect can cause project delays or failures. Also, not all sectors of life need a blockchain.
The whitepaper is a document that contains details of the entire project being worked on. The success of the project can be seen/determined by how well the WP is made because what is seen the first time by investors is Whitepaper. A good WP must contain the following points:
- The problems faced - these problems are the foundations of project construction. The level of complexity of the problem can determine whether or not the project is interesting
- Solution - is a way to solve the problem at hand
- Products offered - are tools to solve problems. generally, projects provide MPV / PoC to display solutions
- What tokens and blockchain types are used, generally there are three types of tokens namely Utilities, Security, supported assets.
- Business - Tokens must encourage ecosystems as well as the main values of ecosystems
3. Team Composition
Not all technical people understand the business, so the team composition must be balanced between the technical and non-technical teams and have good or relevant experience that matches the position they hold
The tokens distributed for the sale of Pre-ICO, ICO and Bounty must be balanced, and the giving of discounts or bonuses must take into account aspects of retail investor protection. Also, ICO sellers with Bonuses above 50% are very risky (scam/fraud)
5. Business Model
ICO is just a method to get funding for project development. Therefore, business development planning is a must to remain competitive, in addition to that the company must also have a plan and reserve funds to anticipate bad or unexpected events.
6. Social Media Activity
Activity & interaction between developers and community/fans on social media "like Twitter, Telegram, Bitcointalk and others" is also part of the success of ICO. High social interaction activities illustrate the success of the ICO because it shows the participation and enthusiasm of the community towards the ICO project.
7. Partnership and cooperation
Partnership and cooperation play an important role in the ecosystem and the success of ICO and help accelerate the adoption of coins. The more / the greater the partnership, the greater the benefits and benefits
8. Fund Allocation
The allocation of funds is very important for the success of the ICO, each project has a different allocation depending on the technology and resources used. If an ICO project makes a protocol from the start, then it will allocate funds over 40% to develop. Also, unreasonable or excessive allocation of funds can be indicated as fraud
9. Legal Aspects
ICO who provide legal information will increase trust for investors because they get legal protection. Also, some ICO projects failed or were banned because they did not have a clear legal basis.
10. Application prototype
prototype applications are needed as demonstrate products offered, this platform can also be an added value for developers in the eyes of investors.
Not only ICO, but this observation method also applies to IEO and STO.